Thérèse Byars – Corporate Secretary Murray Stahl – Chairman & Chief Executive Officer

Thank you, Glenn. Actually, it’s our 2015 first quarter conference call and I have give you the wrong number at the beginning Glenn.

I apologize.

Good afternoon, everyone. My name is Thérèse Byars, and I’m the Corporate Secretary of FRMO Corp.

We appreciate all of you joining us for today’s call. The statements made on this call apply only as of today.

The information on this call should not be construed to be a recommendation to purchase or sell any particular security or investment fund. The opinions referenced on this call today are not intended to be a forecast of future events or a guarantee of future results.

It should not be assumed that any of the security transactions referenced today have been or will prove to be profitable, or that future investment decisions will be profitable or will equal or exceed the past performance of the investments. For additional information, you may visit the FRMO Corp.

website at www.frmocorp.com. Today’s discussion will be led by Murray Stahl, Chairman and Chief Executive Officer of FRMO Corp.

He will review key points related to the first quarter earnings. Once he has completed his remarks, we will move to questions.

A summary transcript of this call will be posted on the FRMO website in the coming weeks. With that, I’ll turn the discussion over to Murray.

Okay. Thanks, Thérèse, and thanks all for joining us today.

Ordinarily, Steve Bregman is with me, but he had to attend to some family health issues which as important as we think FRMO is, family is more important, and that’s where we need him to be. So you’ll have the pleasure of interrogating me today if you choose to.

So what I’m going to do is, I’m going to read income statement of balance sheet in two ways, not only just touching the highlights, but orient you because certain investments we made last year, its format is changing a little bit. And then I’m going to talk a little about Horizon Kinetics and what it’s up to and then we can talk about more strategic issues about what’s happened in the world of indexation because it broadly affects what we are thinking about doing.

And then I can open up for questions. To begin with, let’s turn to the statement of income, otherwise known as the revenue page.

And just to orient you, just understand that when you look at the revenue segment you really for analytical purposes can divide it up in a couple of groups. There is the – what’s consultancy and advisory fees, which for all intents and purposes primarily is our Horizon Kinetics’ revenue share.

That’s an important number for us, because you recall that’s the money we get from the top line of Horizon. Then there is dividends and interest income, that’s an important line but less important for the reason that a lot of our interest income comes from bond funds and I have more to say about bond funds later, but we are going to have to make change in that.

And there is some realized gains from investments we have on our own balance sheet, but we don’t trade a lot and we don’t see a lot of realized gains. Then there is the income that comes from the investment partnerships with limited liability companies.

That’s our investments in things like the Polestar Fund and it fluctuates from year-to-year, but that because those were gains that we realized. And then there is a new line which is the income from investment in Bermuda Stock Exchange because we have such a big division, the Bermuda Stock Exchange i.e., we control so much of it.

We – our accountants have advised us that we need to carry this, we basically consolidate in effect the Bermuda Stock Exchange, because the Bermuda Stock Exchange makes money, we actually increase the balance sheet carrying value. And, of course, this – the usual expenses, I personally regard them as negligible and after adding – after taking the various revenue categories and subtracting the various expenses we have our incomes from operations.

Of course, we accrue and take the appropriate tax rate. And there’s another line which is called comprehensive income and that is the change in market value of our balance sheet investments such as there are which are the securities we own directly, as well as the partnerships we happen to invest in.

And numbers as are as you see before them so net of everything we made $2.8 million after taxes. Now understand, as we turn to balance sheet, when we accrue as we did 1.2 odd million dollars for tax expense related to comprehensive income and loss for you to have it, we actually don’t pay that.

So you’ll notice on our liabilities, you’ll see a pretty good, a pretty big actually deferred tax liability of $9.971 million, almost $10 million. And then a non-current tax liability on top of that another 4.2 odd million dollars, about $14 million is in deferred taxes on monies that we theoretically owe to government but we don’t have to pay it.

And someone said to me, did I ever think I’ll be in a situation where I owed $14 million to the government and I actually thought I would. And it turns out that I do or we do collectively for all our shareholders.

