Logo of jester cap with thought bubble.

Image source: The Motley Fool.

Apollo Commercial Real Estate Fina (NYSE:ARI)
Q3 2021 Earnings Call
Oct 26, 2021, 10:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, and thank for standing by. Welcome to the Apollo Commercial Real Estate Finance Third Quarter 2021 Earnings Conference Call. [Operator Instructions]

I'd like to remind everyone that today's call and webcast are being recorded. Please note that they are the property of Apollo Commercial Real Estate Finance, Inc. and that any unauthorized broadcast in any form is strictly prohibited. Information about the audio replay of this call is available in our earnings press release. I'd also like to call your attention to the customary Safe Harbor disclosure in our press release regarding forward-looking statements.

Today's conference call and webcast may include forward-looking statements and projections and we ask that you refer to our most recent filings with the SEC for important factors that could cause actual results to differ materially from these statements and projections. In addition, we will be discussing certain non-GAAP measures on this call, which management believes are relevant to assessing the company's financial performance. These measures are reconciled to GAAP figures in our earnings presentation which is available in the Stockholders section of our website. We do not undertake any obligation to update our forward-looking statements or projections unless required by law.

To obtain copies of our latest SEC filings, please visit our website at www.apolloreit.com or call us at (212) 515-3200.

At this time, I'd like to turn the call over to the company's Chief Executive Officer, Stuart Rothstein.

Stuart A. Rothstein -- Chief Executive Officer, President

Thank you. Good morning, and thank you to those of us -- those of you who are joining us this morning on the Apollo Commercial Real Estate Finance Third Quarter Earnings Call.

Joining me this morning are Scott Weiner and Jai Agarwal. As we move toward the end of 2021, we continue to see similar trends from prior quarters in the commercial real estate market, specifically the underlying performance of most commercial real estate continues to recover at a measured pace consistent with the recovery in the overall economy. There have been clear property type and geographic winners, as well as those asset types and regions that remain challenged. Ultimately, an improving economy should be positive for the commercial real estate industry and asset level metrics should continue to improve.

In contrast to operating performance, real estate investment and financing activity recovered sooner and more quickly, consistent with the broad and rapid recovery across the capital markets. At presence -- at present, the pace of activity continues to accelerate, and regardless of the asset class, the combination of a low-interest rate environment and significant fund flows is supporting robust transaction volume and a well-funded high highly liquid financing market. The commercial real estate lending market has surpassed 2019 levels and is on track for a record year in terms of lending volumes across CMBS, banks, insurance companies, and non-bank lenders such as ARI. In the current highly competitive environment, the strength of the Apollo Commercial Real Estate Debt platform again has proven to be incredibly beneficial as we have completed approximately $1.5 billion of new transactions for ARI through the first three quarters of the year.

The pipeline continues to be a mix of both US and European transactions for well-positioned high-quality properties with institutional sponsorship in gateway markets. We expect ARI loan origination totals for 2021 will approach pre-pandemic levels as we have already committed to an additional $340 million of transactions in the fourth quarter and we are working through a number of other transactions that should close by year-end. It is worth highlighting that ARI's loan originations year-to-date continue to favor Europe, which is reflective of a combination of the strong reputation and market position our team has developed there, slightly less competition, and our team's ability to underwrite and structure large transactions. As a result of our success in Europe, loans securing properties in Europe represent approximately 40% of ARI's portfolio at quarter-end.

To reiterate what I have said previously, the types of transactions, quality of equity sponsorship, and deal structures for ARI's European loans are very similar to the transactions we complete in the United States. Our European loan portfolio is diversified by property type and geography and we manage currency risk as we borrow and lend in local currency and use forward contracts to hedge. The strength of the CRE lending market has also led to more normalized repayment activity in our portfolio. Through September 30, we have received almost $800 million of loan repayments and an additional $277 million of loans have repaid since quarter-end. Our repayments reflect encouraging signs from the general economy as transitional assets are achieving their business plans including construction projects achieving certificates of occupancy and for-sale residential units being sold. As a result, ARI's construction exposure continues to decline, representing approximately only 14% of the portfolio at quarter-end. We also have seen positive anecdotes from our portfolio of loans securing office properties, including the repayment of a large Manhattan office loan this quarter as well as increased leasing activity and foot traffic at our other projects.

