Packer16 Posted January 27, 2014 Share Posted January 27, 2014 I was close to selling but will hold on given the pullback. I have a FV of GM of around $55 so the warrants still have nice upside. Packer Link to comment Share on other sites More sharing options...
luck Posted January 29, 2014 Share Posted January 29, 2014 hi packer- Just reading about Li Lu of Himalaya Capital investing in Aereo and also came across this article: http://www.bloomberg.com/news/2014-01-28/how-t-mobile-and-aereo-will-change-your-life.html "The U.S. Supreme Court has agreed to hear a lawsuit brought by broadcasters, who say Aereo’s runaround is illegal. Broadcasters are worried that cable operators will build their own Aereos, threatening $4 billion in retransmission fees, which are expected to double by 2017. At the same time, Aereo challenges the cable industry’s ability to bundle channels into costly take-it-or-leave-it packages. And Aereo could also upset the comfy network-affiliate model by making, say, CBS’s New York programming available to Los Angeles viewers. Aereo’s CEO, Chet Kanojia, may be less colorful than Legere, but his aim is similar: to disrupt the cozy status quo that is lucrative for the big players yet leaves customers unsatisfied. Given your cable industry knowledge, wondering what your thoughts are on potential disruption? thanks in advance. Link to comment Share on other sites More sharing options...
Packer16 Posted January 29, 2014 Share Posted January 29, 2014 The most damage is going to be in big cities and to distributors in those cities. The large cable cos will figure out ways to make money with this and the small guys like GNCMA should be unaffected. I recently sold my TV holdings as they approached fair value. Packer Link to comment Share on other sites More sharing options...
luck Posted February 7, 2014 Share Posted February 7, 2014 hi packer- some great thoughts on the $DXM thread about risks related to the debt. wondering if you've ever looked at yellow media, $YLWDF? to me, it looks cheap on an EV/EBITDA basis. however, not sure how fast they will be able to move to digital and also how aggressively they will pay down the debt with the free cash flow. what got me interested in this was the new CEO & goldentree asset management's involvement. thanks in advance. Link to comment Share on other sites More sharing options...
jm25 Posted February 7, 2014 Share Posted February 7, 2014 hi packer- some great thoughts on the $DXM thread about risks related to the debt. wondering if you've ever looked at yellow media, $YLWDF? to me, it looks cheap on an EV/EBITDA basis. however, not sure how fast they will be able to move to digital and also how aggressively they will pay down the debt with the free cash flow. what got me interested in this was the new CEO & goldentree asset management's involvement. thanks in advance. If looking at Yellow, could always play it with the warrants. Link to comment Share on other sites More sharing options...
Packer16 Posted February 8, 2014 Share Posted February 8, 2014 I have looked at these in the past and took a quick look at Yellow. The primary reason I have not pursued this is the declining customer count revenue and EBITDA. These leveraged "melting ice cube" types of companies are like swimming against the current and in most cases I have been swept away in BK. An analogy is in the telcos but some of them having increasing revenue and EBITDA (GNCMA, ALSK and HCOM) and some having increases Q-over-Q (FRP) but most continue to decline (the rest of the telcos). If I could find a directory company with increasing revenue and EBITDA I would be interested but I have yet to find one. This may turn out to be a good investment, I don't know. All I know is I have tried to invest in these types of companies and have been carried away to BK (a weakness of mine) so now I stay away because I can find increasing revenue and cash flow business in mature/declining industries. Packer Link to comment Share on other sites More sharing options...
CorpRaider Posted February 10, 2014 Share Posted February 10, 2014 Issat you posting about leverage over on bogleheads? Link to comment Share on other sites More sharing options...
Packer16 Posted February 10, 2014 Share Posted February 10, 2014 That is me. Those folks appear to be more interested in discussing those types of items and I am receiving some nice contrary views. Packer Link to comment Share on other sites More sharing options...
yitech Posted February 10, 2014 Share Posted February 10, 2014 That is me. Those folks appear to be more interested in discussing those types of items and I am receiving some nice contrary views. Packer I just checked it out. Personally, I think 20% is conservative enough. I used more myself. Buffett does much more using insurance float though it's uncorrelated to the stock markets and he doesn't get any margin calls! His long-term bullish short puts (insurance float on protecting stock downfalls) on a basket of three indices are correlated with the stock markets though. But he doesn't have to post collaterals on these puts! I think a bit of leverage is fine if you are aware that you may need to dial it down when markets get volatile. In the long run, it does enhance returns... as Eric can attest... OK, I should stop here before I getting yelled at for promoting leverage. PS: Above is relevant only to stock markets... If you are take margin to long debt, you are effectively short credit spreads or creating a short CDS position, so you should watch over credit spreads of whichever debt you are long assuming margin interest rate stays constant. But margin debt are floating rate debt based on LIBOR or Prime, so you may want to invest in floating rate debt to partially hedge against yield curve mismatching. You can check out Ray Dalio's all-weather strategy... though it hadn't worked out too well last couple of years due to the volatility of yield curves caused by the anticipation(guessing) of Fed tapering. Link to comment Share on other sites More sharing options...
