Spekulatius

It is worth it. LOL. Agreed. LT relationships are a different matter.

I recall the business to be quite volatile at times when Quintilles was public. Pharma is not outsourcing core R&D, they are outsourcing clinical studies etc. when one a big program fails to succeed, this goes from full steam to zero in a hurry, which creates revenue and earnings misses.

If I were an investor in his fund, I would take my money and go elsewhere since these side interest helping the performance of his funds in any way.

I don't doubt that at all. But, what will be the potential savings? A typical train might move 10,000 tonnes of freight and it requires how much labour to operate? Are there three guys in a train these days? So, if you eliminated those three guys, you'd save perhaps $100/hour each, or $300/hour total? So, you might save $300 for every 600,000 tonne-miles? Those savings don't strike me as a game changer. . Eliminating human error from railway operations, however, is probably a good thing. SJ I think improving the efficiency and reducing errors will be the largest benefit. Unions will probably be trying to block progress, but the same is going to happen with respect to autopilot trucks

I think we will have self driving trains before self driving trucks, since trains have already a dedicated lane, by definition. It should be much easier to implement and in fact there are already several systems operating.

min 24': "As I just said, you know, we think at this price today right now you're valuing the rest of our stuff at 5 times, I'm a buyer." I think he is referring to cash flow, not free cash flow. The more interesting question is what would the multiple of EV to EBITDA look like post merger. My rough calc: 810M shares x$29.5=$23.9B market cap+$43B debt~$67B EV. EBITDA =$7.5B$ (?) Post merger: EV=$67B-$22.5B~$44.5B - $OCF 7.5B -$2B=$5.5B; EV/EBITDA ~8.1x Most likely, there will be some taxes and probably some loss of synergies that make the numbers worse, but overall, this looks quite cheap. I am somewhat uncertain about this years OCF, since so much depends on exchange rates, which fluctuate quite a bit.

XRX’s Meter could as well fall under a protectonistic narrative and get cancelled by the POTUS, due to risk of job losses etc. The cost savings need to come somewhere after all. Unless I were damn sure that he intrinsic value is higher than the current EV, I would not touch this.

I think that FB is way cheaper than GE. GE does have a very low cash flow yield that is almost entirely consumed by the dividend, high debt load, pensions issues and probably more accounting skeletons hiding some where in the financial arm. None of the above applies to FB. I think FB FCF yield is equal or higher than GE’s, especially if you take the EV as a denominator rather than market cap (a bit unfair because GE has a financial arm)

I don’t think Thierry is ready to tap dance to Warren’s tune.

I think they paid $1.12B for GCI, but GCI only made just short of $20M in EBITDA (or Dr. Malone’s Version of it), so it seems a bit more expensive than 8.5x. The $20M figure only includes the results of GCI from March 9th through March 31st. Page 31 of the 10-Q shows the Pro Forma Results as if GCI was apart of GCI Liberty the whole quarter. The Adjusted OIBDA is $70.188 million in that scenario. Yeah, just realized that. The purchase price does not account for the assumed debt, which I think is in the order of $1.7B The projection from the filing is below: 2016A 2017E 2018E 2019E Wireless $ 81 $ 93 $ 114 $ 120 $ 117 Pay TV/Cable 101 105 119 124 127 Enterprise 89 109 117 121 121 Denali Media(4) 1 1 2 3 14 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total EBITDA(5) $ 272 $ 309 $ 353 $ 368 $ 378 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ % Margin 29.1 % 32.0 % 35.3 % 36.2 % 36.5 % Total Revenue(2) $ 934 $ 965 $ 1,000 $ 1,016 $ 1,035 Total EBITDA(2)(3) 288 321 365 380 391

GLIBA does not look simple at all, in fact it’s almost impenetrable. After each “simplification” , the remaining entities seem more complicated than they were before. I am guessing that this is the classical Dr. Malone playbook :o

I think they paid $1.12B for GCI, but GCI only made just short of $20M in EBITDA (or Dr. Malone’s Version of it), so it seems a bit more expensive than 8.5x.

