I came across some pretty good/entertaining videos on Youtube about John Malone, of Liberty Global, etc…you know, The Cable Cowboy. I thought I would share with you and assemble them here for my future reference.
This first one is from 2012 (I think). It is pretty interesting and contains his educational and early business background. The guy is obviously smart and also has what we call da’ social skills.
I found it interesting that his dad was a GE guy and that he also worked for a project for GE while he was at McKinsey & Co. as a management consultant (in his first job after leaving Bell Labs/Lucent). I wonder what he would say about Jack Welch and the GE managers of that era now. I’m sure he wouldn’t want to be too critical, but I wonder if he has an opinion about where things went wrong.
Most notable to me was his emphasis on decentralized responsibility AND authority as a the best way to organize a conglomerate. If you are wondering why that is noteworthy, read this.
I have never invested in any of Malone’s entities (to my financial detriment), but I was never comfortable with the leverage, use of alternative accounting metrics (almost exclusively), what I perceived to be aggressive tax structures, and the use of what I consider capital markets gimmicks (like “tracking stocks”). He openly talks about almost blowing up (early in the TCI days) and the use of off balance sheet financing structures.
I have always felt like yeah, maybe I missed investing with him, but I mean if you have a really levered up company there is going to be a wide dispersion of outcomes and some are going to be huge winners just as a matter of pure probability/luck (just look at Paul Allen going to zero/bankruptcy with Charter).
He’s only like 77 though, so if he’s got a much longevity as Munger or Buffett, we might have a few decades yet, and he was pretty impressive in that 2012 video.
Here’s one with David Faber from 2016:
This one is more about Trump and trade and AT&T + Time Warner. There’s a bunch of current events/policy type questions which are moot now, but he does talk about the industry and unbundling and where he sees it all going. Basically, he primarily talks about why distributors want to own content (a hedge).
He also talks about the fact that he sees big synergies and future consolidation between wireless and wired “connectivity providers.” He also says 5g deployment by wireless providers will require a dense fiber network to support (essentially) the “backbone” of the network. He says he has personally seen the synergies based on Liberty Global’s work with Vodafone in the Netherlands. Hmm, VOD keeps popping up as screening pretty cheap…maybe worth a tire-kick. Anyway this one is pretty good, but you might want to play on 2x speed for a first few minutes unless you care about his views on Trump or tax cuts.
Discovery
Here is another interview with Faber. It is from late 2017 and Malone talks about his investment/views about Discovery, Inc. (as it is now known). He talks about the merger with Scripps Networks (HGTV, et. al.). I think his logic for this company/the merger is pretty compelling.
Discovery has been on my watch list for a while for a new strategy I’m thinking about trying out. It’s a “quant-a-mental” strategy that basically combines quantitative analysis/screens with some light fundamental analysis (that’s basically what I do in general, but this would be more formulaic). It will be like the Magic Formula, but with sustained buybacks and/or dividend growth as the quality prong (versus ROIC). I’m going to post about it, if I ever make it “live.”
They talk about some other interesting stuff too. Here’s the video:
Here’s another Discovery related video with Malone and Zaslav (the Discovery CEO):
It is pretty interesting to hear more about the Discovery pitch from Zaslav. Every time I look at Discovery I end up concluding, if I keep an eye out, I may get Disney for not much more.
Ok, future self, if I missed out on another 6 bagger with Malone…I grant you permission to come for me, terminator style. hah!
Thanks for reading!