In general, the credit quality across our portfolio remains stable and we continue to make progress with our focus loans. Before I finish my remarks, I want to take a minute to highlight some recent corporate governance highlights with respect to our Board of Directors. In the past year ARI, expanded the company's Board of Directors from 8 to 10 members, with the addition of Pamela Carlton and Carmencita Whonder. Both women are senior executives and we believe ARI will benefit greatly from their insight and expertise. We continue to recognize the importance of ESG issues to our stakeholders, and as a reminder, ARI incorporates consideration of ESG issues into our investment analysis and decision-making processes.

Lastly, I wanted to take a moment to thank our CFO, Jai Agarwal, who will be leaving us early in the New Year to pursue other opportunities. Jai has made valuable contributions to ARI during his tenure, and we will be, sorry to see him go. One of his greatest contributions was building a strong team below him and he will leave us in good hands. We have already begun a search for his replacement and we expect his departure will be seamless.

And with that, I will turn the call over to Jai for the last time to review our financial results.

Jai Agarwal -- Chief Financial Officer, Treasurer and Secretary

[Technical Issues] Stuart. Our distributable earnings for the quarter were $49 million and $0.35 per share, and GAAP net income available to common stockholders was $57 million or $0.38 per diluted share. GAAP book value per share prior to depreciation and the General CECL Reserve increased slightly to $15.54 from $15.48 at the end of last quarter. This increase was primarily due to unrealized gains on currency hedges. The loan portfolio at quarter-end was $7.3 billion, a slight decline from the end of previous quarter due to increased loan repayments. The portfolio had a weighted average unlevered yield of 5.2% and the remaining fully extended term of just under three years. Approximately 89% of our floating rate U.S. loans have LIBOR floors that are in the money today, with a weighted average floor 1.20%.

During the quarter, we made a $180 million first mortgage, $141 million of which was funded. We also made $113 million of add-on fundings for previously closed loans. With respect to our borrowings, we are in compliance with all covenants and continue to maintain strong liquidity. We increased our secure facility with J.P. Morgan to $1.5 billion and extended the maturity to September of 2024.

We ended the quarter with almost $600 million of total liquidity, which was a combination of cash and capacity on our lines. Our debt-to-equity ratio at quarter-end decreased slightly to 2.2 times and we ended the quarter with $1.7 billion of unencumbered loan assets.

Lastly, I wanted to thank Scott, Stuart, the Board at ARI, and most importantly, all my colleagues at Apollo for their support over the last five-and-a-half years. I feel very fortunate to have been offered this opportunity and I will truly miss working with this very talented group of individuals.

And with that, we'd like to open the line for questions. Operator, please go ahead.

Questions and Answers:

Operator

[Operator Instructions] Our first question comes from Doug Harter with Credit Suisse.

Doug Harter -- Credit Suisse -- Analyst

Thanks. Stuart, I know it's always tough to read into too much into just a few loans but it looks like the yield the -- on new loans this quarter was -- it was significantly lower than prior quarters. Can you just talk about whether those were kind of one-offs or is that kind of where you see the market for new loan opportunities today?

Stuart A. Rothstein -- Chief Executive Officer, President

I think it's a mix of both, but I think directionally it's fair to say that spreads are tightening. I think you've heard me say on previous calls, it is clearly a market that favors the borrower versus the lender, and I think sitting in my seat or Scott sitting in his seat, I don't think any of us are surprised that things are tighter just given where yield alternatives, in general, are trading these days. So, I'm not sure I would take what occurred in the quarter and ascribe it as the go-forward -- returns on a go-forward basis. But I think it's fair to say that certainly relative to where we sit today versus where we sat two years or three years ago, the ROEs achievable by putting dollars out on a call it light basis risk for risk are certainly tighter today than they were two years or three years ago.

Scott Weiner -- Chief Investment Officer

Yeah, it's Scott. I would just add, financing costs have also have come in, and leverage more available, so we've also found that our financing costs in Europe are more efficient than the U.S. So, the mix matters, right? So, that's an unlevered yield. But I think when you look at it on a levered yield after the financing, the returns are in line with what we've always targeted.

Doug Harter -- Credit Suisse -- Analyst

And just, Scott, if you could just remind me, it's kind of what those levered returns are -- that range you're targeting today is?