gary17 Posted February 10, 2014 Share Posted February 10, 2014 i think use of leverage also has to do your current age / job situation for me - because my portfolio is small enough that the leverage loss would be about my year worth of after tax salary so it'll hurt, but not the end of the world.... and i feel that instead of borrowing money for a bigger house in the overpriced vancouver market or a new car, i'm using that fund to buy good business with a good margin of safety - i think there's enough safety in my personally circumstance. also, i think when we start talking about leverage, we are talking more about trading stock - i rather think of it as borrowing to buy a business - just like how a company would borrow money to finance growth. just my 2 cents Gary Link to comment Share on other sites More sharing options...
jouni1 Posted February 10, 2014 Share Posted February 10, 2014 the bogleheads forum seems just like every other investment forum online; someone posts an opinion that differs from the commonly accepted one on that particular forum, and the intelligent and oh-so-funny almost personal attacks start. if those "wait for a bear market and ask again" guys knew about packer's returns, would they consider themselves as funny as they do now? it always surprises me how fast people come yelling "you're wrong" when they actually mean "i do things differently". ::) on the topic of leverage, i think a smart person has nothing to lose using some. under 20% shouldn't hurt anyone with a long term view and i have been using more than that for the last 8 years or so. Link to comment Share on other sites More sharing options...
CorpRaider Posted February 10, 2014 Share Posted February 10, 2014 That is me. Those folks appear to be more interested in discussing those types of items and I am receiving some nice contrary views. Packer That makes sense. I just wondered if it was you or another Packers fan and how much weight I should ascribe to the comments (if it is the guy from the state farm commercials, I might have to add some salt). I read posts over there but haven't ever signed up to write posts. Be sure not to tell them your investment record or they won't respond to you, because you cannot exist. heh. I like that Mel guy who posts about the midcaps. Seems like he's sort of hitting on the same issues Arnott and Greenblatt have with your standard market cap weighted index. I'm into the rob arnott and joel greenblatt type better indexing discussions over there. Link to comment Share on other sites More sharing options...
fareastwarriors Posted February 11, 2014 Share Posted February 11, 2014 the bogleheads forum seems just like every other investment forum online; someone posts an opinion that differs from the commonly accepted one on that particular forum, and the intelligent and oh-so-funny almost personal attacks start. if those "wait for a bear market and ask again" guys knew about packer's returns, would they consider themselves as funny as they do now? it always surprises me how fast people come yelling "you're wrong" when they actually mean "i do things differently". ::) on the topic of leverage, i think a smart person has nothing to lose using some. under 20% shouldn't hurt anyone with a long term view and i have been using more than that for the last 8 years or so. I agree. They are definitely not fans of any active management. But I also their advice is right for most average people. They have jobs and don't want to spend nights reading 10k's/etc. They should keep their investments simple and keep costs as low as possible. I think they are doing lots of good. But I do think Bogleheads forum offer lots of great advice on personal finance /taxes/etc. Link to comment Share on other sites More sharing options...
CorpRaider Posted February 11, 2014 Share Posted February 11, 2014 W/r/t to the leverage discussion (sorry, I haven't signed up for bogleheads and really don't think its going to be worth it to me), I agree with your assessment. One thought I've had was to find a CEF that could/would lever up say 20-30% via preferreds (auction rate preferreds would be nice) and that would invest in perhaps one of the RAFI indexes or even just a small cap value index (or heck even the S&P). Hopefully, it would have low to reasonable fees and a somewhat responsive management that would do something if the discounts got insane and intransigent. I've looked, but haven't been able to find one (there are some reputed "clones" but I don't like that uncertainty). SOR would work fine if they employed some leverage and pimco's stocks plus one (PGP maybe) is sort of in the neighborhood but the NAV premiums are just stupid. Also it is a global index tracker, so not spot on. I know you're familiar with CEFs given our discussion of the munis. Have you ever found anything like this? It seems to me as though it would be a nice way to implement the leveraged strategy because there would be no risk of margin calls, probably simply a risk of cutting off distributions to the common in case of a 2008ish event... Link to comment Share on other sites More sharing options...
Packer16 Posted February 13, 2014 Share Posted February 13, 2014 At one point John Neff ran a dual purpose fund and leveraged CEF. It was liquidated years ago though. I will let you know if find any. Packer Link to comment Share on other sites More sharing options...
wknecht Posted February 20, 2014 Share Posted February 20, 2014 Interesting LICT development: http://www.prnewswire.com/news-releases/lict-announces-receipt-of-non-binding-acquisition-proposal-246339371.html. I wonder what the offer price was. Link to comment Share on other sites More sharing options...
