You didnt ask this particular random, but I found Ben's comments on Viasat useful on understanding the company and remain appreciative of his generosity in sharing Cove's collective thinking on the company. At the same time, I also found myself noting a continual series of what felt like Buffett and Munger red flags - I kept picturing them shaking their heads in disbelief at the idea of investing in the company.
For example, Buffett and Munger once described retreating from an oil investment in Russia, and their realization that they would never see so much as a thimble of oil and that any attempt to somehow repossess their assets would be rebuffed (possibly violently). If an investor has no recourse for an asset stranded in terrestrial Russia, what recourse is there to recover or repair an asset stranded in geostationary orbit? Siberia is a pretty harsh environment, but GEO makes Siberia look like a pleasant beach in Antigua populated only by attractive people from your "field of eligibles" who are somehow deeply fascinated by everything you have to say...
To Ben's point about stepping away from investments with a range of 0x to 5x, pretty massive ocean of 0 out there in GEO. And you can add Munger's invective that "Whenever you hear the word EBITDA, substitute the word 'bullshit'!" The company produced nary a trickle of owner's earnings for decades while calling in more and more capital via both debt and equity - breaking neatly into the lower tier of Buffett's description of the three types of businesses.
i was curious how this got by the bear analyst used in the cove vetting process.
cove uses graham/munger categorizations, and should have noted all your points. my guess is that the owner's earnings would be taken less critically as vsat was in the GARP group, not a cigar butt.
the latest from others at cove just makes a nod to 'bad luck' and tax losses. not very satisfying.
It's what it is. Personally, I had the exact same takeaway from Viasat as Ben seems to have had from Lumen - to strive to emulate Munger rather than Graham - so I did find this post quite satisfying, for what it's worth.
well constructed thought piece.
lets see the vsat post-mortem list ! how do these fail beyond multi-person oversight?
You didnt ask this particular random, but I found Ben's comments on Viasat useful on understanding the company and remain appreciative of his generosity in sharing Cove's collective thinking on the company. At the same time, I also found myself noting a continual series of what felt like Buffett and Munger red flags - I kept picturing them shaking their heads in disbelief at the idea of investing in the company.
For example, Buffett and Munger once described retreating from an oil investment in Russia, and their realization that they would never see so much as a thimble of oil and that any attempt to somehow repossess their assets would be rebuffed (possibly violently). If an investor has no recourse for an asset stranded in terrestrial Russia, what recourse is there to recover or repair an asset stranded in geostationary orbit? Siberia is a pretty harsh environment, but GEO makes Siberia look like a pleasant beach in Antigua populated only by attractive people from your "field of eligibles" who are somehow deeply fascinated by everything you have to say...
To Ben's point about stepping away from investments with a range of 0x to 5x, pretty massive ocean of 0 out there in GEO. And you can add Munger's invective that "Whenever you hear the word EBITDA, substitute the word 'bullshit'!" The company produced nary a trickle of owner's earnings for decades while calling in more and more capital via both debt and equity - breaking neatly into the lower tier of Buffett's description of the three types of businesses.
i was curious how this got by the bear analyst used in the cove vetting process.
cove uses graham/munger categorizations, and should have noted all your points. my guess is that the owner's earnings would be taken less critically as vsat was in the GARP group, not a cigar butt.
the latest from others at cove just makes a nod to 'bad luck' and tax losses. not very satisfying.
It's what it is. Personally, I had the exact same takeaway from Viasat as Ben seems to have had from Lumen - to strive to emulate Munger rather than Graham - so I did find this post quite satisfying, for what it's worth.
Really enjoyed your article, Ben - multiplicative probability is an essential mental model