Broeb22

FND

The other point I forgot to make is that if you look at UHAUL parent AMERCO, their returns have been declining the last couple of years which tells me there is pressure in the space. I think UHAUL is probably the most competitively advantaged in terms of scale, diversity of offerings (trucks, space, ancillary rentals), and network for those who are moving. So to see their returns struggle suggests others must be as well, either by fighting on price or experiencing lower space utilization.

Re: Self Storage, I think Ed Chancellor's book on Capital Returns and looking at supply vs. looking at demand makes me very skeptical of all the building going on in self-storage. Same goes for the car washes and 5 minute oil change businesses. Supply is a lot easier to estimate than demand because there are zoning approvals and building that needs to happen, so you can make a reasonable guess if supply is on a certain trajectory then how much demand will keep pace with it.

Trisura raising debt to get back to 20% debt to capital. Not sure exactly where they plan to use this, because I think they are maxed out on premiums to capital, but when you can borrow at 2.6%, it doesn't hurt to have it. https://www.globenewswire.com/news-release/2021/06/08/2244039/0/en/Trisura-Group-Ltd-Announces-C-75-Million-Senior-Unsecured-Notes-Offering.html

Bought some ARLO and VZIO.

The media business has often been a frenemy type business. TW/D get revenue from YouTube TV today, as does Disney. Amazon Video sells a lot of other studios’ movies/shows, including some Warner Bros. has backed. I do believe like Vince does that this proposed acquisition changes the game for Discovery in a big way. They will still be a small fish relative to the others in the DTC streaming sea, but their chances of survival and even thrival(? Haha) long term just went up significantly. With that said, John Malone has never had a reputation for spending huge dollars, and despite Zaslav’s multiple apartments in the same city, Discoveey has never tried to spend big on content. So there is a learning curve there that the Discovery team will have to endure as they try to build massive hit shows (I can’t see why they would acquire TW if they were not going to try). Additionally Discovery will have way more debt than any of their major competitors, so they are somewhat more limited in how flexible they will be between leaning into content investment vs. paying off debt, which I view as a slight negative to the growth of the business. That negative is offset by the potential for leveraged returns that come with that level of debt and potentially strong organic growth. Finally, on the post-spin dynamics, I don’t think this will be as beaten up as some people think. I have participated in past RMTs (CBS radio and Entercom comes to mind) where everyone said there is this massive overhang that will cause the stock to sell off unnaturally. Well that didn’t really happen because of the dynamics of RMTs, to my disappointment at the time. We’ll have to see what the specific language is but I believe T shareholders will have the option to take Discovery stock or T stock. T stock is stable enough I’d bet that arbitragers will not make the post-spin dynamics as juicy here by isolating the value of the Discovery stub within T’s stock price. Just my 2 cents as someone who believes in and has profited from spin dynamics in general. I’ve just found RMTs are kind of an exception.

VZIO...buying the shitco version of ROKU

I would agree with this. Real Industry and Tribune Company were awful, Anixter has been meh, and Covanta has been a home run, though done nothing of late.

If putting low-end and premium content together is the biggest challenge the combined company faces, that's pretty good. They will have millions of OTT customers and a strong growth trajectory to start off with, so they will have time figure this out. I would also note that mixing low-end and premium content is probably not as difficult as you make it seem. New shows on Netflix are increasingly a mix between premium shows and low-budget murder mysteries. These super-channels (Disney+,Netflix, Discovery/Warner) are the new bundle that is replacing the hundreds of cable channels.

WFC and CIGI

I continue to think that TSLA is a bad company to short, especially in a time-constrained (but also capital loss-mitigated) way like a put. While I am skeptical of their long-term prospects, Elon has pulled numerous massive rabbits out of his hat over time.

Thank you for posting, because now I can say this. Yalla yalla bills, y’all.

I don’t know that the margins will be as high in the future if Tibbens is successful, but with a business like this where it requires little capital, I would rather push the pedal on growth than margin. I don’t know that Tibbens will be successful. He’s definitely doing something different and I’ll be paying attention.

That's definitely good perspective and I can see how that makes sense. I made a different (probably not better) decision (I paid the $300) when it came to an old HVAC unit at my rental property, so we'll see how that works out for me. Playing devil's advocate, might you be an outlier financially where you can afford the total cost of replacing an appliance where others cannot? I think back on the common statement made that 40% of Americans can't afford an unplanned $400 expense. I wonder how many could afford a $1,000 expense. Either way, my main interest in the company is that Tibbens seems to be approaching the company's opportunity in a different (broader) way. It would probably benefit them to "invest in better service" but if I thought this was the same old company it would not really interest me.

My dad did not use American Home Shield, so I can't speak to their service vs. others, although I would hope/expect AHS is more professional. Also, I want to caveat that my dad is pretty frugal so it's not outside the realm of possibility for him to get what he paid for in his home service purchase. Anyways, my dad got a home service plan for his house in Florida. I believe it was a 3 or 5 year contract, and he paid the cost of the contract upfront to the company. He noted that they never inspected the appliances for age or wear, and just quoted him a standard price. About 1 year into the arrangement, one of his appliances failed and instead of replacing the unit, the company basically gave him his money back, prorated for the amount of time that had passed. He fought company tooth and nail to get them to pay for his unit (that had already been replaced) but I spent the better part of a Thanksgiving weekend having him walk me through the whole saga. It sounded like an absolute nightmare. Finding a repair person when something breaks seems a whole lot better than dealing with that kind of experience. With that said, I think FTDR is working on improving the service they provide customers, and if successful in doing so they have a massive runway to take share from smaller competitors as well as grow the home service industry by attracting people who have never had one and perhaps getting people who have been burned to try home service again. The payment dynamics my dad cited where he pays upfront and then receives service later is a great opportunity to invest the float, one that even FTDR does not really do a good job of. Even a short duration portfolio yielding 2% would generate about $11 million annually based on current cash on hand of $538 million, not a trivial amount when their free cash flow is $175 million.