So How Are the Financial Experts Doing?

When it comes to 401(k) performance, you’d think employees might do better with the help of the so-called experts, right? Well, maybe not.

Here’s a disturbing study I ran across today coming from researchers at Michigan State University and the University of Notre Dame: Financial experts do not make higher returns on their own investments than untrained investors.

153430966There’ve been more than a few surveys in recent years that suggest employees would like more help in managing their 401(k)s and preparing for retirement. So you’d think putting their nest eggs in the hands of “the experts”—or at least people they think are more expert than themselves—would give them some level of comfort.  But if there’s any truth to the new study mentioned above, which looks at the private portfolios of mutual-fund managers, they’d be mistaken. Among other things, the study—titled “Do Financial Experts Make Better Financial Decisions”—found the experts were “surprisingly unsuccessful” at outperforming nonprofessional investors. (The study is slated to be published in an upcoming edition of the Journal of Financial Intermediation.)

To reach their conclusion, the researchers—Andrei Simonov, associate professor of finance at Michigan State University, and Andriy Bodnaruk, assistant professor of finance at the University of Notre Dame—compared the portfolios of 84 mutual-fund managers in Sweden against the portfolios of untrained investors and found “no evidence that financial experts make better investment decisions than peers.”

Simonov says he’s not denying there aren’t talented fund managers out there, but does suggest that there are “very, very few of these superstars, and the average investor probably can’t afford to invest with them anyway.”

(Though the study took place in Sweden, Simonov and Bodnaruk believe the findings are just as applicable to the United States and other countries.)

Whether you’re an investor or a fiduciary, the notion that these experts aren’t performing any better than the average nonprofessional investor probably isn’t going to help you sleep any better at night. Most of us would like to think the opposite was the case, especially in an environment in which employees seem to be more stressed than ever about their financial well-being.

Employees certainly don’t need yet another thing to be frightened by. Oh BTW, Happy Halloween!

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EEOC’s Honeywell Suit Draws Protest

124666886 -- wellness biometricsThe National Business Group on Health says the Equal Employment Opportunity Commission’s recent lawsuit against Honeywell International over that company’s use of biometric screening in its wellness program “will have profound implications for any employer that offers employees wellness programs with incentives for biometric screenings.”

Employees at Honeywell could face as much $4,000 in lost incentives and surcharges in 2015 should they decline to participate in voluntary screenings of their cholesterol levels, body mass index and other measures, the Wall Street Journal reports. Other companies have similar programs in place; at Honeywell, it’s the potential size of the penalties that caught the EEOC’s attention, says the WSJ.

However, the EEOC is at least partly to blame for failing to provide the business community with clear guidelines regarding how to ensure their wellness programs comply with laws such as the Genetic Information Nondiscrimination Act and the Americans with Disabilities Act, said NBGH President Brian Marcotte.

In a statement, Marcotte said employers have been “seeking guidance from the EEOC for years” regarding this issue, yet the EEOC has failed to provide it. “Their lack of clear guidance, plus the recent legal action, conflicts with the message of HIPAA and the Affordable Care Act, which encourages the adoption and expansion of programs that benefit the health of employees and their families,” he said.

Honeywell’s troubles are just the latest example in what appears to be an ongoing battle between employers and the EEOC over what companies can and can’t do with regard to wellness programs. Last month we reported on the agency’s lawsuit against Orion Energy Systems — the EEOC contends the company’s policy of requiring medical exams and screenings violates the ADA.

What should HR leaders do? Well, in addition to working closely with legal counsel when designing and implementing wellness programs, they need to ensure they’re being applied uniformly, regardless of age, race or disability, attorney Anna Maria Tejada of Kaufman Dolowich & Voluck told reporter Kecia Bal.

“You can’t just say everyone can do it and then require a health screening or blood test. Then you exclude certain people. You can’t, in my view, make the wellness program a requirement that will affect the terms and conditions of a person’s employment. And, if someone refuses to do it, you can’t fire them.”

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Lost in the Email

emailEmployers may be starting to feel as if they’re running out of acceptable ways to send FMLA disclosures to employees.