Stuart A. Rothstein -- Chief Executive Officer, President

I mean, I think we've always thought about 11%-plus, Doug. I think we were fortunate enough to have some years where we could overachieve that, but for the 12 years of existence at ARI, we've always thought in terms of levered ROEs is-it is, call it plus or minus 11%.

Doug Harter -- Credit Suisse -- Analyst

Got it. And while there's -- might be different than the asset yield and the funding, is that pretty consistent across the U.S. and Europe?

Stuart A. Rothstein -- Chief Executive Officer, President

Yeah, they -- look, as I indicated in my comments, it's a little better in Europe, but net-net, if you look at what we're expecting to do in the fourth quarter. I think you'll see us achieve those types of returns both domestically as well as internationally.

Doug Harter -- Credit Suisse -- Analyst

Great. Thank you, guys.

Stuart A. Rothstein -- Chief Executive Officer, President

Sure.

Operator

Our next question comes from Tim Hayes with BTIG.

Tim Hayes -- BTIG -- Analyst

Hey. Good morning, Stuart. [Speech Overlap] My first question, just about the broader -- Apollo parent recently announced its goal to reach a trillion in AUM by 2026, and I'm just curious where you think Real Estate credit fits into that initiative. And do you expect five years from now, we see the team and origination capacity has materially increased and does that mean that ARI has also gotten bigger?

Just curious how you think ARI fits into that broader initiative?

Stuart A. Rothstein -- Chief Executive Officer, President

Yeah, look, it's certainly unknown what's going to happen in light of what markets afford opportunity, but I think it's fair to say, the real estate credit business broadly today at Apollo is roughly a $35 billion business, of which ARI represents about a quarter of that business. You know, I think we continue to feel optimistic about our ability to originate transactions, broadly speaking, across ARI and other places that we originate for. The real estate credit team is on pace for a record year just in terms of sheer transaction volume, and hopefully, my comments got the point across to people on the call that we don't spend a lot of time thinking about quarters, and by the time we get to the end of the year for ARI, I think we're going to be very much in line with sort of pre-pandemic origination levels on behalf of ARI.

So, I think there's continued support for the real estate credit platform. It happens to work very well in combination between both ARI and what we do for our insurance -- affiliated insurance company balance sheet and what expectation is for continued growth from this point forward. But obviously, subject to what goes on in the market.

Tim Hayes -- BTIG -- Analyst

Okay, makes sense. And then, can you expand -- you kind of gave a little bit of color just on New York City office trends, and maybe you could expand there? I feel like headlines these days are mixed with both positive and negative trends. So, I would appreciate hearing more about the fundamentals of assets underlying your specific loan portfolio or to that -- anything from the equity team you can share, or just any other observations you have as it relates to New York City office? Thanks.

Stuart A. Rothstein -- Chief Executive Officer, President

Yeah. And let me -- I'm giving you the perspective both as a -- what we've done for ARI as a lender, but also what we're doing as a firm, as a tenant, that continues to be committed to New York office space. I think what we're finding anecdotally is that there continues to be strong foot traffic and a healthy level of interest for newly created or recently renovated product. And obviously, given what ARI does as a lender, we're typically lending in situations where the real estate is being upgraded and improved, there is clearly a desire for those that are interested in New York office space, too [Phonetic] focused on what has been most newly created and what is most current in terms of finishes, standards systems, etc. So, I have definitely been encouraged by that across our transitional portfolio, and I think it can work [Phonetic] fully -- I think as you get to older product, more commoditized product, you are definitely seeing more in the way of sublease space and more in the way of product languishing because I think it's not uncommon as we've seen -- as I've seen in my career through multiple cycles -- When there is a little bit of softness in the market, it affords those who are looking to lease the ability to look at newer space that they didn't think they might be able to afford previously.

So, I think there is more continued bias toward a high-end, newly created space, and I think commoditized space will continue to struggle.

Tim Hayes -- BTIG -- Analyst

Got it, got it. Yet, I feel like that's pretty consistent with what we've been hearing from some of your peers as well, so I appreciate those insights.

And just kind of a follow-up on the office, and this is more in the CMBS market. But I recently read a stat that there is about kind of like $35 billion or so of CMBS or office loans within CMBS that are scheduled to mature between over the next, call it, three years or so, and a decent portion of that has 25% or more of their tenant roll expiring over that time frame.

