Spekulatius

Or GOOG which I think can do 10-14% annually and trades at <20x earnings ex cash. I think this growth rate implies that some some of the Google ventures come through. Visa is simpler because they just need to keep doing what they have been doing. I added quite a bit too Google lately, it might be the most straightforward value proposition in tech right now. From time to time, even great businesses trade at not so great multiples. For Visa, that was the case last December.

ection: Daily Dispatches Google to Buy Manhattan Building for 100 Times 1996 Price By Joshua Chaffin Financial Times, London Thursday, May 23, 2019 Google has agreed to pay $600 million to acquire a historic building in Manhattan’s Meatpacking District -- a hundred times what it was sold for in 1996 -- in a deal that reflects the tech company's growing footprint in New York City. For Doug Harmon, one of the agents who brokered the sale, it represents a career milestone: Mr Harmon has sold 450 West 15th St. -- also known as the Milk Building -- five times in a career that has spanned New York’s latest real-estate "Longevity is a brutal competitive advantage!" quipped Mr. Harmon, the chairman of capital markets at Cushman & Wakefield. The first time he sold the building, in 1996, the cobbledstoned neighbourhood was a gritty outpost with a reliable supply of transgender prostitutes and illicit drugs. It went for $6 million to Moishe Mana, an Israeli immigrant who grew wealthy after founding a local moving company, Moishe's Moving, and his partner, Erez Shternlicht. Under their ownership, the eight-storey industrial building led the neighbourhood's turn toward trendy fashion and media company sell the building to investment firm Angelo Gordon for $55 million, and then flipped it four years later to Stellar Management for $161 million, which then shifted it -- with his assistance -- to Jamestown, a developer, in 2013 for $284 million. Now comes Google, whose $2.4 billion purchase of the nearby Chelsea Market last year reinforced the neighbourhood's status as New York City's technology capital. It also helped to cement Mr. Harmon's standing as one of two uber brokers in a real estate-obsessed city. ...

Loved it too. However, I am a Coen brothers junky.

Ditto. this is. Particularly relevant one for most of us: http://freakonomics.com/podcast/change-your-mind/

Not a luxury apartment by any means (at least when bought in 1996), but the appreciation of this real estate asset in Manhattan beats pretty much anything out there: https://www.ft.com/content/e46c1558-7ccf-11e9-81d2-f785092ab560 Can the creator of this thread correct the title. It hurts my eyes...please.

CNQ looks interesting for example. They acquired Devon’s in in situ oilsand assets for 3x EBITDA. Now that looks like a good deal to me: https://www.cnrl.com/upload/multi_media_element/201/04/0529-devon-canada-asset-acquistion-presentation.pdf Actually, if you want to a good laugh read these press releases about the same transaction from the seller (Devon) and the buyer ( CNR). You couldn’t really tell they are about the same asset (Devon’s Jackfish heavy oil assets) and some of the numbers are absurdly far apart. Devon’s press release: https://www.devonenergy.com/news/2019/Devon-Energy-Announces-Strategic-Exit-of-Canadian-Business-for-CAD-38-Billion Sounds like they got a great price for a barely cash flowing asset. CNR press release: https://www.cnrl.com/upload/multi_media_element/201/04/0529-devon-canada-asset-acquistion-presentation.pdf Sound like they got the bargain of a lifetime (3x EBITDA for a long life asset) It’s pretty clear that Devon cherrypicked the numbers to make it appear like they got good money for an underperforming asset. that probably by picking different time periods(2018 vs 2019). CNR bought an asset with 128k/bod, 780M brl proved reserves with 1.265B future EBITDA/year. Devon sold an asset with 113k production, 409M brl proved reserves and 238M in field level cash flow. How can they both be right? I am guessing that a change in crude prices can move proved serves around and cash flow, but the extend of divergence is mind boggling.

CNQ looks interesting for example. They acquired Devon’s in in situ oilsand assets for 3x EBITDA. Now that looks like a good deal to me: https://www.cnrl.com/upload/multi_media_element/201/04/0529-devon-canada-asset-acquistion-presentation.pdf

I don’t think it’s simple or other, it would have been done already. However, now, we have a bunch of very savvy and well capitalized tech tech companies which have already established their own network effects and know a lot about their customers. This is not something that existed 10 years ago.. I any case, the discussion has been quite helpful, for me at least.