One port company that I've spent some time on is Xinghua Port Holdings (1990.HK). There are a couple of things I like about it: - It's a recent spin-off from Pan-United Corporation (P52.SI), a Singapore listed company. Xinghua got its separate Hong Kong listing in early 2018. It's likely that some of the Pan-United shareholders aren't interested in owning the Hong Kong listed port business and that there is/has been some selling pressure. - The ports are majority owned by Xinghua, most Chinese ports are majority owned by the government. - The valuation look reasonable. The two ports they own are Changshu Xinghua Port Co. (85.5% stake) and Changshu Changjiang International Port Co. (77% stake). Both ports are adjacent to each other and located on the southern bank of the Yangtze River. Cargo types include pulp and paper cargo, steel cargo, logs, project equipment and containers. The valuation looks quite reasonable to me. The market cap is $1.02bn HKD or 821m CNY. Net income for 2017 was 71m CNY (excl. minority interests). Book value is 748m CNY. So you're paying 11.6x earnings and 1.1x book value for a business that should benefit from an increased flow of cargo traffic on the Yangtze. What has stopped me from investmenting so far is that the growing revenues for Xinghua's ports over the last decade haven't translated into higher profits. Those profits have been pretty stable, but not growing. I haven't done enough work on the company yet to figure out why this has not been the case. That said, the downside looks well protected because the business has been consistently profitable. Their debt level of 624m looks quite low as well. Operating cash flow was used to reduce debt by 100m RMB in 2017. This is an analyst report from 2016 about Pan-United that contains some useful info about the two ports: https://brokingrfs.cimb.com/Y6MF761G5YImQr9s1dfxyS25w2irrtNiSvvcfwmEOoJwOO-lDrnrqsZNN5k7Rm9nCpMAgM2u6NZ4Tg2.pdf (PDF) If you or any other readers here do some work on the company, I'd like to hear your thoughts. [Edit:] I had some feedback on Twitter about the company and they appear to have a bad safety record. There was an accident earlier this year, which I read about, in which four people died, but apparently there have been other deadly accidents at their ports in prior years as well. I read about Xinghua Ports in an hedge fund letter - I don’t recall which one - and put it on my watch list. Apart from a 10% price jump after ai put it there it seemed to me very much of a niche business with their specialization on pulp. I am guessing that one of larger ports in their area could easily desplace them, if they wanted to. Then there is this issue with the government owning the land, so thr port is more of a concession than an ownership. I think the land lease is up in 15 years or so, but don’t recall the exact date. I have read about La-Ka Shing and all his companies ( Cheung Kong, Hutchison ) seem like to be well run with no scandals whatsoever. I will have a closer look, as they seem to be a great way to invest in China with little worries.

I think it is difficult for value investors to succeed beating the index, when thr market is rising mainly because of multiple expansion, which is what has happened from 2012 to now basically. Multiple expansion is not so much driven by fundamentals, but rather by exogenous factors (interest rates, momentum etc) which tend to be ignored by value investors. I also think that many successful business starting out as asset light models means that value investors ignore them or underestimate their growth potential. The latter is really a paradigm shift, while the former will very likely reverse itself.

Why is using GCI acquisition price a conservative estimate of its value. It seems that cable assets are down quite a bit, since the acqusition was announced and there was an acquisition premium as well.

^ LOL. I think Europe is just not as good of a market for cable than the US. I found the idea that overall the ARPU in Europe will converge toward the US levels intriguing, but it just doesn’t work. sometimes, that’s just the way it is, things work different in different part of the work. Same with banking which is a good business in the US, but at terrible one in Europe, because NIM in Europe are much lower.

I haven’t thought about simply removing the PR cash flow and debt from the equation. my guesstimate was from the recent 10-q $6.2B in debt -$500M in cash = $5.7B in net debt. Puerto Rico had close to $1B in debt ,so if you subtract 60% of this you get $600M in LILA share PR debt or a debt sans PR of $5.1B which seems close enough to your estimate. I still think that LILA deserves only a lower multiple due to partly lower quality assets (prepaid wireless)higher cost of capital and just equal organic growth compared to CHTR (if that) and cash leakage ($300M for LILA if my notes are correct). I bought a starter early last year and it has been a steady drip of bad news with PR in fall being the culmination. LRBDY is almost the same, but not quite as bad. There is no reward for complexity in investing and everything being equal, simpler is better. The results just suck - OCF down, FCF negative, leverage worrisome. I didn’t expect good results and sold my starter position today and swapped the proceeds into CHTR. Much better business, similar valuation, better financed and much easier to understand. I do think that LILA will show better metrics once PR is recovered, but it won’t be enough of a difference to turn this around. No, it’s not a zero, just not a good investment. The best part of thr business is what used to be in the original LILA, thr chilean cable assets, the C&W assets are just mediocre. CHTR is just a better business, and valuation is almost thr same now. I think CHTR leverage is 4.5x, same than LILA net leverage, by CHTR is in thr US and has a more stable business, which means that their cost of debt should be less. LILA has currency risk and interest rates in local currencies are much higher than in the US, or they can take on debt USD and risk currency losses, unless they hedge them out, which also costs money. Can you run me through the math on how Charter and LILAK are the same valuation? Couple points that I think people are missing on value. First, LILAK doesn't own 100% of every business, including their debt. It only owns 80% of CWC (although 95% of its debt) and it only owns 60% of PR. Second, PR is bankruptcy remote, so it could go to zero and not effect the other subs. So here's the math I see: 1) Assume PR is a zero (I'm willing to bet that it's not) 2) Annualize the recent Q in OCF for CWC and VTR. This is obviously a rough way of doing it, and I'd bet they actually see some sequential growth, but for illustrations sake let's do it. So that gives you $918 of OCF for CWC and $420 of OCF for VTR. That also means $733 of proportional OCF for CWC, since they only own 80% (they own 100% of VTR), so in total that's $1,153m of proportional OCF in CWC + VTR. 3) With them owning 100% of debt on VTR, and 95% on CWC, it works out to $4,900 of net debt. 4) 171m shares outstanding at $21.2, gets a market cap of $3,625. 5) That means proportional TEV of $8525 and proportional OCF of 1,153, means TEV / EBITDA of 7.4x, assuming PR goes completely bankrupt. Run the same exercise on Charter, annualizing the last Q, and you'll get a TEV / EBITDA of 8.75x. Now, there are arguments on multiple for both sides (CHTR is 100% cable and is not a cash tax payer on the one hand, but LILAK has lower penetration, high value subsea business, good inorganic growth oppty and this Q shows capex intensity ex hurricane to be about the same as CHTR on the other hand) but that feels like a big difference, again assuming PR is worthless.

