My Mistake With The HMOs

I generally do not buy cyclical companies whose earnings could swing wildly. I prefer buying companies where earnings are somewhat predictable. This allows me to use price to my advantage if the stock price goes down. In buying the HMOs I bought cyclical companies and I am paying the price for my decision.

Wellpoint was trading at less than 8 times 2013 earnings when I bought the stock plus they were planning to buy back over 10% of their shares outstanding this year. I believed the reason for the discount was Obamacare. Only 25% of their profits, small group and individual, is likely to be effected by Obamacare. I figured that even if 25% of the profits went away the stock price was still too low, which I did not believe would occur. Obamacare will bring more customers and likely more profits over time.

Early in the past decade, when the HMO industry was still  young, profits for the HMOs declined as they tried to expand too aggressively. Since then there has been consolidation and a lot of the profits have gone to shareholders rather than into expansion. It has been a decade long profitable run for the HMOs. But at the end of the day it is an insurance business and there is an underwriting cycle. It now seems that we have hit the top of that cycle as profits are declining.

I was caught long at the top of the cycle. This is precisely the reason I avoid cyclical companies. While I recognize my mistake I do not want to compound it by selling out at any price. If the market gives me an out I will take it but current prices are already pricing in a dire outcome so I am holding tight.

Looking At the Stats

I view most of the news that the mainstream financial media focuses on as noise. However, in the past week we had a genuine important news event when Mario Draghi changed his attitude towards how the ECB plans to battle the sovereign crisis. I have spoken much more about news than I generally do and want to focus this this post on the statistics.

In the intermediate term the market is now overbought. In the short term we could see a pullback in the next few days but a better overbought reading would occur if we rallied one more time after that. Most sentiment indicators are mixed but some are showing too much optimism. Rydex traders are positioned very bullishly and the investment advisors polled by the NAAIM are about as bullish as they have been all year. From the NAAIM:



 

Looking solely at statistics I am more partial to the bearish camp. However, if the ECB acts forcefully none of this will likely matter and we will likely go higher until we are at a bullish extreme. As I have little insight to what the ECB will do I am neutral.

Valuation No Longer A Positive

S&P 500 earnings estimates for 2012 have been brought down to $101, down over 10% from the beginning of the year. The momentum for the economy and for earnings estimates are lower. In this context valuations now look neutral, whereas they have been a positive for the market. This adds risk to the market and raises the bar for a positive outcome in Europe.

The news out of Europe last week was an incremental positive. The ECB finally admitted that the high rates of peripheral countries were a problem. They will now attempt to address these issues instead of ignoring it.

In summary, we had positive news out of Europe last week but a 60 point move in the S&P 500 incorporates that good news. If the ECB fails to act strongly or if the economy continues to deteriorate despite ECB action there is now room for downside in the market whereas valuations were previously pricing in deterioration.

Can The Proposed Action From The ECB Work

Late in the day Friday details emerged about what actions the ECB might take to stem the crisis. For the first time since the crisis began serious action is being debated. According to news reports Mario Draghi is proposing a combination of LTRO and coordinated bond buying. This is a big about face as a couple of weeks ago at the last ECB meeting Mario Draghi did not believe either was needed.

The ultimate bull case is that if peripheral rates can be brought down far enough this plan could have the effect on the European economy that TARP and QE had on the US economy in 2009. A virtuous cycle of more liquidity and greater optimism would lead to a cyclical recovery from very cyclically depressed levels.

The bear case is that we have seen similar rumors before and that ultimately the ECB has stopped short of using the force that is necessary. Bringing peripheral rates down by 1%-2% might remove the risk of a short term meltdown but will not help the European economies recover. Even worse it allows the frog to slowly boil as the urgency for a permanent solution is delayed.

Without knowing what is rumor and what is fact it is difficult to make a judgement on the market. The 60 point rise in the S&P 500 has significantly raised expectations for ECB action. If the ECB fails to act as strongly as the rumors suggest or if the actions will be taken further out in time the market would likely not take it kindly. If the ECB does act this will put  a lot of pressure on the conservatively positioned investment community to buy, even if in the long run the action turns out to be too little.

