Spekulatius

I am positive on DIS, but I don’t think that DIS streaming channels will be much of a competition for Netflix. Netflix offers you a tremendous amount of content to watch for $10/month whenever and however you like. DIS will offer you some of their content, as well as sports (via ESPN) in segmented plans (I suppose). It will be a much narrower and spezialized offering. I don't see it as an either or. It seems more like when Lowes & Home Depot or WalMart & Target build right next to each other. I think both Netflix & Disney will co-dominate with Amazon, Sling, Roku & such squabbling for the offal. I believe that GOOG might become a strong player eventually. I also think that AMZN should not be underestimated, since it isn’t a separate offering, but there are over 100M prime members and it is a strong part of their Prime Suite offerings. I use AMZN prime video quite a bit and found it good enough to to cancel Netflix as I found more than enough stuff to watch there. DIS has to prove themselves in streaming and it is a high stake game for them. Those that cant make the jump from cable to streaming might be forgotten altogether within 10 years just like Blockbuster Video is forgotten.

I am positive on DIS, but I don’t think that DIS streaming channels will be much of a competition for Netflix. Netflix offers you a tremendous amount of content to watch for $10/month whenever and however you like. DIS will offer you some of their content, as well as sports (via ESPN) in segmented plans (I suppose). It will be a much narrower and spezialized offering.

Amongst the dead money stocks, I own, this is like an Egyptian Mummy. Owning this seems like owning a mummy and hope that it comes alive. What are the thoughts? I am not adverse to waiting, but is there a reasonable case, where this stock creates a return on investment for minority owners? The management gets their inflated salaries, the company jets and the pensions but the owners will have to do with $1 in annual dividends for how long?

I believe change in healthcare will be much much slower than some assume. The complexity, thr obvious importance of quality, inertia and the government involvement will very likely make this a multi decade effort. I am not sure that even AMZN has enough patience for this, they are known for their willingness to experiment, but they also quickly discard experiments that aren’t working either.

Opinion: LOL and I am certainly not bullish on crypto currencies. I wouldn’t even know how to argue why governements starting their own crypto currency/s would be bearish of bitcoin and al, in fact if anything, I would consider it being bullish.

Strange shareholder letter, IMO. Non direct relation to GOOG business. I believe he should have at least try to address GOOG way on how solve the privacy of data issues, if he does not discuss the business .

Where do you get that Disney cares about this?

My NFLX trade is a gamble, i won`t argue about that and my history with these type of bets is not favorable for me (even though this year i am at +-0 with these type of bets). I still do it from time to time, because i sometimes simply can`t control my gambling habits. But these bets are always very small. I tried to get rid of them by simply having no access to free capital in my brokerage accounts which worked very well in 2016, but since i trade other systems than my NCAV system now (OTC stocks eat all the available margin.) i have to give my gambling habits a little room from time to time. (So i try to control my bad habits by doing them at least half way intelligently.) Other than that i am trying a lot of different stuff and keep doing what works for me personally, the DAX hedge is something i tested and that worked in the past. But of course you can`t get payoffs of 5:1 or 8:1 and win on every single trade. I try to collect a number of quantitative systems over time that suit me and that simply work. My options system for shorting stocks that i tested from Sep 2017 to last month has not worked for me because trading and implementation costs where a lot higher than simulated and expected. So i stopped doing that, even though it was profitable. I am just not the guy who can buy an index fund or AMZN/GOOG/NFLX/AAPL/BRK.B and leave it alone. Its not in my DNA. But my performance over the past 5 years was in line with the market and i expect to do a lot better in the future, especially if we finally get a larger market correction. How do you value the knowledge that compounded over this time? This was meant as an open question, not as a critique. Option trading is tough, since time is your enemy and as writer stated expected value is negative. I tried hedging as well a few years ago, as an insurance against my longs as well as shorting and found that it didn’t work for me. It required much more energy and time, distracts from long term thinking and even increased the volatility of my portfolio rather than reducing it. So shorting for me is out now and if anything, I would do an option trade, where I know exactly how much I can lose, which kind of helps with sizing. Even Munger said, don’t do shorting and I think he is spot on for 99% of the investors. Viel Glück!