So, I'm just curious going into a potentially higher rate environment with the notable headwinds to certain office loans, do you think that that creates any disturbance in the CMBS market or has the potential to create any disturbance? And then, on the other side, does that create opportunities for transitional lenders if some of these loans can be refinanced?

Stuart A. Rothstein -- Chief Executive Officer, President

No, I think it's a great question. I think it's probably too early to know what the net result is going to be. I think what we need to factor into all of that is just the sheer amount of capital that is continuing to seek opportunity. And does that mean [Phonetic] that things sort of never get to the point where it creates -- as your question I think implied real distressed [Phonetic] and real opportunity, probably too early to know. I also -- if your question was premised on the notion of a higher rate environment, and for some of us that are really old like myself, it's hard to believe that we're sitting here with the 10-year at 1.64 and it might go to 2, and all of a sudden that defines a high rate environment.

And so, I think, look, I think a lot can happen in three years. I think as I indicated in my comments, I think there is a path toward continued improvement, steady improvement, and not a lot of distress, I think if the economy continues along its gently sloping upward trend in terms of recovery. But we like you, as I think was implied by your question, we do keep a close eye on what the implications of inflation and a higher rate environment might be on the economic recovery over the next one year to two years. So, I think it's too early to have any real sense of conviction at this point.

Tim Hayes -- BTIG -- Analyst

Fair enough. Well, thanks for taking my questions this morning. Sure, anytime.

Operator

Our next question comes from Stephen Laws with Raymond James.

Stephen Laws -- Raymond James -- Analyst

Good morning.

Stuart A. Rothstein -- Chief Executive Officer, President

Hey, Stephen.

Stephen Laws -- Raymond James -- Analyst

Hey. So, now [Phonetic] we got a quarter on the hotel and the ROE, maybe wanted to touch on that kind of how are trends going with the asset? And then when we think about the operating expenses, how should I think about six versus variable expenses, as things improve with the asset?

Stuart A. Rothstein -- Chief Executive Officer, President

I think, look, I think to your point, we're only a month into the -- our quarter -- into this, but we obviously know the asset extremely well given our history with it. I think our -- I think we've done as an effective a job as we can in terms of cutting expenses at the asset. And I'm not sure there's much more to cut there. I think before the -- I'll call it the Delta uprising over the summer, the asset was actually on a nice path to recovery from a revenue perspective. I think we feel optimistic that there is more improvement to come on the revenue side as opposed to the expense side, as we move forward in future quarters. And I also think as DC begins to open up on a go-forward basis, I think there might be a path toward an exit at some point before the asset gets to, call it, full stabilization from a performance perspective because I think there were those on the capital side that we'd be -- what we'd be interested in acquiring an asset such of this -- such as this to ride the upside. And from our perspective, we'd rather turn the capital into a performing asset sooner rather than later if we could.

Stephen Laws -- Raymond James -- Analyst

I appreciate the update. And switching to the Brooklyn multifamily, I know it looks like the maturity at December of this year, I think you also recently reduced your specific CECL allowance. So, given, it looks like the Q says a more favorable market outlook. So can you maybe give us an update on that Brooklyn asset? And how you think that plays out in the coming months?

Stuart A. Rothstein -- Chief Executive Officer, President

Yes, so we've formed a partnership with a well-known real estate developer known as the Witkoff Companies. We are going forward in partnership with them and creating what will be a plus or minus 50-story multifamily tower, a combination of market-rate and affordable units. Effectively the demolition of the legacy assets has been completed, we would expect to do foundation work, sometime early next year. This will ultimately be a two-year build, a one-year lease-up. So, you're really looking about like a three-year development project that will take us into 2024. Though I do think sometime during next year we will put construction financing in place. I think there is -- given the strength of Brooklyn, given the strength of the New York multifamily market recently, I think there is potential for real upside to ARI economically if we execute correctly. But this is a two-year to three-year project with construction risk, lease-up risk, so we need to execute well. But I like where we sit today, looking forward in terms of what the potential is in terms of economic recovery and benefit to ARI.

