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All right, hope you enjoy the episode.

Ladies and gentlemen, welcome to the Business Brew.

You're here for a solo episode with Bill Brewster.

Anyway, going to be me today.

I thought about starting it out.

Back in the day, I was listening to Miami radio and a guy used to start things and I was like, what's up, y'all?

What's it going to be?

Yeah, you on the mic?

What's your homie Billy Bee?

Anyway, he didn't go that way.

That's how I'm going.

But anyway, you're welcome for that.

I just want to check in with you all and say that I am a little bit.

I'm not going to say I'm sorry because I'm not sorry.

That would be fake news.

But I apologize for not having a more regular cadence.

The reason has been positive things going on.

I was fortunate to go to Richmond to see the one and only Saurabh Madan and his group of investors that get together.

That was a very fun time.

Shout out to him for organizing meetings with Markell and Kinsale.

It was interesting to finally meet the Kinsale people.

I somewhat embarrassed to not know more about the company earlier and going back to the Fairfax episode that I did with a Sheaf and Charlie, I didn't know really anything that I should have known going into that.

And and it's especially embarrassing having owned Berkshire for so long.

But anyway, sometimes, you know, the benefit of having a podcast is I get to listen back to myself and I'm like, man, you sound dumb here.

You should really brush up on that.

So anyway, I've been brushing up and my impression from the Kinsale guys is that is a heck of an organization.

The stock multiple may or may not reflect that.

I will tell you that I listened to a short pitch on it and after the short pitch I said self.

This is something I think I want to own because everything that the short pitch addressed I kind of got excited about would say the Georgia case I think has been dismissed.

If you know what I'm talking about.

You know, if you don't, you don't.

But anyway, that was dismissed and I can kind of get behind the valuation being stretched and I can kind of get behind it on a cyclical short basis.

But I would not bet against that management team in the long term if I were laying bets.

So for those that can time things, you're smarter than me.

I own a small amount so that I continue to follow the company.

I am inclined to make it bigger over time, but you should definitely not listen to me for your financial advice.

You should do your own work.

I will say that yesterday I'm address some things on this episode.

Yesterday I was listening to the one and only the big homie John Malone.

I if you've listened to this long enough or followed me from Value After hours, I know enough about cable to have lost a decent amount of money in it and should have listened to smarter people.

Well, people that were more right on the interwebs.

One of which, which really it dismays me to say out loud, but is Masa Son Capital on the Twitter machine.

It's talk about talk about being sad about being on the wrong end of a trade with somebody else.

But anyway, that's neither here nor there.

Mr.

Malone, I would say, was talking his own book, but also said some things that I just kind of couldn't get down with.

I'm going to share my screen here for a hot moment.

Let's see, we're going to go to charter on the fiscal AI, which if you don't use the product, you should.

Anyway, Mr.

Malone started lying with numbers a little bit yesterday and let's talk about the CapEx intensity of cable and he said, you know when our CapEx went down, we had a run up in the stock to 800 and then once the CapEx started here we're here we go.

These are repurchases.

You'll see a ton of repurchases in December of 2021.

Then he says when CapEx goes up again, right, not, not an untrue statement.

CapEx did ramp since 2021 as you can see.

If you can't see, hang on, I'm going to give a plug for fiscal AI.

Here we go.

We click that bang.

Now you can see, oh, it's a, it's an inverse chart because we got CapEx.

But anyway you can see that the bar is going down.

He said.

Then our stock went down.

This is somewhat true.

I will tell you as somebody who has followed this for a long time, other things coincided with the stock price going down.

One, if you look at a chart of stocks that go that do well, stocks that go from earning decent returns on capital to not great returns on capital generally do not work out very well.

And if you look at the residential customer relationships on the KPI section of physical dot AI, you will see that it started to turn over and it turned over at a time when Charter disparagingly referred to the competition of fixed wireless as cell phone Internet.

And there were interesting signs of which I actually followed some.

I will give myself some credit.

I've been out of Charter for a while, but one of the little math projects that I was doing Once Upon a time was when the rural development started.

I, I was doing the math on the connections of the rural development.

And then I said to myself, I said self, the core plant is starting to lose customers and no one was really talking about it.

And I started thinking to myself, is it good for returns on equity and assets to be laying more passings and having fewer customers?

Turns out it's not so good for those metrics and those aren't so good for the stocks.

So along the time that Charter is investing in the Cap X, they're bleeding customers.

This is an issue and that's the issue.

The issue is that they are getting attacked from both fiber and fixed wireless, which I think they may still call cell phone Internet.

And you know, it's just kind of tough to listen to a company and a management team say this is a parking lot for customers that we will reacquire and then see their customer relationships decline while their passings increase and continue to take them seriously.

