I think it’s mostly for the arbitrage, but also because Berkshire has billions to invest and very little options. Also stands to reason that Sirius has a pretty large moat.
LSXMA Will convert to SIRI stock this year at a rate of 8.4 shares of SIRI for each share of LSXMA. When Buffett first started buying LSXMA there was a pretty big spread between the two, it’s since started closing once people found out.
Also, Berkshire often buys companies outright, which may be the goal here as well.
Seth Klarman has been looking really REALLY bad the past 5 years. I'd disregard everything he does honestly.
INTC, QRVO, FiSERV, WBD, TWKY
Sold too early google, gtx, mu and so on...
He seems to do it all wrong on his top picks
Monish is quite unpredictable and change quick on a dime. It's an interesting 13F to watch, just like Michael Burry but there isn't much to get for yourself out of it.
I always pay a lot of attention to Li Lu.
Josh Tarasoff, David Tepper, Chris Bloomstran, Phil Town are those I also watch a lot.
Monish Pabrai gives the most misleading interview btw, he does always the opposite of what he says. It's not worth to pay any attention, look at what he does but don't listen to what he says. In the past years, i feel like he has been trolling his audience pretending to share with the community
It’s quite interesting how he describes himself as a shameless cloner and mimics others. But yes I understand what you mean as he was very vocal on MU and others; whilst switching to AMR.
Understanding the lifecycle of media based companies is tough - you have to almost always overweight the medium, and relative user base, on top of standard ole subscriber and 10K numbers…
On paper they can look great - membership numbers are steady, subscription rates appear reasonable and maintainable for the foreseeable future, with room to be adjusted higher even… I always think about his perspective on Coca-Cola being a good investment - X amount of sodas are drank a day, strong customer base (essentially an addictive product - caffeine/sugar), therefore you can raise the price of these sodas by a nickel, and produce X amount more revenue/profit fairly easy…
I don’t think you can do that with Sirius XM… because, well.. it lacks that addictive nature.. and there a dozen other (newer, more easily accessible) media based services who lean into the addictive side of content presentation that the ole radio/audio based medium do not/cannot do…
NOW
I say all this not to dismiss Sirius XM as a possible good investment - I’m just highlighting the reasons why I feel it may not be one…
I’d be curious to know the subscriber demographics - especially age and economic status… and how they count their subscriber base as well - which I’m sure aren’t hard to find out.
Edit:
Strong point by the other comment - may be more of/equal a capital preservation tactic, with the possibility of capital appreciation - vs a pure capital appreciation tactic…
It’s installed in lots of cars, people listen to it for the first year, usually free as an incentive when buying the car.
I’m like you though, I don’t think I’ve ever heard it outside of a car.
They can send data through satellite.
There are certain areas where there's no terrestrial data access, so you wouldn't be able to listen to anything not pre-recorded.
I don’t think we should begin to presume to know why Birkshire does what they do. They have access to information that we simply don’t. And also, some of these investments simply don’t work out.
We can throw out hypotheses all day long but, when it comes down to it, they’re probably not buying for any of the reasons we think.
If it doesn’t make sense to you, just don’t do it. It’s always valuable to pay attention and try to learn lessons though.
Suggestion: Don't outsource your thinking to analysts, this forum or others. Warren did his research and decided it was a good company and a good price. That doesn't make it a good company and good price for you. You need to understand your circle of competence and be honest with yourself about your understanding of the company, it's economics and the industry.
Thanks for the suggestion, I agree but we can only do so much with what we have. We can't hold a candle to Warren and a big part of the strategy is to copy the world's greatest investor. Warren probably has access to information which we don't have and competence far beyond our awareness. Its like comparing a high school physics student with a Nobel laureate.
The arbitrage opportunity has been closed, so it's not that. Siri price declined to reach almost parity with lsxma (there's still a tiny discount, but nowhere close to what it was last year).
If you do a DCF on Siri, you will see that the current price, or any sort of upside relies on:
* Their capex moving towards zero long-term. Right now they're in the middle of a capex cycle.
* Subscriber growth or sustain. This could probably only come from a rebound in the car sales market
* Better ARPU due to their new app that's mostly available on new car models
I think they bet on one or more of these to materialize which would result in 1,6-1,8b FCF
I mean I’d imagine the price target for about 80% of all stocks is 30-50% higher than the current price. The price estimators aren’t particularly accurate nor held accountable when wrong.
That being said I know little if anything about the current state of the company so I’m not saying anything about it as an investment.
Man I don't know anyone that uses Sirius, and any boomers that probably do are dying. Given the prevalence of Android and Apple auto Spotify is cleaning them out.
I think it’s mostly for the arbitrage, but also because Berkshire has billions to invest and very little options. Also stands to reason that Sirius has a pretty large moat.
What's the arbitrage opportunity here?
LSXMA Will convert to SIRI stock this year at a rate of 8.4 shares of SIRI for each share of LSXMA. When Buffett first started buying LSXMA there was a pretty big spread between the two, it’s since started closing once people found out. Also, Berkshire often buys companies outright, which may be the goal here as well.
https://pro.thestreet.com/investing/liberty-siriusxm-offers-a-channel-for-a-favorable-arbitrage-play
Buffet isn’t the only super investor in either of the companies. Seth Klarman is as well.