Stephen Laws -- Raymond James -- Analyst

Great. Switching to the leverage side, I know prepayments have been a little elevated, but you cited I think roughly $900 million of fundings expected this quarter. As we move out of this kind of -- some turnover in the portfolio and the shift to really to more of a focus on first mortgages -- leverage now, I think was 2.2 at the end of the quarter. Where -- what is the target for kind of a higher mix of senior loans -- now in 6 months or 12 months of where you think you would like to run the portfolio from a leverage standpoint?

Stuart A. Rothstein -- Chief Executive Officer, President

Yeah, I think, as we think about asset-specific leverage combined with wanting to maintain access to the various capital markets that we've been able to access in terms of the bond market, the convertible notes market, the term loan market. And also, I think coming out of the pandemic very convinced that it is a prudent corporate finance strategy to keep some portfolio of unencumbered assets on the balance sheet, I think at the end of the day, when you sort of factor that all in, I think we probably run this business at somewhere between 2.5 to 2.75 turns of leverage on a sort of steady-state basis.

Stephen Laws -- Raymond James -- Analyst

Great. Appreciate the color -- comments, Stuart. And just in closing, Jai, good luck in the future. I've enjoyed working with you and appreciate your insight over the years.

Jai Agarwal -- Chief Financial Officer, Treasurer and Secretary

Thank you.

Operator

Our next question comes from Jade Rahmani with KBW.

Sarah Obaidi -- KBW -- Analyst

Hi. This is Sarah Obaidi on for Jade. My first question is: what drove the sequential decrease in income from subordinate loans? Is that related to the subordinate loans that is held for sale? And can you give any color on that asset?

Stuart A. Rothstein -- Chief Executive Officer, President

Yeah, I think what's driving the decrease in income on subordinate loans is both just the shrinking of our mezzanine loan portfolio in general, and then, I'd also refer you to the comments in the 10-Q around a portion of the mezzanine loan on what we refer to as the Steinway project, where we've also taken some action there.

Sarah Obaidi -- KBW -- Analyst

Okay. And my next question is, do you expect further provision recoveries?

Stuart A. Rothstein -- Chief Executive Officer, President

In general, I think again, the comments I just made to Stephen on the Fulton Street asset and Brooklyn leaves me optimistic about -- around that asset. So, I think there's a lot of execution work to go. I think the -- I think the provisions we've got today, I think, are appropriately reflective of the mix between our perception of value execution risk and path to resolution.

That being said, I think, sitting here today, I think both the Brooklyn asset and the Miami asset offer the best potential prospects for additional economic recovery. But I think they both entail a lot of execution risk, complexity, and time. And I think until we have more visibility there, I wouldn't expect any near-term change.

Sarah Obaidi -- KBW -- Analyst

Got it. And were there any significant loan modifications during the quarter?

Stuart A. Rothstein -- Chief Executive Officer, President

None. No.

Jai Agarwal -- Chief Financial Officer, Treasurer and Secretary

None.

Sarah Obaidi -- KBW -- Analyst

Okay. And just lastly, has distributable EPS reached a stabilized level at $0.35 or is there's still excess earning?

Stuart A. Rothstein -- Chief Executive Officer, President

Look, I think the EPS, which we out-earned -- the dividend level which we out-earned in the first two quarters, I think we covered it in the third quarter. I think part of it depends on how capital efficient we are, and doing the best we can to line up the combination of both repayments and new deployment, which is a ways -- a bit of a challenge in a market that is not a publicly traded market, but a market that is based on private origination and timing is a little bit out of our control. I think there is also -- part of it depends on how quickly we're able to reach resolution on some of the focused assets that are not generating a stabilized level of income or return, today.

So I think long term, I think there is potential beyond the $0.35. But I think in the near term, we've got some challenges both in terms of capital efficiency and focused assets that we need to work through.

Sarah Obaidi -- KBW -- Analyst

Got it. Thanks so much for taking my questions.

Stuart A. Rothstein -- Chief Executive Officer, President

Sure.

Operator

[Operator Instructions] Our next question comes from Rick Shane with J.P. Morgan.

Rick Shane -- J.P. Morgan -- Analyst

Hey, everybody. Thank you for taking my questions. And, Jai, [Speech Overlap] thank you for all of your help over the years. We will miss you.