Another thing that happened that was kind of interesting, I'm pretty sure it's new Street research.

I clearly don't have access, but I did get a report and new Street back in the day like 2 years ago said the and I may be misquoting, but this is off memory.

They said the NPS from fixed wireless is super high and we think that NPS is a leading indicator of where customers go and therefore we think that customers are going to go there.

And I read that and still we still weren't having conversations about is cable to sell.

So occasionally if you follow things close enough, I guess you can make quasi correct decisions.

Probably never should have been there in the 1st place.

I was talking to my man Francisco today.

We both should have just that Sprint merger is the one that haunts us because then we could have, could have own T-Mobile.

And I remember I was standing outside on my patio Once Upon a time when I had one and we were talking about that deal and I was pretty sure the merger would get through in.

Alas, I did not buy 1.

So a mistake or did not buy that so a mistake.

I'll rub my face in.

But I just think, you know, the narrative of capital intensity has gone up and therefore that's why the stock has gone down.

Or, or then then, and I do not mean this to disparage John Malone.

He is the man.

I am just me, but the, the suggestion of a dividend to support the stock price almost offended me as a, as a, you know, somebody who's followed him.

I get that they want to signal to the market that there's sustainable cash flow.

The issue is when you have operating leverage, financial leverage and customers that don't like you and your metrics roll over and your gross profit starting to decline for the first time and you got fewer connections and you got pricing power issues questions.

I live in a Comcast neighborhood.

I just signed a deal with them to lock in my price, up my Internet, lock in my price for five years at a lower cost than I was paying, right.

So you got some some questions about pricing power stocks probably not going to go anywhere positive.

I don't think a dividend helps that.

That's just me.

I'm also going to, here's another thing that has been fun in my life.

I call Comcast.

I said, hey, I know that you got a new plan.

I'm on rack, right?

What do you have?

They say, oh, Mr.

Brewster, we got this and you can add a phone line.

I said I'd like to add the phone line to that because I don't really want to pay for two phone lines if I only have to pay for one.

Sorry for the nose issue.

Anyway, so I'm on the phone with a lovely man and I said to him, I said OK.

Now I just want to make sure that when I connect this phone line, this is my wife's phone line.

It's not my phone line.

So any mistakes are a bigger issue in my life when it's her stuff.

So plus she's had this number since she was like 16, right?

I go to the guy, I go just don't do anything to the number.

Whatever you do, I do not care.

This is a billing issue.

Just connect her phone to our plan and let's keep it moving.

OK, Mr.

Brewster, Nothing will happen to her number.

OK, great.

I get off the phone, I go to sleep.

I'm happy I've saved.

I think it was like 80 bucks a month.

So that's almost $1000 a year.

That's like money.

Real money can pay for maybe 16% of my healthcare insurance jump.

Anyway, dude goes, oh, I go to call my wife because I woke up in the morning.

I said I really hope her phone works.

I just had a premonition.

They cancelled the freaking number.

How is it that you have an offer and I want to take your offer and you end up cancelling a fucking number?

How does that happen?

So when you want to know why your EBITDA or your EV to EBITDA is like 5, it's because you suck.

Like you suck at business.

And the thing that is frustrating, and I guess that Mister Malone is a much more public figure than I am and he can't say it, but like fundamentally these companies need to seamlessly transition customers to their best offering.

Charters got a freaking slide in their earnings deck.

They show that they save customers.

I want to say it's like 1800 bucks a year.

Maybe I'm lying.

Do your own research, maybe it's only 1200.

Either way, their contention is that they save customers a whole lot of money if they take the bundled offering from Charter.

I think it's a plausible explanation.

I've actually always kind of thought that cable companies were good at bundling.

My biggest issue with Comcast is I thought they should have dropped the fees on the Xfinity video product because I still think to this day it's the best video product out there.

But you know, they're addicted to the rental fees, so they can't anyway.

They just need to put their best foot forward to customers.

And then maybe the loyalty will start and then maybe the pricing power will begin to manifest itself.

And then maybe the growth will continue and, and God forbid they start actually getting connections.

I mean, look, everything that I'm saying, these stocks are cheap now that's some value investor shit.

And that can really get you burned.

I don't, I don't know if it's smarter to wait for the turn and the inflection in the numbers or if you just kind of close your eyes and say there is a case to be made that Charter can probably retire 10% of their shares if they have the guts to keep their buyback on.

Because sometimes buybacks can be pro cyclical and you're getting like a mid teens free cash flow yield, which on a per share basis, which are famous last words, you got a mid, you got like a high teens, low 20s compounder there.

That said, a lot of operating leverage, a lot of financial leverage.

SO20 can become 12 real quick and you know, do your own models and what not.