 

 

Tough Market

The near term tail risk of a meltdown in Europe has been removed. Mario Draghi will back up his strong words if put to the test. The problem is that EU economies are slowing and it will take stronger action to reverse that decline. The ECB either needs to bring yields a lot lower or we need to see a full bailout for Spain. All that Draghi has achieved is that he has stopped peripheral yields from spiraling out of control, but they are still very high and hampering the economy.

This makes the stock market outlook even tougher. Market participants are not positioned aggressively so if they perceive this as a green light from the ECB than we could see higher prices. At the same time the economy and the earnings outlook are deteriorating.  I remain uncertain of market direction.

Draghi Dares The Market

EU officials know that Spain and possibly Italy will need assistance. The stronger countries like Germany are willing to help but want to see structural changes and want some control over the weaker countries' budgets in exchange for a bailout. The weaker countries do not want to give up their sovereignty.

We have been seeing a high stakes game of chicken where the stronger countries refuse to help, while the weaker countries refuse to ask for assistance. In the meantime the Eurozone is falling into a deep recession. In the past week Spanish 10 year yields soared above 7% while Italy's neared 7%. The game of chicken was coming to a head and this may have forced a solution.

This morning Mario Draghi said he would do anything to keep the Eurozone together including intervening to close sovereign spreads. This has taken the near term tail risk out of the market and is the reason we are higher today. But this also allows the game of chicken to continue and the economy to continue to deteriorate in the interim.

Bad News

The news gets worse on a daily basis yet the stock market has barely blinked. Earnings and economic numbers continue to come in weaker than expected. Texas Instruments missed expectations and lowered their outlook last night while the German PMI came in lower than estimates this morning and the futures are flattish.

In recent days I have gone over numerous reasons why the market is strong despite terrible news. To summarize:

  • Market participants with modest levels of equity exposure

  • Market participants who have been punished for panicking the past two summers

  • Reasonable valuations

  • Lean corporations

  • Strong corporate bond markets


While I respect these positives and would not be shocked if the market managed to climb higher I do not like the risk/reward. With earnings estimates coming down the upside seems limited. The economic slowdown will not turn on a dime and can potentially gather momentum. If the slowdown worsens the downside could be significant. I see the market not responding to bad news and I respect it but I don't want to join the party.

Bond Markets Lead

It is very difficult for me to imagine a sustained downturn in the market when junk bonds trade at record low yields. Corporations have nearly unlimited access to the debt markets. This allows for cash takeovers, LBOs and share repurchases. Its possible that the terrible economy eventually leads to wider spreads in bond markets but we are not there yet.

There are some early signs that the credit cycle might be turning. Three municipalities in California declared bankruptcy in a single week. We are seeing rapid earnings decline in the more cyclical sectors and its a matter of time before we see some bankruptcies. But the fact is that junk markets are at record low yields and there is little stress seen in yields.

As readers can see I have been torn lately between the bull and the bear case. The more I analyze the situation the less clear it becomes to me. It seems that I am not the only one that is confused as we have been seeing wild swings in both directions recently.

Macro Considerations

For the past few years market participants have been worried about a slowdown in China and a meltdown in the EU. Both are happening yet the S&P 500 is sitting a little more than 5% below a multi-year high. I do not like the current risk/reward on the long side but I respect the bull case enough not to be short.

There are a number of reasons that the market is not responding violently to the recent very bad news:

  • While corporate profits have been weakening, valuations are still reasonable. It will take a large drop in profits before valuations become a headwind.

  • After a 12 year old secular bear market, market participants are not positioned aggressively. There are simply fewer people to scare out.

  • Panicking has cost market participants a lot of money in recent years and like Pavlov's dogs they may simply be responding to their recent experiences. This is the most troubling reason  the market may be holding up.


Long time readers know that I usually give precedence to market related factors rather than macroeconomic related factors. I believe that macroeconomic factors are now very negative and they deserve increasing precedence. The economy is weakening, as are profits. There are numerous imbalances and the potential for a hard landing in China and a depression in Europe. This is simply too much for me to ignore now that it has begun to effect the economy and profits.

Does The Economy Matter

The macroeconomic situation continues to worsen. Spanish spreads are at a record while Italian rates are above 6%. We have seen a big rally in technology as results have been less worse than feared. How long can the rally in stocks continue as the global economy deteriorates?