Now, on the balance sheet, so I’m going to skip some of the current assets and come back to it in just one minute because I want to call your attention to some changes here. You’ll note the Bermuda Stock Exchange is carried as an investment at cost, that cost is going to change, hopefully go up, as we accrue profits and then there is the investment in Horizon Kinetics LLC, our own investment, which is different than our revenue share at cost and then it’s the – in the context of Horizon Kinetics’ reinvestment of our profits, you’ll see that treated the same way.

Then finally, you see the participation, the value as we put it on Horizon Kinetics’ revenue stream which we have a little over $10 million and that can stay constant. And when you look at our revenue in relation to cost basis you can see how important an investment that is for us and on prior occasions I expounded at length on that, so I won’t repeat myself.

Now, in the more traditional current assets you’ll see that the investments in South LaSalle Partners which is really the Minneapolis Grain Exchange, we broke it out for you, because first of all, because the $5.7 million. It’s an important investment for us and secondly it’s a strategic investment for us, more about that in due course.

So one should be able to see what that is and what we do it. Now, theoretically it’s treated as a current asset because theoretically you could fill the seats but as a practical matter we are not considering to filling the seats.

So it’s carried as a current asset but it’s more intellectually like a long term investment. Now, you’ll observe, let’s go down some levels to the end bottom of balance sheet, you’ll see couple of interesting items.

You’ll see shareholders’ equity $98.381 million, about $98.4 million, we’re approaching the $100 million mark. And which some people would say we’re really coming to that point and in terms of total assets an important line for us it’s over $115 million.

It’s a big balance sheet. So it gives us, when you look at our cash, when you look at our investments that we could liquidate, when you look and can see it, but various margin lines which we could rely on, if we want to, there is a lot of liquidity in this company and we could theoretically do selling with it.

It doesn’t mean we’re going to do selling with it, but in terms of the scale of operations and in terms of the scale of assets, I would dare say, it’s a somewhat different character than it was historically. I would say, dare say, it’s much more substantial than it was historically, and we have the power to do a lot more than we were able to do historically.

Now, turning to our most interesting investment at the moment, which is the rise in techs, at least, in terms of revenue share it’s very important, to give you an idea, at fiscal year-end August 31, we had approximately $9.8 billion of assets under management. That stayed month-by-month relatively constant rather $10 billion, market fluctuates slightly with asset value and with inflows and outflows with the various funds.

And it’s organized in the following way 10% is which you would call alternatives, sure, some of you would say hedge funds, 8% are various kinds of sub-advisory contracts, institutions loosely defined in my opinion, but they are institutions that are less, of 22% of our assets and the mutual funds also 22% of the assets. And financial intermediaries, which means do contract or WRAP programs, for us 18% and high net-worth, which is direct is 23%.

And as you know, we're making an effort to emphasize, where we can high net-worth an alternative and because we can get a higher margin there. And it has been bearing some fruit and moving along at a – at an interesting pace, and we'll see how that – how that continues to be reaching out.

Some highlights within that. The important thing, even though it’s very small for us, but strategically it's important is the joint venture we have with [Technical Difficulty] I talk about strategically later, and just go about factually now.

It’s about roughly $131 million in assets under management and it’s not an EPS, it’s actually mutual fund, and it’s an index. However, if you look at it, you may believe for analytical purposes, it was – there was really an exchange traded fund, given there is about 1,700 exchange traded funds in America.

I think, if you rent all the exchange traded funds in America, it would be kind of in the middle, maybe even above median in terms of assets under management.

So it’s not easy even if you license someone else's index to get assets of scale, we manage to do that. And I believe, if I'm not mistaken at fiscal year-end last year, so that would be from now, about 14 months ago, we had something like $7 million in the fund, if I'm not mistaken.

So $7 million plus, to $1.31 million plus, that’s not to (inaudible) ourselves, but it’s not an unsatisfactory result for us. Now, let’s look at another way, use of fund to introduce some big or broader thing that’s going on in the market, they are important for us and I can relate various investments we made.

So you will observe, of course, the most recent market correction. And I would tell you, from my perspective, the most salient feature of that is the fact that these various indexes especially equity indexes that we suppose we made reference to the S&P, the small cap index which is Russell 2000, the merchant markets index, the EAFE index, which is Europe, Australia and Far East, and some subsets of those geographically, you will look closely and you will see more or less allowing for some rounding error, they all went down at the same rate.