That depends on how you define "growing." I believe their "volume" defined as subs to MVPDs that pay Fox to rebroadcast their channels is declining, but they believe they can more than make up for that through increased or alternative pricing, e.g., high per-sub retrans fees (or fixed fees from certain Fox affiliates), higher reverse retrans, etc. Tobacco companies have shown you can have great shareholder returns despite declining volume, but it's not easy. They're also quite open about building the Fox broadcast channel on live sports. That has worked for them for decades, but will it continue to work if other players start to bid up those same rights? Put another way, if the internet continues to erode the Fox network's historical competitive advantage in distribution, will Fox be able to extract any value from sports, or will a larger and larger share of their value accrue to the leagues? Or is this all overblown, because the vast majority of the value in Fox is in the cable channels, in which Fox is a content producer, rather than a distributor/aggregator like the Fox broadcast channel? I believe the vast majority of FOX value is with the news channel. They basically own the right wing angle on this. The NFL ticket is up in 2022, I believe, so they is something to watch out for.

That’s why I would have preferred Peugeot over Renault. Peugeot also has a family watching over, and I am sure they would have found common ground with Elkann.

Yes Rupert passing on the baton could be an issue. There is currently a good writup in VIC available, which also compares this to CBS. I looked at CBS and passed on it, because of the issues with the owner and Viacom as well as capitalizing programming, leading to FCF being smaller than earnings. FOX does not have either issue. I think FCF is 9-10% ( back if the napkin calc, so I could be off a bit) and this business is growing. Next year is election year, so it should be good for TV, especially Fox News. Small starter position as I want to learn more and get a better feel. I dumped some more cyclical stocks yesterday and rather recycle this into Stock/business like FOX.

https://www.google.com/amp/s/amp.ft.com/content/e46c1558-7ccf-11e9-81d2-f785092ab560 Manhattan building is a 100x Bagger in 22 years. Imagine buying this with leverage...

Amazon would be the most likely company to start this. Paying 2% on all their revenues for debit/CC processing is huge. They know a lot about their customers, have cloud capacity, scale and a history of going after someone else’s margin. Maybe they even would use Visa or MC infrastructure, but would they allow it? It would a significant conflict of interest with their customers.

Interesting discussion. I still think there is risk of disrupt on in this sector. sure Visa and MA only take 0.2%, but the total take from banks or CC companies is more 3%, which is actually quite significant when we talk about larger sums. That’s why car dealers don’t take a CC’s to pay for your car , except a down payment. Same for very small sums. So there is opportunity for disruption, which could come via Visa and MA, but if Visa would allow an alternative source, they would piss off all their customers. So I think they might be tied to the mast. But if someone were to take totally new approach, then quite likely the total cost of payment could be reduced to a fraction of what’s out there. I think for large payment, actually a crypto solution might work, but I have no idea. perhaps this goes via Visa or MC, but I am not sure.

Awesome interview. I really enjoyed the The whole thing, especially the Q&A session towards the end. Druckenmiller is always worth listening to, whether you agree with him or not.

These people tend to overlook what the cost of cash is for merchants. Higher security and transport cost, etc. Cash isn't free either. Cash is better for taxe avoidance. That’s why many like cash.

Corteva was spun off. Lots of investors apparently sold the spin and bought the remainco. Yeah weird trading - CVTA might be the bargain here- lots of opportunity to improve the margins. DD almost closed the valuation gap to MMM. The spike in DD shareprice from $72 to $76 towards the end of the trading session seem to be when the machines took over.

Steven Kiel US on the other side and buying, FWIW.

Yep, FB and GOOG Trade at sub 20x PE ex cash and have higher organic growth rates than Visa or MasterCard. I was a buyer in GOOG today and I‘d argue it is a much better buy than both of the above right now. And with all quasi Oligopolies, the political risk is all to real.