I believe the risk/reward from current levels are poor. It is pretty clear that there is downward pressure on earnings. Valuations are reasonable so we could see some P/E expansion as long as profits don't fall out of bed, but given the deteriorating profits outlook upside is likely to be limited. However, there is also the risk that the deterioration in profits accelerates and the downturn in the economy worsens. I believe the upside is limited to a few percent while the downside potential is quite large.

 

Out Of Walgreens

After many months of trading Walgreen's I managed to get out today with a small profit.There was a large opportunity cost as I sold CVS to make room for this position. I still believe Walgreen's is cheap but sold because they levered up to buy Alliance Boots and buying leveraged companies does not fit my investing style.

 

Still No Reason To Be Bearish

Despite the continued rise in the market I still see little reason to be bearish although I remain cautious. Technology stocks that are missing estimates than are going by over 5% in many cases. The AAII bulls are at the lowest level since August 2010 and the market is not yet overbought.

I am reluctant to turn bearish before the market is overbought, which is still about a week away . Today is only the fifth day of the rally and it typically takes ten trading days for a rally to exhaust itself. Typically we see a rally, a pullback and another rally so its possible that we are setting up for a short term pullback.

From a fundamental standpoint earnings are coming in weak but they are not falling off of a cliff. At the current modest valuations the market can absorb slight reductions to estimates. The bears will argue that earnings are a lagging indicator and are set to go lower. The bulls will argue that there are few excesses in the economy and corporations are lean which should lead to more of the muddle through we have been seeing for years.

I see the merit in both the bull and bear argument and am indecisive. I see opportunity in specific stocks and sectors. For instance the HMOs are a defensive sector that are not economically sensitive. Most defensive stocks have gone up a lot but the HMOS have done the opposite. Aetna and Wellpoint, which I own, trade at 7 times next years expected earnings.

UnitedHealth reported this morning showing that health care utilization rates remain low, which is good for the bottom lines of the HMOs. Mitt Romney is now leading in some polls. I believe there is a free embeded call option in these stocks if Romney wins. Even if Romney does not repeal Obamacare he is likely to make it less onerous on the HMOs. If Obamacare moves forward i believe a worst case scenario is already priced into these stocks.

A Look At The Tech Sector

My view on the overall market which can be summarized as "I don't know" has not changed. Instead I wanted to focus this morning's post on the technology sector. Technology has underperformed the broader market since mid-April for a number of reasons. The sector was over owned at the end of March, with the sector being the largest overweight for managers by far. Technology companies generate a lot of their revenue overseas which exposes them to  the strong US Dollar has and the weakening global economy. Tech companies do not generally pay large dividends and dividend paying stocks have been the investment of choice recently.

Many of the issues plaguing technology companies remain. But there  is some evidence this morning that the woes may have been priced in to the more beaten down stocks. EMC missed on EPS but is trading 6.5% higher this morning. Intel had a big miss and lowered its outlook yet the shares are looking flat. Checkpoint missed and lowered their outlook and are trading higher. Normally big misses by three tech companies would mean much lower prices.

I still believe that tech is over owned but not nearly to the extent it was a few months ago. The issue of overseas earning seems priced in as shown by this mornings reactions to poor numbers. Unfortunately, the issue of capital allocation remains. These giant cash hordes are coming into focus as a result of investors preference for dividends. In mid-April I wrote that technology was over owned and set to under perform. I now think that technology will perform more inline with the market.

Its A Dividend World

Stocks with large dividends have been rising while those without have been treading water at best. There is a strong preference in the market for stocks that pay dividends. With interest rates so low there are few places in the world investors can get yield so they are going to the stock market. The performance chasers are starting to clamor for dividend stocks as well.

Google is growing at 20% a year and trades at less than 11 times next years FCF to EV, while many stodgy stocks that pay high dividends trade at nearly twice the valuation. There is an advantage to companies that pay dividends in that the risk that management blows the money is greatly reduced. But at some point it makes sense to buy their non dividend paying counterparts.

I believe that high dividend paying stocks are trading too rich but this is a trend that could continue. Over time this valuation gap is likely to close but predicting when this will occur is difficult. Large repurchases, initiations of dividends and takeovers of non dividend paying companies could potentially close this gap. In the meantime it makes sense to be cognizant of this trend. Buying companies that initiate sizable dividends and trade at low valuations may be a way to arbitrage this trend.