And it might shock a lot of people, it doesn’t have to shock me, it doesn’t surprise me whatsoever for two reasons. One, if the indexes are going to be dominated by the companies with greatest float, i.e., the biggest companies and those primarily a global multinational companies, well, they do business with each other, they do business with each other’s country.

So, for example, think a big company at random, if I pick Coca-Cola, obviously S&P is – I picked that because it sound really random I guess, I deliberately picked it, it’s the most quintessentially American company you can bind, Coca-Cola and two-thirds of its revenue come from outside of the United States. So you could say that, if you make an investment in Coca-Cola, are you really making an investment in United States of America.

And there are many other companies you could point to in the S&P 500 that have that characteristic. Similarly, if you took companies outside of the United States, I usually like to make reference to Nestlé, because it’s a Swiss company.

It does so many business in Switzerland, surely no one would argue that Nestlé is a Swiss company in the sense that someone makes an investment to express their economic views on the GDP of Switzerland, it’s a global company. And a lot of their business has been done in the United States of America, and the United States look forward to it as these other countries.

So when there is a slowdown in the global economy, global indexes composed as they are of globally oriented companies go down together. Big problem if you are an indexer.

Now, to give you a further orientation if I add up all the exchange traded fund in the United States of America, crudely speaking, I’m going to round, it’s about in total assets under management $1.9 trillion. And of late, it gets about $8 billion a week that figure assuming the market doesn’t fluctuate it will grow by $8 billion a week.

Now, I ask you rhetorically, what's the point of putting more money into primary indexes if the point is, I call them indexes, but even people call them asset classes, there is a large capitalization in U.S. asset class.

So what does one do about it? Now, the only thing you really can do about is, you can look for and this is why we could not really understand, why – this has positioned ourselves the way we did.

We positioned ourselves as idiosyncratic investors using, going back to this, this, this index we have – the, what we call the wealth index. The wealth index is, of course, composed of what we refer to broadly speaking as primarily owner/operator companies, wealth people will need a big investment in certain company.

In other words, they put a lot of their eggs in one basket and they watch that basket very carefully. And it has a different volatility characteristic than the general market, sometimes it could be better and sometimes could be worse.

Well, if you're really interested in having some diversification, the only thing you really do is buy something that’s idiosyncratic, so that’s an example of something idiosyncratic. Now, I could also tell you that in short order we hope to launch an international version of the wealth index, I can’t guarantee we are going to do that, but hopefully in short order we will do that.

And so we’ll have another – we’ll have another offering in that – and that way Horizon Kinetics, there is another way of looking at Horizon Kinetics. There is this physic called active share.

So what the active share? Active share is a measure, a scale, basically, rates a manager on the scale of 1 to 100.

And the scale is designed to measure how far away from the S&P is your portfolio. So if you are a number like one, you are more or less like the S&P.

If you are a number like 100, you have no similarity whatsoever of the S&P. I know, remember our number, but I remember it’s so high, that it’s – the higher just about anybody’s.

And that bodes very well, and if you are in this (inaudible) and you happen to read the scholar’s literature on this subject, you will see that prior to most recent correction a term was used in the formulation indexes is called smart beta. So index basically beta, meaning, give you access exposure if you like to the variability of a certain subset of marketplace or the broader marketplace, you’ll take an index like the S&P 500.

Smart beta refers to the idea that certain elements of the market be excluded, certain elements in the market what we believe for certain because they entail certain characteristics. They perform worse than the average market than they did in the market itself.

So in theory, if you remove these elements from the index, you have what's called smart beta. And of late, of late will be referred to last couple of weeks, they seem to have brought that term, I don’t see it used all that much.

I see in place of it another term called alternative beta. So what's the difference between smart beta and alternative beta?

Alternative beta is really refers to those either active managers and/or indexes that really have in terms of their composition really very little resemblance to the overall indexes. The idea that we can find somebody with high active shares rating with conventional index, perhaps, you could argue, you have some measure of diversification.

And I personally think that in shorter, that’s going to be an interesting development then it should, I hope effect is positive. Now, there is another way of looking into situation.