But I don't know, it was crazy.

I usually, I, I mean, I still look forward to Malone talking.

And I thought, I thought what he said in in the investor day was quite a bit better than in the interview with Mr.

Faber, who is a GOAT interviewer.

But man, I stuff, I was here and I was like, this is some cope.

And I just don't, I feel like these wireless companies are are on on the attack.

The thing I never was able to reconcile with the cable bowl pitch is it was always, it was always sort of like wireless isn't economic.

So they won't keep doing what they're doing, but they've always done it in the past.

I bought into the fact that there wasn't enough capacity.

Turns out I'm not a wireless engineer and miss that pretty bigly, but I'd argue the entire industry missed it, which by the way, is why no one trusts you when you're buying in your shares and you always have like there's no signal here.

So we'll see.

B Rob from Comcast, he just put in his bid for Warner Brothers.

Hopefully he went ham on that because I actually do think that would be the not the best combination.

Probably Netflix is a better one just from a distribution standpoint, but it would be interesting to see what Comcast could do with the IP that that Warner Brothers has.

They probably don't have the financial backing to actually get it done.

But that was kind of an interesting little moment for me yesterday.

I can't I part of me wants to put my hand in the fire right now, though.

Man, these the stocks are cheap but is scary.

There's another stock that I can't really mention because it's small that like has inflected and the CE OS are buying.

Well, the CEO bought in May.

Some other people bought and that one's kind of got more of my attention because the numbers have turned.

It's a little bit scary to say, well, you know, the numbers are going in the wrong way, but it's cheap.

That is a great way to lose a whole lot of money.

Bed Bath and Beyond was the king of the buy back into continued decelerating financials and news flash, that didn't turn out so hot.

So, so there's that.

What else have I been doing?

I went to Houston.

Shout out to Chad Garcia and Scott Weber for hooking me up out there.

That was fun.

Got to see the people at NRP, which was kind of interesting.

I like how they think about things.

And then Chad took me over to Land Bridge, which is a very interesting organization and Chad has done podcasts on them and secure at I think Yabby, yet another value blog.

So I would I would recommend checking those out if you're kind of interested in something that you may not have thought about.

James Vallas.

The Eris pitch here was somewhat similar, though a little bit different.

Landbridge and Waterbridge are slightly different than those.

So I don't know.

Can't stop thinking about how cheap some stuff looks.

I mean Twitter, Twitter fave in a in a little sub cult AMN that feels ripe for 2026.

Not my idea.

People much smarter than me are are pitching that one Olin.

I mean Olin's one of those that like man, we talking about COVID lows.

I don't know.

I don't cover it.

People smarter than me say that Buffett transaction is a pretty good comp.

You got some smart investors that like it.

It's it's interesting.

I was talking to somebody who knows what the hell they're talking about.

And I said, you know, why do you think that your business is not bigger today than it then your returns might justify it or suggest it should be.

And he said that if he were willing to do a model that was market neutral, that he he thinks he could have a much bigger business.

But.

He runs a lot of friends and family money and it and his own capital.

And my sense is he cares a lot about compounding, you know, like for himself and for the the people that he's committed to compounding on behalf of.

And he was just talking about portable alpha where, you know, the institutions want the manager to to just deliver straight alpha and then they buy cheap beta.

And I said, do you think that the market structure has changed in any way lately?

And his commentary was that if you go to sell a position through the day, they're just like real pockets of illiquidity.

And, you know, he feels like the, some of his orders can almost be front run by the high frequency guys, which is not like a unique thought, I don't think.

But it, it's interesting to to talk to somebody who is definitively skilled, has has returns, has been around the industry for a very long time.

And just kind of talking to him about some of the issues that he's had raising capital.

And you know, just through this journey, I've, I've been fortunate to talk to some people.

And I remember, I mean, I think Tidewater was at like 40 or so.

And I called somebody and I said, you know, what do you think about?

I might have written them.

I don't want to lie here, but we were, we were communicating.

And I said, what do you think about Tidewater here?

And he said, you know, I like it, but I'm not Bob or body and I don't have the LP base that's going to let me take a draw down on that name, especially when the markets doing really well.

And it's just got me, you know, thinking about how what is going on in investment, how I should structure my life, what I really truly believe and going back to cable.

Tell me who the buyer is.

All the people that used to talk about cable done ping them, say what do you think about cable?

They didn't none of them want to go back in that water.

I mean, it's it's scary shit.

So you know, what does that say about the opportunity, the potential opportunity?

I don't know.

For the record, I don't own them so.

But if one were to say how do things get cheap, the fact pattern here might suggest this is how it happens.

It would be nice to see some management teams come out of their fat pockets and buy some stock.

You know, I'll tell you another one that's it's kind of interesting to me.