Stuart, you talked about the competitive pressures and how that is impacting spread, and frankly, that makes a great deal of sense given both the technical factors we're seeing in terms of interest rates and the supply of capital in the space. I'm curious if you're seeing the same type of erosion in terms of structure in any way, whether it's covenants or business plans that you think are more aggressive?

I'm just curious because it sounds in some ways like you're a little bit more cautious, but recognizing what's going on competitively in the market from a pricing perspective?

Stuart A. Rothstein -- Chief Executive Officer, President

No, look, I would say at a high level and a good way -- and I always go back to '06, '07 as my touchpoint, I think in a good way, you're not seeing sloppiness on any sort of measurable level just yet. And I think that's a good thing. I think documents -or documents, I think structures or structures, I think to the extent people want to compete on a different view of underwriting, a different view of pricing, I think that's fine. And I think that's a reasoned way to compete on any given day, but I think as of sitting here today, I don't think we've seen any noticeable weakening in overall approach to the market among the peer set or the competitive set. I think the one thing we continue to watch very closely is obviously the growth in the CRE, CLO market, which I think some of you have heard me talk about for 12 years now. It is something that is potentially cause for concern. And maybe that's a little bit of PTSD coming out of 2008. But I also want to be very clear that to the extent our competitors who are committed balance sheet lenders, just at a moment in time, choose to finance their balance sheet through a CLO structure versus some sort of other type of financing structure, I don't think that concerns me at all. I think that is a moment in time, corporate finance decision. I think what we try and track as closely as we can and what would be the real concern for us at some point in the future if it became truly prevalent is those who enter the securitization market at a moment's notice just because they want to originate to securitize and have no intention of being a long-term committed balance sheet lender, we really again, haven't seen that in scale yet.

But again, the types of things that I look at, that you probably look at, as you think about a potential overall weakening in the market, those are the types of things we think about.

Rick Shane -- J.P. Morgan -- Analyst

Got it. That's very helpful.

And to extend that, now that the portfolio's 40% in Europe, you had mentioned that the competitive landscape in Europe is -- there is less competition in Europe. I'm -- clearly that impacts pricing. I am curious if you think you also get better structure, lower potential credit risk because of the reduced competitive intensity in Europe?

Stuart A. Rothstein -- Chief Executive Officer, President

Again, maybe on the margin, and just to make sure I put my comments in context -- less competition doesn't mean no competition, right? So, there is still plenty of people that we compete against. I think -- I think on par, we've been able to, A, win some large mandates on our own, but also I think our team in Europe has done a fantastic job of partnering with others to win large mandates. And has effectively also done a great job of winning repeat business with equity sponsorship, which seems to value working with us.

And I think where it -- where we can differentiate on structure, Rick, and this might be a bit of an esoteric point, but it's not necessarily on -- better structures that are much tighter for us in terms of protecting a lender. But when you think about the different regions within Europe and the different countries in Europe, and as I've said many times like Europe is not really a thing, it's just a continent where a bunch of different countries reside. I think we've proven our worth as a lender and our team has done a fantastic job of figuring out how to make structures work for us in the countries in which we lend in. And I think we've made that process very effective and efficient for the borrower. And I think they like doing business with folks who are able to make their life easy in terms of getting things to the finish line.

Rick Shane -- J.P. Morgan -- Analyst

Got it. Okay, thank you very much. And, Jai, thank you again.

Jai Agarwal -- Chief Financial Officer, Treasurer and Secretary

Thank you, Rick.

Operator

That concludes today's question-and-answer session. I'd like to turn the call back to Stuart Rothstein for closing remarks.

Stuart A. Rothstein -- Chief Executive Officer, President

Thank you very much, operator. And as always thank you to everybody for participating.

Operator

[Operator Closing Remarks]

Duration: 35 minutes

Call participants:

Stuart A. Rothstein -- Chief Executive Officer, President

Jai Agarwal -- Chief Financial Officer, Treasurer and Secretary

Scott Weiner -- Chief Investment Officer

Doug Harter -- Credit Suisse -- Analyst

Tim Hayes -- BTIG -- Analyst

Stephen Laws -- Raymond James -- Analyst

Sarah Obaidi -- KBW -- Analyst

Rick Shane -- J.P. Morgan -- Analyst

More ARI analysis

All earnings call transcripts

AlphaStreet Logo

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.