As I referred to in the last meetings, if we go into just a little bit more detail now, the average security clearly is fluctuating with the marketplace, not providing diversification that it historically did. And as a consequence, it’s the security itself that’s problematic.

The security itself really has, what’s called in the academic literature non-absorbable parameters. What does that mean?

It means that, there's nothing intrinsic about security, I can take the biggest stocks and nothing intrinsic about the securities themselves that can tell you what's the behavioral characteristics going to be, it’s a common stock, and the earnings might go up in which case, hopefully the stock goes up, or the earnings can go up, and trades go up and stock might go down anyway, or rates can go down and the earnings can go down, any of those combinations those can do is nothing bad. So I believe there are ways of disaggregating from the characteristics of the companies and putting them in publicly traded vehicles, that are with doing something that no one has ever done before, which is to create process and securities that actually have certain structural properties that 1.2 that – it doesn’t guarantee the success.

But it does more or like to show you behavioral characteristics of the given subsets, will be different from and distinct from the various securities in question. Now, I’ve got a stock there, I can’t go anymore for a whole host of reasons that you can guess.

But anyway having said that much, you can now understand why we've been so interested in making investments in exchanges. And I would say one other thing, it’s just historical, so it’s not proprietarial.

And historically, if you go back to the 17th century, when London Stock Exchange started, and higher securities even get listed. It all came from what’s called into the macular the sell side.

So investment bankers or corporation decided that it was their advantage to issue securities, now sometimes more securities we issued and sometimes less securities we issued, and even period of time when those securities we issued. So if you’re an investment manager, but the only thing you can do today is, depending on what your objectives are, what you like to accomplish, you can draw from the various publically traded securities and blend the securities in whatever combination you like, and hopefully create the portfolio that will embrace the characteristics you’re trying to pick your client mix.

The buy-side never really got involved. And the buy-side, of course, is the investment management side.

The buy-side never got involved in structuring investments, the buy-side never got involved in the creation of the securities, never happened for stock of these. So the buy-side is really at – the buy-side you might think of it’s sort of – it’s an irony of history, it’s referred to as the active managers, but it’s really not as active as you think.

It’s really passive in the sense that, it’s just choosing between the securities that exist. It’s not active in the sense of picking through the risk and reward characteristics that the clients would like to have and seen to it that securities exist to pass those characteristics.

I believe with modern technology, it’s possible to do that. And that’s one of the things we are exploring at the moment.

I can’t go further than that, so hopefully, I can do no more than peak your curiosity. And we have the balance sheet to be able to do a lot of work in that regard and we have the balance sheet to do a lot else as well and we are cash flow positive.

Our investments by and large are successful. But as you can see, we have a lot of liquidity in balance sheet, we have some borrowing power.

We choose to use it. We have no plans to use it.

We do have the borrowing power. So that’s the best way I can sum up our situation at the moment.

We are, to put it this way, we’re graduating to a higher level. So crossing the $100 million threshold in total assets and hopefully in the not too distant future crossing the threshold $100 million in equity assets, I think puts us in a little bit different class and gives us a little more flexibility to do things we’d like to.

So I think we’re in a pretty good position. And actually we’d always like to be in a better position and we’re going to do everything we can to get to better position.

But life is not there at the moment and hopefully it’s going to get better or at least we’ll do everything we can to see to it that it gets better. So with that, that’s sort of the summary.

And I'd like to take questions if we have any.

So what does one do about it? Now, the only thing you really can do about is, you can look for and this is why we could not really understand, why – this has positioned ourselves the way we did.

We positioned ourselves as idiosyncratic investors using, going back to this, this, this index we have – the, what we call the wealth index. The wealth index is, of course, composed of what we refer to broadly speaking as primarily owner/operator companies, wealth people will need a big investment in certain company.

In other words, they put a lot of their eggs in one basket and they watch that basket very carefully. And it has a different volatility characteristic than the general market, sometimes it could be better and sometimes could be worse.

Well, if you're really interested in having some diversification, the only thing you really do is buy something that’s idiosyncratic, so that’s an example of something idiosyncratic. Now, I could also tell you that in short order we hope to launch an international version of the wealth index, I can’t guarantee we are going to do that, but hopefully in short order we will do that.