Terrible News But No Reaction

We have just had the worst earnings warning season since the recession, economic numbers around the world are coming in soft and peripheral spreads in Europe are close to record wides. In summary the news has been terrible. Yet the market is hanging in. There is a saying that "the reaction to the news is more important than the news itself". This is enough to stop me from being bearish but I cannot be bullish either with the deteriorating economic situation and the mixed sentiment.

It seems that dividend paying stocks are the new bonds. Many income investors are being forced into dividend paying stocks unable to find yield anywhere else. This adds a dynamic to the market that is difficult to quantify. Yield chasing does not typically end well but its possible that we are still in the early innings.

Cautious But Cognizant Of The Bull Case

I am cautious on the market now that we have seen a large bounce off the early June lows. The economy and earnings are slowing while we are in the seasonally weak summer months. Short term sentiment is on the bullish side but not at an extreme. Despite all these negatives I am not bearish and would not be surprised to see further gains.

Large market participants are positioned conservatively and they have  a lot of room to add if they were to turn bullish. Low rates have income starved investors and retirees venturing into dividend paying stocks, a trend that can continue and even accelerate.

It is very important to remember that the economy is not the stock market. Even assuming that the slowing economy will eventually hit earnings hard, that does not mean the market cannot go higher first. In October of 2007 we were nearly 10 months into the subprime crash,  yet the S&P 500 was making an all time high. The very bullish case is that we are currently seeing the same muddle through growth we have been seeing for years. If this turns out to be the case the market has the potential to go significantly higher.

With the S&P 500 trading at 13 times expected earnings I see little reason to be bearish. But with the economy slowing and numerous imbalances there is a higher than normal chance of an economic accident. As long time readers know I am not scared to put myself out there when I have high conviction. But given all these cross currents I do not have a strong opinion on the market at this juncture.

The Economy Is Slowing

Warren Buffet has insights into the economy because of the hundreds of companies he owns and his contacts. The last two summers we had large swoons in the stock market, with recession scares that never materialized. Both years Warren Buffet said that he was not seeing a slowdown in the economy and he was correct. Buffet has changed his tune and said that growth was slowing in the US and that business in Europe was falling quickly.

Growth is slowing, earnings estimates are declining and we are in the summer months, which have historically been a weak period for the stock market. Given this backdrop I only want to trade from the long side when sentiment is at a pessimistic extreme. That is currently not the case as many sentiment indicators I follow are pointing to slight optimism.

I do not like the current risk/reward on the long side of the market but I also do not like the bear side. Current valuations leave room for an earnings slowdown. A large earnings slowdown will be difficult as there are few excesses in the economy and at corporations. I believe the best course of action is to wait until the bulls or bears push this market too far in either direction. We are down six days in a row so a bounce is certainly possible, if not probable, but I don't believe it will be great because of the lack of negativity.

Make It Six

The S&P 500 futures are down 10 points in the pre-market. Today would be the sixth straight down day if we finish lower. Normally, the odds of some sort of a short term bounce would be high after six down days but we are still not seeing the type of negativity that should be present.

Short term newsletter writers that Hulbert tracks are recommending a net long exposure of 52.5%. They have actually increased their recommended exposure into the teeth of this decline, which is a negative from a contrary standpoint. Rydex traders are also positioned optimistically.

The bad news on the earnings front and from the EU continues to roll in. With all this bad news I am not willing to step in and buy until I see excess pessimism. While we could bounce on the sixth day this is not a fat enough pitch for me.

Where's The Negativity

If the market were to close lower it would be the fifth straight down day. After five down days the odds for a bounce are generally high. The caveat is that I'm not seeing the type of negativity typically associated with five down days.Its possible that Summer trading is damping the emotions and that we could see a bounce without a big build up in negativity. However, with the amount of bad news out there I'm unwilling to step in unless I'm pretty certain the bears have pushed too far.

Valuation Argument Getting Weaker

The news of late regarding earnings, the global economy and the EU have been awful but the market has managed to hang in.  The S&P 500 still sits on a respectable gain for the year even after the recent downdraft. The best thing the market has had going for it is that valuations are reasonable. Lately, we have been seeing big earnings warnings and the earnings expectations that these valuations hinge on might soon come into question.