In August, we reported on Lupyan v. Corinthian Colleges. In that case, an appeals court left a jury to settle a dispute over whether an employee ever received an FMLA Designation Notice that her employer claimed to have sent via first-class U.S. mail.

At the time, Ellen Storch, a Woodbury, N.Y.-based partner at Kaufman Dolowich & Voluck, told HRE that employers and HR should “do more than the law requires when providing employees with FMLA notices,” sending them in multiple ways that create evidence of receipt, such as certified mail or an overnight carrier.

Just don’t send them by email. Or at least not only by email, anyway.

That’s what a Michigan district court recently said in Gardner v. Detroit Entertainment, LLC, sending the case to be decided by a jury, after determining that email is not a reliable way to ensure an employee has received FMLA notices, as the defendant company couldn’t provide proof the employee had gotten them.

Some background:

According to the suit, Summer Gardner, who had been an employee at the Detroit Entertainment-owned MotorCity Casino since 1999, “was on and off intermittent medical leave for various reasons” from 2004 to 2011. In September 2011, Gardner was absent on intermittent FMLA leave nine times, which was “five more than anticipated by her physician, and … she also had called off work every Sunday that month,” court records indicate.

On Oct. 7, the casino sought recertification of Gardner’s degenerative spine disorder, emailing a letter to Gardner requesting that her healthcare professional re-certify the basis of her leave by Oct. 25, 2011. Gardner maintains that she did not open—and thus did not effectively receive—the email in time to respond by the specified deadline.

As such, Gardner did not submit the recertification paperwork in time. An automatically generated follow-up letter was sent to Gardner, advising her that her intermittent leave was now only approved from July 1, 2011 to Oct. 6, 2011, and that her leave request from Oct. 7, 2011 to Dec. 12, 2011 was denied, “due to the lack of recertification documentation.”

Gardner was ultimately let go for what were now considered unexcused absences. She sued, claiming her firing violated the Families and Medical Leave Act.

I asked Storch for her thoughts on this case, and her message for HR leaders was much the same as it was in August: use multiple channels to send disclosures, ensure that notices were received, keep meticulous notes and documentation, and carefully consider the intended purpose of the FMLA before terminating an employee who has exceeded the leave entitlement or has failed to comply with a technical obligation under the Act.

“Use multiple methods of communication, at least one of which can be used to prove receipt by the employee,” says Storch, noting the employer in both the Gardner and Lupyan cases used just one way to send notices, which created an issue of fact precluding dismissal of the complaints on summary judgment.

“Make every reasonable effort to ensure the notice is actually received by the employee before terminating an employee on an FMLA technicality,” she adds. In MotorCity Casino’s case, the organization “could have simply asked the plaintiff in person about the requested recertification.

“Had the employer done so,” continues Storch, “it would have learned the employee had not received the request, and the suit could have been avoided.”

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Introducing: Retail Robots

The retail world is going robotic, according to the Wall Street Journal (sub. req.):

Lowes Cos. is introducing robotic shopping assistants at an Orchard Supply Hardware store in San Jose, Calif., in late November. Lowe’s, which acquired Orchard Supply last year, says this is the first retail robot of its kind in the U.S.

The “OSHbot” will greet customers, ask if they need help and guide them through the store to the product, according to the report. The 5-foot-tall white robot also reportedly houses two large rectangular screens—in both the front and back—to enable video conferences with a store expert and to display in-store specials.

The robot’s head features a 3-D scanner to help customers identify items and OSHbot speaks English and Spanish, but other languages will be added.

OSHbot , the WSJ story notes, was co-created by Lowe’s and startup Fellow Robots, but the companies declined to disclose how much it cost to produce.

But while cost continues to be a hurdle to the creation and implementation of more robots in our realm, as the technology matures and becomes more affordable, experts say, more robots will begin to appear not only in retail, but restaurants and other kinds of businesses as well. Indeed, just a few months back, Starwood Hotels & Resorts Worldwide Inc. introduced a room-service robot at its Aloft hotel in Cupertino, Calif.

“I think we’re going to see a rush of companies wanting to be the first [in their industry] to have robots,” said Andra Keay, managing director of Silicon Valley Robotics, an industry trade association, told the WSJ.