Outstanding bank. Actually most of the Turkish banks are pretty good. Also Sabanci family has an excellent reputation. Pity about Erdogan though. I got aware of AK Bank when I was in a Turkey on a business trip. it’s is the best Turkish bank by virtually all metrics, with an owner operator family controlling them. Trades at around book and a 6x PE. I agree that thr political situation is a mess and a lot of the educated folks don’t like Erdogan. The country itself has a chasm between western and Muslim and hopefully can resolve this. The country itself has a lot for potential and the Turkish people are hardworking and some of the business work hard to be competitive world wide and making visible strides too. Very nice folks although the security situation is concerning; there are bomb searches in every car driving in a hotel and guards with metal detectors. That said, I am keeping this a very small bet and probably would be trading out of this to take advantage of the volatility. I own a bit of AVAL the columbian Bank, - same idea, but more expensive and safer.

I could see them making a run at RLGY if their management looks for a buyer. Shares look somewhat cheap and they own some of the best known franchises, although I am not sure how much the franchise name actually counts.

Thanks, I kind of do to. Charter just seems to fit alongside Disney (edit: and SoftBank.) Thanks to Cable Cowboys, and of course thanks to Liberty. I actually think that CMCSA is becoming more like DIS. At one point, they wanted to buy DIS a couple of years ago, no they run into each other with SKY.

Still gambling on the ourcome of certain scenarios ? Do these trades generally work out for you. I am curious, if this is truly better time and money spent than being an armchair investor?

Based on my experience and the data that Zillow provides, it’s not good enough. I think if they were to make this a business, they would then have to sent an assessor over to each property to adjust the values generated from their database, but then again, what would their advantage be over a local who as access to their public data, Redfin’s data, the MLS and local knowledge. Local knowledge is where the rubber hits the road.

CHTR and CMCSA. Not today but a era recent purchases were AKBTY (Turkish bank, small position) and AVX (electronics distributor)

Does this mean you think that to be successful in servicing wind turbines, you would need to be an OEM? Just curious, because if that were the case, that would limit a lot of competitive threats from 3rd party servicing providers. When I was looking at the elevator industry, there were some 3rd party servicing companies in China that posed a competitive threat to the OEMs despite not manufacturing elevators themselves. I believe there is an advantage of servicing the equipment as thr OEM who build it, especially regarding warranties, Software upgrades etc. The OEM will be able to charge more everything else being equal and a third party would need to compete on cost.

A couple of points. I do think that today was an overreaction. The loss of video does not matter much and the overall revenue and EBITDA growth rate were within expectation. The numbers were satisfactory, but not as good than the stellar numbers that CMCSA and that is probably part of the reason for the reaction. It also does not make sense to look at FCF in a single quarter. FCF is a lumpy number and will move significantly from quarter to quarter. I expect more Capex spending due to wireless and when it comes to that 5G, the latter may be a few years oout. CHTR seems to have some catching up to do - their EBITDA margin is 37% vs CMCSA 40%+ and it is increasing very slowly. CHTR still trades at a premium to CMCSA on most metrics. To elaborate on BG2008 point, cable is a toll road business, similar to a pipeline or and utility. pipeline and regulated utilities trade at 10x EBITDA or higher while Cable trades at 8.7x in thr case of CHTR or <8x in thr case of CMCSA, despite somewhat similar economics. So cable companies are cheap right now. I like CMCSA better, because they are simply excellent operators and run their company with much lower leverage than Malone does. CMCSA leverage is 2.2x EBITDA and CHTR is 4.5 (roughly). This is why CMCSA can make a cash bid for SKY, which bumps up leverage to 3x, scale back stock purchases for a couple of years and then going back to 2.2x, while CHTR right now is close to the max of their leverage and can’t buy back stock in size, even though it would be a great time to do so. clearly not ideal, but that happens when you play to closemtomthr edge, like Malone likes to do. That said, I added to CHTR today and also bought a bit more CMCSA. I like them both, but hard pressed, I would rather own CMCSA than CHTR. Regarding Video, I think 10 years from now, the cable companies will just sell streaming packages with their broadband. The risk for cable and to some extend TV networks is that they have to compete against Netflix and Amazon video and both don’t give a damn about profits. Sure, channels with proprietary content like HBO, DIS or TV channels for live news like ESPN or CNN should be able compete, but may have to live with lower profit margins, but stuff like Discovery Channel is probably going to hurt a lot, folks will just cut the cord and forget about them. That why I sold out of cable content stocks like DISK or AMCX despite them being quite cheap. I think they will get Amazoned like retail gets killed now.

It is dangerous to compete with your customers. In a way, Zillow will then become more like Redfin, which is basically a RE broker with a Web Portal. I actually think that Redfin’s website and app is better, although Zillow updates status changes faster. I put our house on the Market and got an alert from Zillow, before our broker sent out the email that the listing is active Gambling by flipping house is a very risky move. It could consume a lot of capital and they have to compete with locals that should now the market and the intricacies of hoe to fix houses better than they do.