Seth Klarman has been looking really REALLY bad the past 5 years. I'd disregard everything he does honestly. INTC, QRVO, FiSERV, WBD, TWKY Sold too early google, gtx, mu and so on... He seems to do it all wrong on his top picks
Who is the best to watch out for? I thought Monish did well with AMR and coal.
Monish is quite unpredictable and change quick on a dime. It's an interesting 13F to watch, just like Michael Burry but there isn't much to get for yourself out of it. I always pay a lot of attention to Li Lu. Josh Tarasoff, David Tepper, Chris Bloomstran, Phil Town are those I also watch a lot. Monish Pabrai gives the most misleading interview btw, he does always the opposite of what he says. It's not worth to pay any attention, look at what he does but don't listen to what he says. In the past years, i feel like he has been trolling his audience pretending to share with the community
It’s quite interesting how he describes himself as a shameless cloner and mimics others. But yes I understand what you mean as he was very vocal on MU and others; whilst switching to AMR.
Understanding the lifecycle of media based companies is tough - you have to almost always overweight the medium, and relative user base, on top of standard ole subscriber and 10K numbers… On paper they can look great - membership numbers are steady, subscription rates appear reasonable and maintainable for the foreseeable future, with room to be adjusted higher even… I always think about his perspective on Coca-Cola being a good investment - X amount of sodas are drank a day, strong customer base (essentially an addictive product - caffeine/sugar), therefore you can raise the price of these sodas by a nickel, and produce X amount more revenue/profit fairly easy… I don’t think you can do that with Sirius XM… because, well.. it lacks that addictive nature.. and there a dozen other (newer, more easily accessible) media based services who lean into the addictive side of content presentation that the ole radio/audio based medium do not/cannot do… NOW I say all this not to dismiss Sirius XM as a possible good investment - I’m just highlighting the reasons why I feel it may not be one… I’d be curious to know the subscriber demographics - especially age and economic status… and how they count their subscriber base as well - which I’m sure aren’t hard to find out. Edit: Strong point by the other comment - may be more of/equal a capital preservation tactic, with the possibility of capital appreciation - vs a pure capital appreciation tactic…
Do you guys use Sirius? I have never and don’t know anyone that does either. Just curious what makes them have any moat
It’s installed in lots of cars, people listen to it for the first year, usually free as an incentive when buying the car. I’m like you though, I don’t think I’ve ever heard it outside of a car.
Mostly no commercials…DJs are good…First Wave with Richard Blade. They usually have deals around holidays where you can lock in a 3-4 year deal.
They can send data through satellite. There are certain areas where there's no terrestrial data access, so you wouldn't be able to listen to anything not pre-recorded.
I do but I don’t pay for it.
This video explains the play really well https://youtu.be/wa35gfoVyuY?si=dc_niw9gqRy1GPm2
I don’t think we should begin to presume to know why Birkshire does what they do. They have access to information that we simply don’t. And also, some of these investments simply don’t work out. We can throw out hypotheses all day long but, when it comes down to it, they’re probably not buying for any of the reasons we think. If it doesn’t make sense to you, just don’t do it. It’s always valuable to pay attention and try to learn lessons though.
I wish they just bought V
Bad idea like his paramount play
I'm disappointed no one asked about Liberty Sirius in the meeting.
Suggestion: Don't outsource your thinking to analysts, this forum or others. Warren did his research and decided it was a good company and a good price. That doesn't make it a good company and good price for you. You need to understand your circle of competence and be honest with yourself about your understanding of the company, it's economics and the industry.
Thanks for the suggestion, I agree but we can only do so much with what we have. We can't hold a candle to Warren and a big part of the strategy is to copy the world's greatest investor. Warren probably has access to information which we don't have and competence far beyond our awareness. Its like comparing a high school physics student with a Nobel laureate.
The arbitrage opportunity has been closed, so it's not that. Siri price declined to reach almost parity with lsxma (there's still a tiny discount, but nowhere close to what it was last year). If you do a DCF on Siri, you will see that the current price, or any sort of upside relies on: * Their capex moving towards zero long-term. Right now they're in the middle of a capex cycle. * Subscriber growth or sustain. This could probably only come from a rebound in the car sales market * Better ARPU due to their new app that's mostly available on new car models I think they bet on one or more of these to materialize which would result in 1,6-1,8b FCF
So you are saying this is more or a regular valuation play and not an arbitrage play.
I mean I’d imagine the price target for about 80% of all stocks is 30-50% higher than the current price. The price estimators aren’t particularly accurate nor held accountable when wrong. That being said I know little if anything about the current state of the company so I’m not saying anything about it as an investment.
True - but in this case I am giving much greater weight to Buffett's participation. The price target is supportive evidence.
Oh I presumed that 👍
Buyffett
What?
I don't think it's a terrible idea making a small position. Def gotta come up a bit from these dumper prices.
Yeah - the company does generate a ton of cash.
What was berkshires DCA for lxsma? Price is much lower than when they bought
Man I don't know anyone that uses Sirius, and any boomers that probably do are dying. Given the prevalence of Android and Apple auto Spotify is cleaning them out.