So far, though, there’s been no word on whether the robot’s human coworkers will invite it to sit with them on lunch breaks.

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Psst … Gossip Isn’t All That Bad

More than a few times in your career, I’m sure you’ve walked by the watercooler and witnessed two folks talking in a whisper. Were you to assume the participants were engaging in some gossip (hopefully not about you), you’d probably be right. We all know gossip is one of the most popular of sports—one most of us have engaged in at some point in our working life (perhaps more times than we’d like to admit).

148242887Gossip, typically, is seen as something that’s unhealthy and counterproductive—and therefore something that should be discouraged. (Remember, no one likes a gossip, right?) But I recently ran across a just-released study (published in Personality and Social Psychology Bulletin) suggesting that being on the receiving end of gossip can actually be beneficial, helping individuals adapt to their social environments, illustrating how they can improve or revealing potential threats.

To reach these conclusions, the researchers at the University of Groningen (in the Netherlands) conducted two studies. In one, they asked participants to recall an incident in which they received either positive or negative gossip about another individual. They then were asked questions intended to measure the self-improvement, self-promotion and self-protection value of the received information.

It turned out that the individuals who received positive gossip had increased self-improvement value, whereas those who received the negative gossip had increased self-promotion value. (Negative gossip also increased self-protection concerns.)

In the second study, participants were assigned the role of a sales agent and given either negative or positive gossip about another’s job performance. (Not boring you with the details, this study specifically looked at the differences between those with a “salient performance goal” and those with a “salient mastery goal.”)

Like the first study, positive gossip in the second study had more self-improvement value, whereas negative gossip had greater self-promotion value and raised self-protection concerns. Negative gossip, meanwhile, elicited pride due to its self-promotion value since it provided individuals with information that justified their self-promotional judgments.

The researchers said they figured the participants would be more alert after receiving positive rather than negative gossip because they might find positive gossip provides a source of information they can learn from. But to their surprise, alertness was high in both positive and negative gossiping situations, probably because both forms of gossip are highly relevant for the receiver.

In a press release on the findings, lead researcher Elena Martinescu also noted some gender differences in the studies. “Women who receive negative gossip experience higher self-protection concerns, possibly because they believe they might experience a similar fate as the person being the target of the gossip, while men who receive positive gossip experience higher fear, perhaps because upward social comparisons with competitors are threatening.”

Of course, no one, including myself, is saying employers and HR leaders might start to design workplace initiatives that encourage gossiping. (I’ll leave it to you to imagine what such an initiative might look like.) But Martinescu and her colleagues suggest that we might want to be more open-minded about such behaviors, noting that being on the receiving end of gossip about other people might provide a valuable source of knowledge about ourselves.

Richard Marcus, a business psychologist and executive coach based in Philadelphia (who I recently shared the two studies with), agrees the findings offer a few insights worth considering, including the notions that discussion about an individual’s performance could have a positive value whether he or she is there or not;  informal communication about performance could help to raise the bar by getting everyone involved and staying focused on performance; and that indirect criticism could have value both for the individual who is the subject of the criticism and those around him or her.

But Marcus also adds that the findings don’t diminish the fact that gossip can also have some obvious negative consequences, including putting too much focus on the individual and not the team; breeding distrust among co-workers; and wasting energy worrying about how individuals are being perceived and judged.

All points that are also well worth considering the next time you head in the direction of the watercooler.

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Microsoft CEO Touts Equal Pay after Apology

Satya_NadellaIt seems Microsoft Chief Executive Officer Satya Nadella (at right) is still in apologetic mode after making some ill-advised comments at a recent conference that, in essence, discouraged female employees from asking for raises.

Apologizing immediately afterward, Nadella now says in this Oct. 20 Time magazine online article, that men and women at Microsoft are paid equally. Clearly, the need for more positive spin is still there.

Here, in case you missed it, is Josh Eidelson’s Oct. 13 post on Bloomberg Businessweek‘s Politics & Policy site about whether Microsoft’s female employees have grounds for a complaint with the National Labor Relations Board, based on what Nadella said onstage at the recent Grace Hopper Celebration of Women in Computing Conference in San Francisco.