Expectations have been for roughly $105 in S&P 500 earnings for 2012. At a modest 14 times earnings that would equate to the S&P 500 at 1470. Even at at $95 a 14 multiple would put the S&P 500 at 1330, not far from where we are currently trading. The point being that earnings estimates have some room on the downside before the markets valuation would become a negative.

I do not expect to see the type of earnings decline we saw in 2008-2009. The housing bubble resulted in excesses in the economy and at corporations that are not present currently. That said, given the size of recent earnings warnings and slowing economies around the world a sizable decline in earnings is still possible.

The bottom line is that the valuation argument for the S&P 500 is getting weaker. Earnings estimates are almost certain to decline but the magnitude of the decline is the key. The bulls still have some cushion in regards to valuation but its getting thinner.

Many Ways To Win In the HMOs

The worst case scenario appears to be priced into HMO stocks. HMO's such as  Aetna and Wellpoint are trading at roughly seven times next years projected earnings, while HMOs have  historically traded at multiples over thirteen times earnings. The main reason for these low valuations is the uncertainty surrounding Obamacare. I believe the decline in HMO stocks has gone way too far as there are so many ways for investors to win in these stocks.

Obamacare seems to be a foregone conclusion for market participants even though Mitt Romney has vowed to get rid of Obamacare if he wins. While Wall Street has written off Mitt Romney he is actually leading in some polls and is raising more campaign money than Barrack Obama. If Mitt Romney wins these stocks will likely soar towards historical multiples, well over 50% higher. I am not predicting he will win but I believe he has a much better chance than the market is giving him.

Even if Obamacare comes to fruition it does not necessarily need to be a disaster. Wellpoint has been labeled as the most susceptible to the new laws, although that may have changed as a result of their takeover of  Amerigroup. Only 25% of Wellpoint's profits come from individuals and small groups, the business lines with high risk from Obamacare. 75% of Wellpoint's earnings streams are likely to  see little effect from Obamacare.

Obamacare uses the HMOs in order to administer health care. This will mean tens of millions of new customers. There will be little reason to compete on price as there will be plenty of new customers to go around. It is baffling that everybody assumes this will destroy the HMOs. Its entirely plausible that the HMOs will find a way to make money off of these new customers. Its also entirely possible that the Obamacare rules are tweaked if they are too onerous to the HMOs.

I am not arguing that there isn't uncertainty surrounding the HMOs. My argument is that prices are extremely attractive with tremendous upside if the disaster scenario being priced in does not materialize.

No Motivation To Move

Both the bulls and bears have been punished when they tried to push the market too far in either direction. This makes it less likely that market participants will take a strong stance in either direction. Add to that uncertainty about Europe, earnings and summer trading and the odds for a big move become even smaller.

We have had three straight down days and European stock and bond markets are rebounding this morning. An up day today would not be very surprising but there is little reason to think that this would lead to a strong rally with the indicators mixed and all the uncertainties.

Sold Vodafone

I sold my position in Vodafone which I have been holding for over a year. The stock has appreciated by roughly 8% and I collected collected roughly 8% in dividends over that time. I was hoping to sell in the mid-thirties and still believe it is very conservatively worth $35 but some factors have changed.

The catalyst for my purchase was an aggressive 4 billion British pound share repurchase program. That share repurchase program is about to be completed and its uncertain if a new one will replace it. Additionally, I own software companies with heavy European exposure and don't want  to be too heavily weighted towards Europe.

It was a difficult decision to sell Vodafone. If my portfolio were doing better I would probably allow this position to stay. I will continue to follow the company and suspect that I may own it again at some point.

In The Middle Of Nowhere

The market was a bit extended heading into the July 4 holiday. The past two and a half days have served to work off that very short term overbought reading and the excessive bullish sentiment has subsided. We are now truly in the middle of nowhere. Almost every indicator I look at is mixed, with few extremes either way. Its difficult to make a strong bull or bear case and I see no reason for a strong stance either way.

No Easy Trade

The US economy is muddling along while the rest of the world is slowing. Valuations are reasonable but we are starting to see weakness in corporate profits. Traders seem to be getting bolder while hedge funds are still positioned conservatively. It is very difficult to get conviction on the long or short side regardless of the factors that I look at.

In the very short term the market has run very far and we received bad news out of Europe. That leads me to believe  that the upside will be difficult in the short term. But a few days of the market going sideways or down would change that.