The results just suck - OCF down, FCF negative, leverage worrisome. I didn’t expect good results and sold my starter position today and swapped the proceeds into CHTR. Much better business, similar valuation, better financed and much easier to understand. I do think that LILA will show better metrics once PR is recovered, but it won’t be enough of a difference to turn this around. No, it’s not a zero, just not a good investment. The best part of thr business is what used to be in the original LILA, thr chilean cable assets, the C&W assets are just mediocre. CHTR is just a better business, and valuation is almost thr same now. I think CHTR leverage is 4.5x, same than LILA net leverage, by CHTR is in thr US and has a more stable business, which means that their cost of debt should be less. LILA has currency risk and interest rates in local currencies are much higher than in the US, or they can take on debt USD and risk currency losses, unless they hedge them out, which also costs money.

I have looked at 144:HK specifically and I can’t square their information in their 2017 annual report with Moody’s credit opinion. The leverage based on what I see on their website looks fairly low, while Moody’s opinion seems to suggest a ~6x Leverage (Fund flow is 15% of their debt per Moody’s). China Merchant port looks optically cheap, based on book value and current earnings ratio, But I am not sure, I understand the, correctly. It seems that he minority subs,of which they seems to be buying quite a few recently make a significant difference, but I am not sure why the debt of those would need to be consolidated. I do understand that this is a state owned enterprise with minority public shareholders, so their goal may be to further trade more so than making shareholders rich, although the two are not mutually exclusive. I also understand that ports in China are more like long term concessions, since the government owns he land underneath the ports and may take them back, on e the lease expires. seems less likely to occur with a state owned company, but what do I know. I would appreciate more color on this or similar companies, especially port companies. it’s a good business and there may be opportunities there, but also pitfalls, which makes comparing them to western enterprises that we are used to more difficult.

The results just suck - OCF down, FCF negative, leverage worrisome. I didn’t expect good results and sold my starter position today and swapped the proceeds into CHTR. Much better business, similar valuation, better financed and much easier to understand. I do think that LILA will show better metrics once PR is recovered, but it won’t be enough of a difference to turn this around.

I think existing car makers would have trouble to acquire as many resources than Elon Musk didnwith Tesla. We are talking about 10‘s Billion of Dollars here. Had an old fashioned car company done just thwt and got to a similar where Tesla is now, with the same amount of resources spent, the capital markets would have punished the car company and activist would be crawling all over them. Or to puthe it in ScottHalls words, Elon had thr better story and could sell it. Think about thr genius of calling his company Tesla, which has a mystique to it. Early on, he was able draw on the rich engineering resources from electric car enthusiast in CA that were willing to do or from him withoutnElon paying through thr nose. He was able to raise billions of dollars simply on price missed (most of which he cannot hold , at least not in a timely manner)l his for rays into SpaceX, Hyperloop, Flamethrowers, Mars exploration. All of her dreams and Elon can sell them better than anyone else and much better than car executives in suits from sure.

Yeah, I recall that one too. I loved Mungers answer when he was asked what he thought about thr question “I am glad she is not nine years old”.

Tesla needs to find someone else to manage his assembly line and pain shop. Car assembly lines and pain shops has been designed and run before and this isn’t rocket science ::)

When you buy JD for example, you don’t directly purchase a stake in and internet business in China, you buy a stake in a shell holding company in the Cayman isles, which holds IOUs on shares in an Internet business in China. If the government of the current managements decides to screw you out of your shares, then they can easily do so, and you keep holding your worthless shares in the Cayman shell company. That is one reason, why Chinese stocks with this structure should be much cheaper than comparable shares with a direct ownership structure.

It’s cheap if they stabilize their volumes. They lost between 3-5% of their volumes YoY and some margin as well from rising costs. I think the issue with the beer market is that the segmentation does increase, which leads to less volumes and earnings with their most profitable brands. I think they will have a hard time to increase their margins forward, as they planned to do. At 10x EV/EBITDA it’s too not expensive, but not very cheap either.