The post also mentions that Nadella apologized and retracted what he said just hours later in a companywide email, calling his gaffe “completely wrong.” For the record and according to Eidelson, here was his egregious response to a question someone at the conference posed about what he would tell women who are hesitant to ask for a raise:

“It’s not really about asking for the raise, but knowing and having faith that the system will actually give you the right raises as you go along. And that, I think, might be one of the additional superpowers that quite frankly women who don’t ask for a raise have. Because that’s good karma. It’ll come back, because somebody’s going to know that’s the kind of person that I want to trust. That’s the kind of person that I want to really give more responsibility to.”

Wilma Liebman, who chaired the NLRB during President Obama’s first term and now lectures at Cornell University, says in the post, “You could make a very clear argument that [such a comment] means, ‘Don’t ask for a raise, and if you ask for a raise, you’re not going to be trusted.’ And ‘you’re not going to be trusted’ translates to ‘you could be in some jeopardy.’ ”

The issue raised in the Businessweek piece, of course — since it considers NLRB review and possible enforcement of Section 7 of the National Labor Relations Act — is whether Nadella’s message explicitly chills a protected concerted activity; i.e., a group of Microsoft women banding together in search of higher pay.

Lawyers are mixed on that one. “If a group of women said these comments chilled them from seeking together to get better pay in the workplace, they could file an unfair labor practice claim with the NLRB,” Paul Secunda, director of the Labor and Employment Law Program at Marquette University Law School, is quoted as saying in that story.

On the other hand, the story says, Samuel Bagenstos, a University of Michigan law professor and former Department of Justice official, doubts Nadella’s comments would merit NLRB review, considering he didn’t specifically address that kind of group activism. “Asking for a raise for oneself only would count as concerted activity if there was an argument that the employee was asserting a grievance that was or could be expected to be shared by others,” Bagenstos is quoted as saying.

Hope B. Eastman, principal at Bethesda, Md.-based Paley Rothman and co-chair of its employment law group, who I spoke with about this, concurs. “The fact that Nadella has apologized and retracted his statement, and the fact that his comment was in the context of an individual woman asking for a raise,” she says, “makes it unlikely that the NLRB would take this on … .”

That said, she adds, “there have been studies suggesting that women do not negotiate salaries as well as men; this is an issue that needs attention.” So the silver lining, I guess, is that this issue was given new light through Nadella’s comments.

The Businessweek piece also brings up another story we followed in 2011 on this blog, when the NLRB issued a complaint against Boeing, claiming executives’ public comments about striking employees in the state of Washington suggested they were to blame for the company’s intended move to a new South Carolina site at the time. (Here’s one other mention of that story on this blog.)

As Eidelson points out, that Boeing story establishes “precedent for investigating public comments from an executive as alleged discrimination.”

And — aside from staying on that apparently long, arduous road toward equal pay — what’s the message for HR in all this? I guess check with your C-suiters on absolutely everything they intend to say publicly before they take the podium or stage …

If that’s even possible.

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Keep on (Food) Truckin’

Here in the Philadelphia area, we love our food trucks. Maybe it’s due to the large number of colleges and universities here (with their hordes of students and underpaid adjunct professors looking for a quick, cheap and tasty meal) — whatever the reason, Philly food trucks can offer you delights ranging from kebabs, Chinese food, falafel sandwiches and gyros to cupcakes, gourmet ice cream and water ices with flavors you’d never dreamed existed. food truckTheir popularity has spread well beyond the collegiate crowd: My town’s school district recently sponsored a food truck fair to help raise money for extra-curricular activities; the organizers were expecting about 1,000 people to show up — ultimately, more than double the number came, leading to hour-long lines at some of the more popular vendors.

So I’m not terribly surprised that the food-truck crowd is targeting a new demographic: office-park workers. A company called Roaming Hunger bills itself as a “hub” for organizing food truck events at companies. The company says it tracks 5,000 of the country’s “best and most popular food trucks” and that it has organized food-truck catering events for clients like Google, Nike, Geico and Ford Motor Co. Another vendor, Food Truck Caravan, also specializes in organizing these sort of events (their food-trucks vendors include ones with names like The Lobster Lady and Wok n Rolls). Then there’s Food Trucks 2 Go, which includes a “quote” from Orson Welles on its website: “Ask not what you can do for your country. Ask what’s for lunch.” (I’m not sure whether he really said that.)