LOL. The annual shareholders meeting must have been da bomb. No cigars for the plebs, I guess.

CMCSA is cheaper though, although they own content and theme parks as well ( which are fine business, imo)?, so not totally comparable. I added some CHTR as well and a bit more CMCSA. CHTR fall shows how little we know about whatever own, imo. CMCSA has 40% EBITDA margins on cable compared to CHTR ~37%, so they do have some improvement potential.

Off topic: Spekulatius, I have been there, done that and got that shirt a couple of times, too - while buying and selling illiquid Danish bank stocks. In my cases, there was a market maker screwing me for commisions. The solution was for me to enable "Fill or kill" on the orders. I don't know if that's possible for you, though. I can do fill or kill(I think), but heard that it often leads to getting nothing at all. I don’t mind getting one share really, since the commission with IB is only $1/ trade. It’s just mind boggling that there is somebody out there selling you one share when you bid for 100 for a stock that hasn’t traded for 2 weeks before.

He should serve some goods from Mr Big’s cafe in St Tropez there, caviar, fine wine, cognac or some brews for the plebs. That is why breweries in Germany used to do too keep their disenfranchised shareholders happy even with crappy results. A hearty meal and free beer will do wonders for shareholders satisfaction.

Kevin, Partly reply, for my part, here. The cash position is needed as some kind of guarantee - as a cusion - against headwinds [<- did I really write that?] on projects in progress, proving / supporting that VWS will deliver, or pay. Management adjusts it via the buyback program towards shareholders, if deemed fit. The cash is mostly customers prepayments for booked projects. This is very common in constructions business. I would look at this as restricted cash, even though technically it isn’t. it leads to the company being flush when the backlog is high, but will shrink when the backlog is worked off. The idiot management from CBI in a similar management used the cash for stock buybacks and you can see where it got them. I don’t think it makes sense to d a SOMP for the manufacturing and the service business, be thr one wouldn’t exis without the other IMO. The service business had 20% EBIT margins which is twice that of the manufacturing business roughly. the overall numbers are actually a bit better than I thought and thr valuation seems reasonable. how cyclical will this business be, I have seen 50% revenue declines peak to trough in Capex business thwt seem similar to to Vestas. Servis would provide some stabilization , but it’s too small to carry the company and even preventive maintenance can be come an discretionary expense when the going gets tough. The Chinese will probably do better in 3rd or 2nd world countries than in Europe or the US - just my guess.

I listened to this book as an audiobook during my long weekend commutes. I think it is a fantastic read (or listen) abdndurectoy applicable to investing as well, even though it is mostly about how the human mind works. I highly recommend this book!

May I ask what gives you this confidence? Plenty of razor/razorblade models run losses on the initial sale. As for whether wind power is economic, I'd offer two thoughts: 1) The old assumption that intermittent sources of power have to be limited within the mix is just starting to break down. See the work Enel is doing to modulate demand and to use electric cars as "batteries on wheels". I expect intermittents to continue growing in the mix without issue. 2) On the negative side, solar costs are falling faster. If I see a threat to wind, it's not that it can't compete with coal and gas but that it can't, in the long run, compete with solar. Pete The razor/blade business model does not work for wind turbines, because most of the cost of ownership is determined by purchase price, since wind turbines don’t need much maintenance. Also compared to elevators and aircraft engines, there less issues with safety and a wind turbine is a standalone investment, rather than a component of it like and elevator (part of a building) or an aircraft engine being part of an airplane. I looked at this market a few years ago when Gamesa was still Independent and didn't like too much of what I saw. The margins are below other power business, competition is fierce and there are Chinese competitors which will hold the prices down, if now one else does. Just look at how they trashed the solar market. The big power equipment companies like GE or Siemens are in it, because it rounds out their product offerings, since wind power is here to stay, I think. They would rather sell gas turbines.

I am guessing that these business were never meant to be public, shares were closely held and the shareholders/owners knew each other and a lot of them were involved in the business. Then shares leaked to outsiders due due to sales from estates or from folks who didn’t care about the business. The insider owners don’t like it, but there is nothing they they can do about it -or is there? They can hide the financial, so outsiders are in the dark and maybe insiders can acquire shares cheaply, or at least run the company like they want to without others interfering. ^ The above is just a guess. I don’t know and each situation is different.