It's been interesting, been not interesting, been interesting.

Disney seems to be at the point where they got the assets and the timing is right.

Can't stand Eiger.

That's my issue.

I know some people like him.

I think you're all wrong.

I think you're enamored.

He's got a great smile, he's got beautiful skin.

He's got charisma.

I get it.

That's how he became the CEO of that organization.

I've seen that man hollow out the C-Suite and knife successors for like 8 years now.

I'm not convinced he's ever going away.

So I don't, that's the part that I don't like.

But at some point you're, you're on the other end of the, you know, the, the what do they say the snake has swallowed the pig?

Yeah.

The next logical step is that the snake poops.

You don't want to own the poop that I know you.

I think you want to own the snake.

I think the snake gets bigger.

I think we're buying the snake in this hypo.

I don't think we're buying the poop.

You were buying the poop.

But anyway, I have really derailed that conversation.

So.

Yeah.

So that's that.

I don't know if you're asking, you know, as a host, if you're, if you're curious how the host has been doing in the markets.

I will tell you that I barely even knew that there was a draw down going on because going into this, I was not exactly participating in the upside to those that were following clear point and cure.

I am sorry for what happened with Uni cure.

I am even more sorry for the patients.

I, you know, and clear point was a home run for me.

It was a small position.

It's an interesting thing for me to think about because I have these tensions between should you be very diversified or should you be concentrated?

And it's wild to see.

I mean, now between meta and clear .22% positions ended up well, meta was 3.

But anyway, have really like driven a lot of return and both of those are realized.

So the tax is kind of hurt, but that's that's a the rest of the portfolio needed it.

It's we're not we're not owning Palantir and Bitcoin out here.

So well, I understand that that the past week might not have been fun or month for those people that own that stuff like, you know, zoom out.

Are you doing OK?

So I don't know, it's an interesting time and I just like, I really feel like a basket of beating up shit would do really well coming out of here.

I, I don't know, pick, pick your own beating up stuff.

But it's it's interesting and like there's some real, real businesses trading at what appear to be some pretty decent valuations.

I I sometimes I like to check Morningstar.

I just see like, Hey, how many four and five star stocks are there just as like a a gauge and the list is starting to get populated.

You know, I don't know how many wide Moat compounder E type you can find, but I I think you can do pretty well out there if you keep your head about you.

But the buying isn't as hard as the owning in my experience.

So man, GE, that's why that's one.

I never would have been able to hold it through COVID probably, but man, that hurts to see that.

But anyway, Long story short, I think there will never be a shortage of opportunities for the enterprising investor.

I still think the S&P is 1 hell of a beast to try to beat on a on a tax adjusted basis.

And it's just hard to look at the studies of how many companies fail, how much of return is driven by so few, and not think that a tax advantage rapper that that is guaranteed to capture the right tail is a great investment vehicle.

It's also really hard for me to look at how highly valued the right tail is relative to everything else and think that's where you want to be right now.

Equal weight makes some sense.

I do like that open AI is finally saying that there's some bad vibes.

That dude gives me bad vibes.

Sam Altman.

I mean shout out to you for having people that follow you and will you can issue equity at apparently a bajillion dollars and no one gives a shit.

But like, you creep me out bro.

I don't.

I don't know that I like that guy dictating where the world is going, but it's a train that I can't stop so might as well learn how to use the tools.

Was using Gemini yesterday.

Shout out to the Google.

Everybody likes Google stocks high.

I got, I got people sending me.

Somebody had the gall, the audacity to send me a picture of Satya standing there watching Sundar dance.

I mean, if that's not a top signal, tell me what is.

Satya's just sitting there in a dance floor, disco ball everywhere.

He's got to sit here and watch while Sundar has all the fun.

It's not right.

It's not right.

Meanwhile, Zuck says I'm a spend a bajillion dollars again.

I guess the good news is he's got no history of spending a bajillion dollars with no returns.

I realize there's returns and family of apps.

The revenues have been crazy.

I get it, I get it.

I'm just saying it's a whole lot.

I promise CapEx.

But Andrew Friedman thinks it's a double or at least tweeted it.

I don't know if he actually thinks that You should sub to his service to see.

You should also sub to fiscal dot AI.

And I probably won't, probably won't be doing another one of these by Thanksgiving.

So you should have yourself a hell of a Thanksgiving.

And thank you for listening to my little rant.

I was I've I've been told by a couple of people that they want to hear a little bit more of me.

I don't know that that's actually a good thing.

But here it is today.

Shout out to you all.

Shout out to the 10 man, the people that have been down to ride since day one.

And I hope you all have just a really family focused week next week and I hope it is fantastic.

All right, that's all I got.

Goodbye.

None.

The.