Bottom line: If you’re looking to spice things up at your workplace, consider a food-truck event. I’m pretty sure you’ll have some happy employees.

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Lutz on Leaders: Why So Nice?

happy leaderRetired automotive executive, former Marine and best-selling author Bob Lutz is also fluent in several languages. And he’s probably pretty outspoken in all of them.

Never known for holding his tongue, the former vice chairman of General Motors took part in a Q & A with the Washington Post earlier this week. And he offered up his usual, unvarnished take on subjects ranging from Mary Barra’s performance as GM’s chief executive so far (“too early to tell,” but “the early signs are outstanding”) to the increasingly guarded stance taken by executives when addressing the public (“nobody is speaking clearly anymore”).

Lutz also spoke at length about what makes for a great leader. While he praised the “quiet, somewhat low-key, persuasive and very effective” style that Barra has displayed at the helm of GM, Lutz seemed to suggest the leadership model prevailing at many organizations in 2014 is, well, a little soft.

When asked to name the best leader he’s ever worked for, Lutz went all the way back to his high school days in Switzerland, calling teacher—and future member of the Swiss National Council—Georges-Andre Chevallaz “an extremely effective individual” who could “convince intellectually, and … had the ability to motivate positively. You never wanted to let him down.”

The corporate community could use a few more like Georges-Andre Chevallaz, according to Lutz.

Today’s leaders “follow a politically correct line and listen to all the 1980s Total Quality Management consultants who say you should always respect everyone, that there’s no such thing as a bad idea,” he told the Post. “Of course we all know that’s hogwash. Good leaders have to be able to criticize constructively. We just have too little of that in American business now. Everybody is way too nice to everybody.”

A dearth of constructive criticism aside, Lutz sees something else lacking in the workplace: Fear.

“I can’t tell you how essential that is: a fear of consequences, of messing up, of letting the team down, of doing something unauthorized,” said Lutz. “That fear has to be there; otherwise the place is out of control. All of the consultants who say you’ve got to take fear away in a corporation don’t know what they’re talking about.”

While he may espouse some old-school ideals when it comes to leadership style, Lutz also warned that too much of the same old, same old can actually damage an organization’s culture; a lesson he says he learned decades ago.

Looking back at his stint as head of product development with Chrysler in the 1970s and ’80s—when the company was integrating an influx of talent from Ford and GM to go along with “the old Chrysler guys”—the culture at Chrysler “was a ragtag bunch of misfits,” he said. “At Chrysler, everybody was from somewhere else. It made for a very interesting environment, because there was no dominant culture. What you rarely heard in meetings was, ‘You can’t do that, because we’ve always done it this way.’

“It was messy,” he continued. “But it was very effective and everybody had a lot of fun. The nice thing about an enduring culture is that you have stability. But stability in a rapidly changing environment can be a very bad thing.”

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Sniffling While You Work

For the first time in five years, the number of employees who said they go to work with the flu has dropped to 60 percent, after four straight years of increases, according to the fifth annual Flu Season Survey from Staples.

The 60-percent figure marks a drop from last year, and yet many employees still feel they can’t take a sick day, according to the office-supply retailer. Indeed, despite 88 percent of managers encouraging sick employees to stay at home, 40 percent of workers feel there is too much going on at work to stay away, and 31 percent show up sick because they think their boss appreciates it.

The Staples survey finds there are a number of factors that have contributed to the drop in employees going to work sick, including:

• Sick employees coming into work are now considered worse for office productivity than a security breach;

• Presenteeism recognized as a bigger problem than absenteeism;

• Employees are taking charge of their own health and wellness; and

• Recent virus outbreaks are affecting behavior.

“While we are encouraged that for the first time in five years the number of sick employees coming into work has dropped, 60 percent is still a significant number,” said Chris Correnti, vice president of Staples Facility Solutions at Staples Advantage, the business-to-business division of Staples.