And so we’ll have another – we’ll have another offering in that – and that way Horizon Kinetics, there is another way of looking at Horizon Kinetics. There is this physic called active share.

So what the active share? Active share is a measure, a scale, basically, rates a manager on the scale of 1 to 100.

And the scale is designed to measure how far away from the S&P is your portfolio. So if you are a number like one, you are more or less like the S&P.

If you are a number like 100, you have no similarity whatsoever of the S&P. I know, remember our number, but I remember it’s so high, that it’s – the higher just about anybody’s.

And that bodes very well, and if you are in this (inaudible) and you happen to read the scholar’s literature on this subject, you will see that prior to most recent correction a term was used in the formulation indexes is called smart beta. So index basically beta, meaning, give you access exposure if you like to the variability of a certain subset of marketplace or the broader marketplace, you’ll take an index like the S&P 500.

Smart beta refers to the idea that certain elements of the market be excluded, certain elements in the market what we believe for certain because they entail certain characteristics. They perform worse than the average market than they did in the market itself.

So in theory, if you remove these elements from the index, you have what's called smart beta. And of late, of late will be referred to last couple of weeks, they seem to have brought that term, I don’t see it used all that much.

I see in place of it another term called alternative beta. So what's the difference between smart beta and alternative beta?

Alternative beta is really refers to those either active managers and/or indexes that really have in terms of their composition really very little resemblance to the overall indexes. The idea that we can find somebody with high active shares rating with conventional index, perhaps, you could argue, you have some measure of diversification.

And I personally think that in shorter, that’s going to be an interesting development then it should, I hope effect is positive. Now, there is another way of looking into situation.

As I referred to in the last meetings, if we go into just a little bit more detail now, the average security clearly is fluctuating with the marketplace, not providing diversification that it historically did. And as a consequence, it’s the security itself that’s problematic.

The security itself really has, what’s called in the academic literature non-absorbable parameters. What does that mean?

It means that, there's nothing intrinsic about security, I can take the biggest stocks and nothing intrinsic about the securities themselves that can tell you what's the behavioral characteristics going to be, it’s a common stock, and the earnings might go up in which case, hopefully the stock goes up, or the earnings can go up, and trades go up and stock might go down anyway, or rates can go down and the earnings can go down, any of those combinations those can do is nothing bad. So I believe there are ways of disaggregating from the characteristics of the companies and putting them in publicly traded vehicles, that are with doing something that no one has ever done before, which is to create process and securities that actually have certain structural properties that 1.2 that – it doesn’t guarantee the success.

But it does more or like to show you behavioral characteristics of the given subsets, will be different from and distinct from the various securities in question. Now, I’ve got a stock there, I can’t go anymore for a whole host of reasons that you can guess.

But anyway having said that much, you can now understand why we've been so interested in making investments in exchanges. And I would say one other thing, it’s just historical, so it’s not proprietarial.

And historically, if you go back to the 17th century, when London Stock Exchange started, and higher securities even get listed. It all came from what’s called into the macular the sell side.

So investment bankers or corporation decided that it was their advantage to issue securities, now sometimes more securities we issued and sometimes less securities we issued, and even period of time when those securities we issued. So if you’re an investment manager, but the only thing you can do today is, depending on what your objectives are, what you like to accomplish, you can draw from the various publically traded securities and blend the securities in whatever combination you like, and hopefully create the portfolio that will embrace the characteristics you’re trying to pick your client mix.

The buy-side never really got involved. And the buy-side, of course, is the investment management side.

The buy-side never got involved in structuring investments, the buy-side never got involved in the creation of the securities, never happened for stock of these. So the buy-side is really at – the buy-side you might think of it’s sort of – it’s an irony of history, it’s referred to as the active managers, but it’s really not as active as you think.

It’s really passive in the sense that, it’s just choosing between the securities that exist. It’s not active in the sense of picking through the risk and reward characteristics that the clients would like to have and seen to it that securities exist to pass those characteristics.

I believe with modern technology, it’s possible to do that. And that’s one of the things we are exploring at the moment.