Bumping this again, as It gets cheaper. This is a good business and the owners may sell out at the right price. It still trades at premium to other TV stocks like CBS but perhaps deservedly so. I am putting this on my watchlist. It may be the best TV property money can buy right now.

Same here. I also bought CTVA.

What's your math here? Organic growth alone isn't enough to know if 30x is expensive. If you get 10% growth at ridiculously high ROIC and incremental margins, don't need capital so you buy back shares with FCF, the leverage going down from the top line to the bottom line can easily mean that per share value increases 15-20%, and if the terminal value is high, 30x can easily be a bargain. If V has a 3% FCF yield, then they can buy back 3% of their shares annually, so that gets you 13 % earnings growth/ share, unless they increase margins ( which are already quite high) or lever up ( which at these multiples isn’t all that impactful either. The big issue is how long the current economics persist or to frame it in other terms what the exit multiple will be in 5 or 10 years. I do agree that Robin Hood, Uber and the likes more likely use Visa/ MC‘s infrastructure. I believe the bigger risk is completion from new Entries like Amazon, Apple, FB, Google who know a lot about their customers and surely can create an alternative infrastructure. Alternative rails already exist- Discover can be bought for just $25B and trades for less than 9x earnings. A deep pocketed buyer could get instant scale, then overlay a better tech and then probably be up and running. The combined Market cap of MA and V is $600B, so it certainly is an attractive market.

In order for V and MC to work out, you need to assume that no new rails are going to be build in the foreseeable future. Any new rail in payments is probably going to force lower pricing, so even a smallish market share may impair their value quite a bit. With the ascend of tech titans like FB, Google, Apple who own the customer relationship and can have instant scale, this scenario has become quite more likely, imo. It hasn’t happened yet, because existing rails work quite well and it’s cheap enough that competitions don’t bother, or had easier target markets to go after. However, I think the tech is not a hurdle any more. One addition vector of attack could bento purchase an existing rail like Discover. Discover also works in China. Work quite well Everybody seems to think that doing what V and MA is doing is easy, eh? I'm sure that Apple and Facebook really need to deal with fraud on billions of transactions and deal tens of millions of point-of-sales, at reliabilities that are incredibly high, and losing money for years since before you reach scale you can't make money at 15bps (or less). And even if they charged 5 bps, would anyone notice and switch because of that? That's why Apple Pay runs on visa rails and the Apple Card runs on Mastercard rails. Because they want to focus on where they can add value -- the user experience -- rather than on overbuilding already existing massively complex infrastructure that would take years and years and years to get anywhere. I'm sure some will try to move some things over to their own rails and such, there's always competition, but the stock isn't priced at 200x, it's 30x for a business growing organically at 15-20% and needs basically no capital to grow at close to 100% incremental margins. Not that demanding. I know a lot of lesser businesses that are a lot more expensive. Organic revenue growth for V is probably around 10% going forward, which makes a 30x PE sort of expensive. Margins can’t increase forever.

In order for V and MC to work out, you need to assume that no new rails are going to be build in the foreseeable future. Any new rail in payments is probably going to force lower pricing, so even a smallish market share may impair their value quite a bit. With the ascend of tech titans like FB, Google, Apple who own the customer relationship and can have instant scale, this scenario has become quite more likely, imo. It hasn’t happened yet, because existing rails work quite well and it’s cheap enough that competitions don’t bother, or had easier target markets to go after. However, I think the tech is not a hurdle any more. One addition vector of attack could bento purchase an existing rail like Discover. Discover also works in China. Work quite well

Most of that 2 hours would be concentrated around 8-9am and 5-6pm... so I highly doubt that an autonomous fleet would dramatically reduce the number of vehicles required. At least the math won't be 1/12. Yeah - I doubt people are going to start commuting at 4 AM to make the robotaxi industry more efficient. Also, with no driver who cleans up the fast food wrappers and body odor smell? I'm sure they'll clean them between shifts, but how many times would you want to commute in a vehicle that smells like stale fench fries and sweat? Exactly - the utilization of a robot taxi fleet will be limit by the fact they most traffic occurs probably within 4 hours (2 in the morning, 2 in the afternoon ) during the day.