“Clearly there is still much work to be done. Recent outbreaks such as Enterovirus in the U.S. underscore the importance of fostering a culture of workplace wellness. ”

Meanwhile, last year was one of the worst flu seasons on record, reports outplacement consultancy Challenger, Christmas & Gray, with more than two-thirds of states reporting that the flu outbreak had reached “severe” levels, says CEO John Challenger.

The Centers for Disease Control estimates that, on average, seasonal flu outbreaks cost the nation’s economy $10.4 billion in direct costs of hospitalizations and outpatient visits.  That does not include the indirect costs related to lost productivity and absenteeism.   Online resource, Flu.gov, cites one study estimating that each flu season 111 million workdays are lost to flu-related absenteeism, which amounts to about $7 billion annually in lost productivity.

“New York alone saw more than 15,000 reported cases in the first month of the season, compared to fewer than 5,000 in the entire previous season.  These outbreaks and the resulting workplace absenteeism can have a significant impact on a company’s bottom line; particularly in smaller companies where illness can spread quickly and incapacitate large portions of a workforce,” Challenger adds.

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Cannabis Business Charges Full Steam Ahead

It came to my attention recently — actually in the writing of a news analysis last month — that there’s a big business growing around 465923899 -- cannabismarijuana, with 23 states now allowing for its medical use and two, Colorado and Washington, allowing for its recreational use.

(For the record, here’s that Sept. 29 news analysis — which actually aired Sept. 30 — examining the issue and what employers can really expect as more laws are passed. It was written just before the Colorado Supreme Court was to hear the case of Coats v. Dish Network and the issue of whether the plaintiff’s positive drug test should have been allowed under the state’s medical-marijuana statute. The court has yet to decide.)

With a keener understanding of this railroad coming down the tracks that is marijuana legalization and the business opportunities on board that train, I took special notice of the Hartford Courant‘s recent coverage of callback selections for a new web series called “The Marijuana Show,” aimed at giving specially selected and very “lucky ganjapreneurs” the chance to become “the next marijuana millionaire,” as the story puts it.

I also happened to notice in the piece that a handful of even-luckier finalists just finished participating in “an intense three-day business boot camp” that ended last Sunday, Oct. 12, prior to the finalists then pitching their marijuana-money-making ideas to investors in hopes of receiving financing, mentorship and attention on the show after the entire process has been filmed. (Here, too, is the Cannabis Business Times’ version of all this.)

So I reached out to co-producers Wendy Robbins, also the show’s director, and Karen Paull, to find out what I could about the boot camp. Their comments did nothing to quell the notion that there’s a most-definite marijuana-business movement afoot.

The camp, says Robbins, included “attorneys, an accountant [and] a branding expert [among others, and focused on] financial help with valuations, regulations, business-plan help, pitching advice and [of course] social media too.” Five out of the 10 finalists were even offered financing and some got mentoring help with their ideas — which ran the gamut from cannabis retail or leisure outlets to supply and distribution centers to growing establishments.

“Most shows have one winner, so we were blown away that half of the contestants got some sort of deal,” Robbins says.

“This is not a scripted show, nothing is predetermined,” adds Paull. “It’s a very organic process.” Indeed.

Looks like airing begins in December.

My story in September also references a Cannabusiness Accelerator job fair held in Seattle Sept. 19, “with the support of the [fast-growing marijuana] industry’s leaders to serve as a locus of networking and informational know-how [for job seekers], as well as a showcase for program partners, all suppliers to the new industry,” according to that company’s release about the event.

But the story does also include employment attorneys’ cautionary comments about the need for employers to not get too worked up. They needn’t, they say, ready themselves for all this marijuana-legalization and cannabis-business momentum to lead to across-the-board pot-induced workplaces (though statistics do show more employees are showing up for work under the influence).

Marijuana, they say, is still against federal law and employers still have every right, and responsibility, to maintain zero-tolerance policies because of that, and for safety and productivity reasons.

As Mark A. de Bernardo, executive director of the Institute for a Drug-Free Workplace and a Reston, Va.-based senior partner at Jackson Lewis, told me for that piece:  “This is not a crisis for employers. Their backs are not up against the wall.”

Not yet anyway, legalization supporters and cannabusiness entrepreneurs would probably say.

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