I can’t go further than that, so hopefully, I can do no more than peak your curiosity. And we have the balance sheet to be able to do a lot of work in that regard and we have the balance sheet to do a lot else as well and we are cash flow positive.

Our investments by and large are successful. But as you can see, we have a lot of liquidity in balance sheet, we have some borrowing power.

We choose to use it. We have no plans to use it.

We do have the borrowing power. So that’s the best way I can sum up our situation at the moment.

We are, to put it this way, we’re graduating to a higher level. So crossing the $100 million threshold in total assets and hopefully in the not too distant future crossing the threshold $100 million in equity assets, I think puts us in a little bit different class and gives us a little more flexibility to do things we’d like to.

So I think we’re in a pretty good position. And actually we’d always like to be in a better position and we’re going to do everything we can to get to better position.

But life is not there at the moment and hopefully it’s going to get better or at least we’ll do everything we can to see to it that it gets better. So with that, that’s sort of the summary.

And I'd like to take questions if we have any.

Okay, well, we’ll wait if someone has a question. But someone just e-mailed a question, it’s not 100% in FRMO question, but I'll read anyway and I’ll respond to it.

The question was and I’m just reading it, if you have a chance during today’s conference call, could you talk about why you have been selling down Rouse, symbol RFE or it has changed from the story? This is really a question that pertains to Horizon and it – I'll pick it anyway.

So nothing has changed from the story. We’re not – we did sell it down, but the only reason we did sell it down is because we need money to do other things.

There are Rouse, of course, is a spin-off. And in the most recent several months you observed there are a lot of spin-offs coming out, there are a lot of the spin-offs that have come out, a lot of spin-offs is scheduled to come out.

And sometimes we like to buy a few and we need money, it has to come from somewhere and that’s the place it came from. It doesn’t mean that there is anything wrong with Rouse.

And we also have on the security called Brookfield Asset Management and because they control Rouse, we have exposure to anybody. So that’s the only reason or picking on Rouse as means of raising money, we have exposure to it by another modality so nothing, I’d say we bettered at Rouse, hopefully it answers the question.

Now, if anybody has any questions apart from that, I'm just sitting here, so I'm not going anywhere. So please ask me questions you have in mind too.

Hi, I'm just…

Hi.

I’m Marie. I’m an investor and I admired your business and I'm happy that to be an investor alongside you in your company.

I basically just called into to see your – how things were going, it sounds great. And I was wondering about the kind of your capital allocation thinking, that’s one reason why I'm really, really happy to be invest with you is that I'm – I feel like, I'm paying for a great capital allocator.

And how do you view that decently high stock price as a currency possibly that would – that make sense to use or is that not something that we would think about?

Well, I'm not sure I understand the question. So when you say the high stock price are you referring to FRMO Corporation?

Yeah, I was just thinking that it seems like it’s been good enough and high enough that it could be used without hurting the company and oh, I mean, not being – diluted to the company or, I mean…

Okay, I…

Maybe, that’s a bit sensitive. I won’t – I don’t want to, I don’t want to…

No, I can please cover it. Understand that, I feel the company – the chairman of the company, I’m not really supposed to talk about my view of the evaluation.

Obviously, as a human being I obviously have a view.

Oh, sure.

And so does every other human being and has been perfectly entitled to have a view, but I’m not supposed to talk about it. However, I can say the following things.

So in terms of, if you work through, look at the balance sheet, see we got nearly $28 million for the cash in the balance sheet and that number is growing as you can possibly want to do something we can first rely on that. Now, there’s another thing you could look at which is in terms of other investments available for sale, if you see that number that’s $56 million.

Within that is a fair amount of closed end bond funds. In the shareholder letter I made reference to that.

But the closed end bond funds end up being great investment for us because we basically invest in bonds in leverage basis, you know how well bonds did in the last couple of years, we got the interest income. But and these levels of interest rates you have been able to tell how low interest rates are right now.

We don’t even get those interest rates because we pay taxes from all the interest income, we get obviously. So it’s a little bit turned asset for us.

So the first order of business, if we’re thinking about capital allocation is we have two big low return buckets to work with, long before we get to the stage of equity issuance. We have a lot we can do there.