Happy Days

A month ago following the employment report it felt like the world was ending. Here we are 100 S&P 500 points higher and the crowd believes all is well. In reality Italian bond yields are still pushing 6% and the ECB is still doing nothing. When everybody was negative taking a contrary opinion held a good risk/reward as the world only ends once. Currently, the crowd is more bullish but the macro situation is no less dangerous. I am less sanguine. Have a good night.

Europe Is A Disaster

My read on the news out of Europe was that it was terrible. The ECB are the only ones with the power to lessen the crisis at this point and they did the absolute minimum, which was to cut rates by 25 bps with no additional liquidity measures. The Germans just gave in to a Spanish bank bailout so it will be  a long time and likely take  a worsening of the situation before they sign on to take more action.

The US economy seems to be muddling along and not buckling under the weakness is Europe thus far. Selling because of European fears has been costly in recent years so its possible that we ignore Europe until the effects are seen here. The big run up and the news out of Europe makes me cautious. The reason I am not bearish is that valuations are reasonable  and I believe market participants are still positioned somewhat cautiously. In recent years we have seen the market go straight up until it sucks everybody in. If the ECB had done more today I would have thought we see that once again. With Europe a drag I believe it is less likely but bears must leave room open for that possibility.

 

The ECB Will Be Awaiting Us

When we return on Thursday the ECB decision will already be awaiting us. My guess is that we see a rate cut and LTRO III. The initial reaction will likely be higher but it should start to fade by Friday as we would be very extended. Anything short of that is likely to disappoint and will likely lead to an ugly decline. Have a Happy Fourth of July.

Bought SPY Put Spreads

The ECB decision comes out on Thursday morning before our markets open and the S&P 500 is up over 60 points in a straight line. While I'm not bearish I decided to invest in some September 135-115 SPY put spreads just in case.

Long In The Tooth

It is tough to be bullish in the short term due to the sheer size of the recent rise in the market combined with an economy that is clearly not firing on all cylinders. It is also difficult to be too bearish because the ECB's decision Thursday morning can potentially ignite the market. I believe market participants have room to add exposure as many are still cautious. LTRO III is a distinct possibility and could be the catalyst.

I do not see an easy trade at the current juncture as we are extended in the short term but there is still room on the upside in the intermediate term. I am market agnostic after the recent move.

No Price Too Low

Wellpoint trades at less than seven times next years expected earnings. HMOs generally trade at 13 times earnings which would imply a target price of $110. I assumed that the reason Wellpoint was so cheap was because of the uncertainty surrounding Obamacare. While I knew that a bad Supreme Court decision would hit the stock I thought the damage would be minimal as a bad outcome seemed like it was already priced in. I was wrong as the stock is down 10% since the decision.

The market has been absolutely brutal to any stocks with "issues". No price seems to be too low for a stock with uncertainty. I wrote a post a few weeks back about how recently valuations did not offer much support to stocks. I pointed to the sheer number of value traps in recent years. In addition many market participants operate with "risk management" which equates to a stop loss, so losses beget losses.

Even though I am a value investor I have managed to avoid the value traps in recent years, other than a short foray into Hewlett Packard last year. In the past few months I have not been able to escape the side effects of the brutal bear market for value stocks. It has been a grueling experience and one I will not soon forget. It has reinforced the idea that one must account for all possibilities and make sure the portfolio can withstand it.

Earnings Are The Key

Despite all the bad news out of Europe last summer, corporate earnings remained strong. The same cannot be said this year as earnings estimates are being ratcheted down as a result of slowing global growth. Valuations are very reasonable so an earnings slowdown will not necessarily lead to a down market.

The key to the market will be the extent of the earnings slowdown. The bursting of the tech bubble and the real estate bubble led to massive declines in earnings and large market declines. The current situation is different in that valuations are starting out at a much lower level and there are much fewer excesses in the economy and on the corporate level. I believe the market will remain in a trading range until the extent of the earnings slowdown becomes clearer.

I have been talking about a trading range recently due to Europe. Friday's news of an EU agreement got us to the very top of that range. If the ECB follows through on Thursday with more help for Spain and Italy its likely that the  trading range will move higher with the yearly highs marking the high end of the range.

In the shorter term I believe the market is getting extended. The market has generally been going up for four weeks now but it seems like Friday the crowd finally started to embrace it. We are not at a bullish extreme but gains should be harder to come by.