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voyager

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  1. I think this is a super fascinating read. I didn't learn a ton, however I loved the storytelling and found it to be very enjoyable.
  2. Spectrum is kind of a catch 22. For broadcasters, you really need that spectrum to have good quality on your channels, so is more of a terminal value item rather than additional value. If you want to do the math, you look up each broadcaster's license and then apply the going rate of gigahertz per thousand people from the most recent auction. I used to work in the industry, so I have a decent understanding of it. The more important thing is OTT subscriber growth and OTT subscriber rates (currently less than half of what cable companies pay). If that continues to grow, broadcasters will be in fine shape even with cord cutting.
  3. If you could no longer invest and you had to pick 3 fund managers to invest all of your money with for the rest of your life, who would you pick?
  4. Thanks I repeatedly hear that OEMs will be beneficiary of EVs as servicing can be done directly with them via software updates. I wonder how the average gross profit per vehicle breaks down into a) front margin, b) warranty, c) OEM incentives etc on an absolute dollar basis - do you know more? Also, I see that some dealers open independent used dealerships with low avg prices offset by F&I, warranty etc. - What is your view on a) the sustainable economics of that model and b) the potential to scale as to me it seems any dealer could follow the same strategy? Look up the NADA report for specifics.... here's the high level. Selling new cars is ~50% of total gross profit. For new non-luxury, the average selling price is $30k with ~2% gross margins. F&I ~$1k. Incentives/fees are ~$1k. For new luxury, the average selling price is $45k with ~8% gross margins. F&I ~$1k. Incentives/fees are ~$1k. In total, each portion makes up around ~15% of total profits and 1/3rd of gross margin off of new vehicles. On the latter, I don't know the used market as well as the new market.
  5. Where was this said? Thanks! I don't think any research firms have done the math actually. For current info, use Cox Automotive data. I'll do the illustrative math here though: current franchised dealer service share is 30% of ~$500B. EVs cost ~2/3rds what combustion costs to service.... 100% EV market share would lead to ~$350B market size. Dealers will get, IMO, ~50% share of that because 1) more OEM parts will be required 2) less independent repair shops b/c of increasing software needs, skills, and fixed costs 3) customers will prefer dealers more b/c of technology component 4) auto repair market consolidation and scale requirements. Happy to go into detail on each.
  6. In the franchised car dealership business, so I can answer most specific questions. Here are the popular ones: 1) Is the business model at risk? No - it's not at risk. Just changing. Dealers used to make $ off of selling cars, now they make it from servicing. Selling direct won't scale because of 1) capital outlays for service facilities 2) laws that are ingrained 3) relationships in rural markets. Industry headwinds are overblow. EVs are good for dealers, because they'll get higher servicing market share. Level 5 autonomous driving is still very far off (20+ years) - Waymo's CEO said it not me. 2) How to analyze? What's unique about dealers is that every single store is the same. A big part of performance is running a store better than someone else. Look at the unit economics for new, used, f&i, and service. Look at costs as a % of revenue. Other key things are fixed absorption and real estate ownership. Being in good, growing, local markets is also very important. From a valuation perspective, I like to think about it from a private market value standpoint. 3) Advantages of scale? There's definitely an advantage to a point - probably 5 stores is enough scale for overhead, brand, and interest rates to be attractive. The industry will consolidate slowly. Because of franchise rules, acquisitions are slower to occur then other industries and more restrictive. It's hard to buy more than a few rooftops in a local geography, so not a lot of big m&a deals. 4) Pricing and gross margins on new cars. Consumers have benefited. The internet has brought prices down. Gross margins are close to the bottom. 5) Which public dealers are well run? None - most are average, with Asbury leading the pack. Berkshire owns the best dealer of scale.
  7. The AGM was very focused on the down year in the insurance business. There's really not a whole lot else to add in there. OG - anything else to add?
  8. If you're a retail investor, Morningstar does a nice daily updated. If you're professional, Capital IQ, FactSet, Bloomberg, all have daily alerts that you can create.
  9. I listened to these a while back.... The part of the Buffett interview where he talks about Moody's is fascinating.
  10. I'd be happy to meet - last time around didn't work with my schedule unfortunately.
  11. Ted probably knows the guy who runs it, given that its not far from where he lives.
  12. I have a couple of pets, one of which recently joined the family. Looking at this from a bottom up point of view, I suspect that a lot of smart people are going to wrong about the industry. It's just going to be a lot smaller than people think because the TAM isn't the entire pet market - it's only really the people who are concerned about managing expenses, since pet insurance isn't required by law. Predictability is important for that segment. For the rest of us, the economics of pet insurance are pretty terrible.
  13. I suggest that you get your hands on an investment banking confidential information memorandum. There's a pretty standard way of presenting an investment case that your friend could use as a framework.
  14. DE Shaw has fundamental and so does Citadel.... https://www.deshaw.com/careers/3647
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