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Investment Ideas / Re: CHTR - Charter Communications
« Last post by Shooter MacGavin on Today at 10:55:03 AM »
Hey here's a dumb question...

I hear this line a lot from Malone and MIke Fries...combining a wireline network and a wireless network has huge synergies.  Why does it have huge synergies? I get the churn reduction argument.  But from a pure cost synergy perspective?

As you mentioned, reducing churn has big benefits, but there are also synergies when it comes to the backhaul capacity, the billing and customer service systems, etc.

Imagine a cable network and a wireless company side by side, operating independently. If you made a venn diagram of everything they need to operate, there'd be a fair bit over overlap. That's where the synergies would come from.

But cable is a better business than wireless, so it all depends at what cost you can make it happen. So far CHTR seems to be going the MVNO route, which reduces risk.

Yup.

 I get the billing and customer service, but you could then make the argument that you should merge netflix with a cable company or anything with a billing department and charter. In other words, merging SG&A costs isn't unique to wireless and cable.  But definitely the backhaul piece is.  I guess maybe the telcos stops leasing cell towers in  some instances because the footprint overlaps with a cable operator and they can simply plug cells to the cable backhaul.  I'm not an engineer but in my simple mind, this is maybe how it makes sense?  Not sure, which is why i asked the question.
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Investment Ideas / Re: CHTR - Charter Communications
« Last post by Shooter MacGavin on Today at 10:49:02 AM »
Yes Liberty Global commentary on VOD/Ziggo JV was that the two biggest benefits were higher NPS and lower churn. The cost synergies were 1/4 IT savings, 1/4 redundancies and 1/2 included marketing + sales and termination of rented fibre. I think they discussed this on the Liberty Global Q3 2017 call.

ok thanks. I listened to the call, but didn't quite catch that part.  Thanks.  the one I didn't think of is the termination of rented fibre. 
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Investment Ideas / Re: USB - US Bancorp
« Last post by walkie518 on Today at 10:48:29 AM »
Bringing this topic back!

I bought shares of USB this morning.

The thesis is simply that ROA is 50% higher than what one expects from a bank and it's not just from its merchant processing, investment management, and credit/debit card businesses.  Sure, those businesses help, but USB seems to be earning $10.8B of interest income on $277B of loans...nearly a 4% net interest margin.  The trickle down after expenses reflects in the ROA.

That said, half bank half custodian/trust with $20B of cash and returning most income to shareholders via dividends and buybacks.
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General Discussion / Re: What are you buying today?
« Last post by CorpRaider on Today at 10:44:11 AM »
Pretty sure the behavioral and finance research indicates that is likely to be the superior approach, but I don't feel like spending the time to look up cites.   ;D
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General Discussion / Re: What are you buying today?
« Last post by writser on Today at 10:40:56 AM »
Personally I doubt that after 50 hours of research you encounter a footnote in the 1983 annual report that will radically change your mind. At that point you probably made up your mind anyway, consciously or not. The extra work might cause you to feel an (unwarranted?) confidence in your holdings and the risk of the excessive research is that you start feeling emotionally attached to your positions and/or lose yourself in details - i.e. you'll turn into the guy defending Valeant by referencing to the moisture content of their foot creme as demonstrated by an article in Housewives Illustrated while the whole company is burning down. Or the guy immediately saying 'why don't you short it?' and 'maybe you should do 70 hours of research first' when somebody asks a question.

For me the ideal investment is something where the thesis can be explained in like 30 seconds and then I'd need like 5-10 hours doing some research to confirm the thesis is correct. If I can't figure out in 10 hours if something is cheap I'd rather move on. Difference in style I guess. Also I'm lazy.
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Investment Ideas / Re: CHTR - Charter Communications
« Last post by Liberty on Today at 10:12:31 AM »
Perhaps another dumb question, but why would someone like VZ willing to play game with the cable guys by letting them run a MVNO on its network?  Is it due to regulatory requirement that they need to open up their network?  Otherwise, I don't see it beneficial to cultivate a potential competitor for a little incremental revenue.

I don't remember how that deal came to exist, but TWC came with a perpetual MVNO deal with Verizon that they're now activating.

Fromt he point of view of the wireless company, MVNO deals can make sense because it just increases utilization on their mostly fixed cost assets, so it's probably at very high incremental margins.
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Investment Ideas / Re: INLOT.AT - Intralot
« Last post by redhots on Today at 10:04:10 AM »
They are buying back stock again with prices up to 1.20 Euro/share.   222,000 shares in the last week.
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Investment Ideas / Re: CHTR - Charter Communications
« Last post by Munger_Disciple on Today at 10:00:14 AM »
Quote
Perhaps another dumb question, but why would someone like VZ willing to play game with the cable guys by letting them run a MVNO on its network?  Is it due to regulatory requirement that they need to open up their network?  Otherwise, I don't see it beneficial to cultivate a potential competitor for a little incremental revenue.

Comcast & Time Warner Cable owned cellular spectrum in the past and they subsequently sold it to VZ. As a part of the deal, they also received the ability to offer MVNO using VZ network. So VZ is legally required to support Charter's (since Time Warner Cable is now part of Charter) and Comcast's MVNO plans.
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This book came out today.

It was an honor to have my book (University of Berkshire Hathaway) included as an excerpt in this collection.
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