Now, in terms of the equity, I can’t tell you anything about the value because that’s not clearly right, but understand that all the investments we’ve made apart from the cash and the bonds are designed in the same way as revenue share is designed. The idea is to have a lot of operating leverage so you think the exchange is for example, it’s just a platform.

It hasn’t been the certain fixed cost, with more like fixed cost of running it. And we got and bought in the exchanges because the moment those of the smallest exchanges and we can get in fairly cheaply.

If something good would happen, I’m telling you this can happen but if something good were to happen there is a lot more revenue flowing through that system and not a lot more cost flowing through that system. So will we sell stock?

In a certain sense we’re not merely selling stock, we’re selling a piece of all our investments. For example, if I want to invest $100, my choices were, I can take a $100 out of cash, that’s one choice.

I can take $100 in the bond portfolio, well that’s another choice. And what would I do, chances are I’ll probably take it as a bond portfolio, not the stock portfolio and the reason is because the bond portfolio doesn’t pay a lot anymore and actually has price risk there, I need $100.

Now I can go a step further and I could say theoretically want to issue stock. Now if I had nothing but cash and bonds, on the balance sheet I might say oh, what a great idea and you could look at it and you could say well there is shareholders’ equity of $98 million, my market capital ratio is higher than that and I’m selling stock at an Yankee-Doodle price to book ratio and in each stock I sell add to book value, so how wonderful is that?

But on the other hand, I'm also selling pieces of the following things, selling effectively interest in the Bermuda Stock Exchange and selling the – and effectively an investment interest in Horizon Kinetics LLC, this is the actual corporation, and mostly selling of participation in the revenue share. And I personally think I like the revenue share.

So you can see why I'm reluctant to use the security to sell pieces of those instrumentalities at the moment and we have a certain carrying value. And you can see on its revenue we get from it, that’s right, I don’t – that’s really the right value of the carry out, but that’s an accounting value.

Yes.

We feel it might be different to what the value is, I just said this is one that shareholder letters, I think that if I sold the revenue share at the carrying – balance sheet carrying value, the shareholders have to ask themselves this question, would they be happy with me, would they be upset with me.

Sure.

My point is they might be upset with me and I’d be upset with myself actually, so well why would I do that? Anyway now that said, I now have to give you the normal disclaimer that I could do at any time for any reason, because that’s really the truth and I need not make no – I’ve not been implied by otherwise for making those statements without the value.

But I’ll just give you an insight into the way I'm thinking about capital allocation. Now, we have a choice, wait, the one more choice is, which we could, we have done it but in theory we could, we can even borrow money, because…

Sure, sure.

Maybe you could make an argument that if we could borrow money, it’s on low interest rate for 30 years and the interest expense is tax deductable maybe it’s a good deal, maybe we should do it. So the luck gives the way get financing if we need it, but, of course, all those things are moved in the following sense, you first need a great idea.

Yes, yes.

The hardest part of it. I'm not sure I have one at the moment.

But I'm working on it.

Well, I really appreciate your answer and yes, honestly, I mean, I'm not really – I don’t want to be presumptuous or anything, but I was thinking a lot in quite a bit along the same line. I was just thinking that, perhaps, the carrying value was – wasn’t so low that it wouldn’t be out of the realm to use the stock as turnkey.

And then you could do something really big, but I understand that that may not be likely or desirable depending on what you – what your options, where do you see out there to buy, but I would say….

Yes, we live in – I would say, we live in the world of interest rates we live. And there is a lot of things out there that they trade within trade, because of interest rates and maybe otherwise I might – in other circumstances I might look at it very differently, but for now maybe how I covered to be.

Yes. Well, I appreciate the answer and I'm – like I say, I’m really happy to be invested a long time here in your company.

So thank you very much, Murray.

Thanks so much.

Thanks for your confidence.

Other questions, if you have any?

Okay. So what we're going to do is, if there are no further questions, we are getting close to 5 o'clock, we are going to conclude the meeting.

And, of course, we are going to approve this in three months in our next quarterly earnings call. And, of course, in the interim, if you have any questions, you can e-mail them, and we'll be delighted to respond to you.

And thanks for joining us and thanks for being shareholders and good afternoon.