Packer16 Posted February 20, 2014 Share Posted February 20, 2014 Yes it would. LICT is pretty cheap but I know I lack of marketability is baked into the price. I also saw that a sub put a bid in for some the broadcast licenses that FCC is auctioning. Packer Link to comment Share on other sites More sharing options...
Ham Hockers Posted February 20, 2014 Share Posted February 20, 2014 not sure if anyone sent this around previously http://www.businessweek.com/news/2014-01-15/gabelli-back-in-airwaves-bidding-after-130-million-settlement Link to comment Share on other sites More sharing options...
gary17 Posted March 11, 2014 Share Posted March 11, 2014 Hi Packer I am wondering if you have looked at China Mobile (CHL - ADR) - ebitda of about $20B USD - practically no debt, so there is no lever... I am wondering what is the fair ebitda multiple for a wireless provider with no debt in a growing economy? China slow down is a real concern but I think telecommunication is now a necessity - be really interested to hear your thoughts. TIA Gary Link to comment Share on other sites More sharing options...
PJM Posted March 11, 2014 Share Posted March 11, 2014 Hi Packer I am wondering if you have looked at China Mobile (CHL - ADR) - ebitda of about $20B USD - practically no debt, so there is no lever... I am wondering what is the fair ebitda multiple for a wireless provider with no debt in a growing economy? China slow down is a real concern but I think telecommunication is now a necessity - be really interested to hear your thoughts. TIA Gary Gary - Just to keep in mind that the NPC announced last week that China will speed up 4G mobile network programs, build 100M fiber optic networks in cities and extend broadband connectivity to villages. This should help CHL that already has more than 700m subscribers. Link to comment Share on other sites More sharing options...
Kiltacular Posted March 14, 2014 Share Posted March 14, 2014 Packer, you looked at the Doosan preferred (000155)? I have bought the Hyundai pref. around these prices but only that one. Someone posted a good list on another thread: http://ify.valuewalk.com/wp-content/uploads/2014/02/moi201401_ideas-korea.pdf Many still appear to be cheap and I'm curious if you have sifted though some of these. Link to comment Share on other sites More sharing options...
Packer16 Posted March 14, 2014 Share Posted March 14, 2014 Hi Packer I am wondering if you have looked at China Mobile (CHL - ADR) - ebitda of about $20B USD - practically no debt, so there is no lever... I am wondering what is the fair ebitda multiple for a wireless provider with no debt in a growing economy? China slow down is a real concern but I think telecommunication is now a necessity - be really interested to hear your thoughts. TIA Gary Gary, This does look cheap at 3.0x EBITDA along with MBT (a Russian phone company). One thing these centrally focused governments are good at is building large telco networks. Packer Gary - Just to keep in mind that the NPC announced last week that China will speed up 4G mobile network programs, build 100M fiber optic networks in cities and extend broadband connectivity to villages. This should help CHL that already has more than 700m subscribers. Link to comment Share on other sites More sharing options...
Packer16 Posted March 14, 2014 Share Posted March 14, 2014 Packer, you looked at the Doosan preferred (000155)? I have bought the Hyundai pref. around these prices but only that one. Someone posted a good list on another thread: http://ify.valuewalk.com/wp-content/uploads/2014/02/moi201401_ideas-korea.pdf Many still appear to be cheap and I'm curious if you have sifted though some of these. I have looked at a few but they have increased since I started looking. Some of the ones I like are LG Corp (003555), SK Corp (003605), Lotte Chilsung (005305) and Hyundai HCN (126560). Packer Link to comment Share on other sites More sharing options...
gary17 Posted March 14, 2014 Share Posted March 14, 2014 Hi Packer I am wondering if you have looked at China Mobile (CHL - ADR) - ebitda of about $20B USD - practically no debt, so there is no lever... I am wondering what is the fair ebitda multiple for a wireless provider with no debt in a growing economy? China slow down is a real concern but I think telecommunication is now a necessity - be really interested to hear your thoughts. TIA Gary Gary, This does look cheap at 3.0x EBITDA along with MBT (a Russian phone company). One thing these centrally focused governments are good at is building large telco networks. Packer Gary - Just to keep in mind that the NPC announced last week that China will speed up 4G mobile network programs, build 100M fiber optic networks in cities and extend broadband connectivity to villages. This should help CHL that already has more than 700m subscribers. Thanks Packer I'm impressed how much you know about the telecom industry, even development in china. I need to stop watching the plane search on cnn and get some real reading done! ;D Link to comment Share on other sites More sharing options...
Palantir Posted March 14, 2014 Share Posted March 14, 2014 I am curious, to Packer or anyone else - I understand that EBITDA multiples are used to value small telcos, but for the VOD or VZ's of the world, is that still a relevant measure? It seems that they have much less growth CapX, so I would think FCF might be the better way to look at it... Link to comment Share on other sites More sharing options...
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