@AyyouEm Leverage up, grow EBITDA slightly better than inflation, pay out dividends, get 2/20.
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Steam Pipe Trunk Distribution Venue
827 posts
Steam Pipe Trunk Distribution Venue
@SteamPipeTrunk
Stuff, mostly. And some other things.
Katılım Nisan 2022
365 Takip Edilen70 Takipçiler
“PE only makes money when they make a company more valuable”
‘Debt paydown is a tiny part of return attribution’
…shifting value from debt to equity is the core premise of an LBO.
As a lender on 00s of div recaps carveouts and boltons, this entire post is hilarious.
John Caple@BigJohn043
This is non-sense. PE only makes money when they make a company more valuable. Debt paydown is almost always a small portion of the return. While sometimes cost reductions make a company more valuable, generally business buyers are pretty smart. They aren't going to pay up for a business that has been stripped. They will pay up for business that show top line growth, shifts to segments with more recurring revenue, etc. Most PE investments focus on growth. The idea that PE isn't focused enough on the long term is truly wrong. Talk to anyone that has worked in a public company and there is intense focus on simply the next quarter. When they get to PE they are amazed at the focus on 3-5 years out. And BTW, even if we are going to sell in 3-5 years we also have to make investments so the next buyer has a good return in their 3-5 year hold after that. Way less short term focused. Should we focus on 10-20 years out? While this sounds good, many investments focused on those types of time horizons are just a waste of money. Who knows what the world will look like in 20 years. If an investment can't be justified over the next 5 years then most times it is just a bad investment. I am sure there are limited exceptions but I am very skeptical. The bottom line is PE only makes money if they build better businesses. Not every PE firm is successful and even the successful ones have deals that don't work. But there are also public companies and founder owned businesses that fail. The success and returns of PE suggest that overall they are building better businesses and that is good for society as a whole.
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@patrick_oshag @GavinSBaker What up with his hair?
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This is my sixth conversation with @GavinSBaker.
As always with Gavin, the conversation covers a lot of ground, but we spend the most time on watts and wafers.
We discuss:
- Why the wafer shortage may prevent an AI bubble
- Data centers in space (reframed)
- Elon's Terafab and the new chip companies challenging Nvidia
- Usage-based pricing
- The disaggregation of GPUs
- DRAM, frontier tokens, and open source
Enjoy!
Timestamps:
0:00 Intro
7:55 Anthropic and OpenAI Valuations
12:58 Watts, Wafers, and Infrastructure
14:39 Orbital Compute and Data Centers in Space
22:49 Avoiding the AI Bubble
28:26 Terafab and the Future of US Manufacturing
32:16 Returns to the Frontier
37:23 Continual Learning
42:03 New Chip Companies
48:52 Extending GPU Lifespans and Private Credit
51:22 The Application Layer
57:32 The Token Path and Open-Source Dynamics
1:01:37 Cybersecurity
1:05:46 Diversity Breakdown
1:11:59 Assessing the Big Tech Players in AI
1:19:02 Geopolitics, Personal Safety, and the AI Horizon
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@partners_road As someone senior said recently, and it came across especially cynically, “all investing is momentum investing.”
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The few 13F’s I’ve seen so far are truly awful. The lack of creativity and herding across the ”widely followed” firms are an embarrassment.
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@modestproposal1 This cannot be good for GDP or property values.
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Derek Thompson@DKThomp
New pod: WHY THE WORLD REALLY STOPPED HAVING BABIES This is just a really amazing overview of a topic I thought I understood deeply. "Only two things are important right now in life: fertility and deep learning," the economist @JesusFerna7026 said. "Everything else is noise. Once you start thinking about these things, it's hard to start thinking about anything else." Some unbelievable, big-picture stats from the show: - 'Peak child' is world history is very likely in the rear-view mirror—likely around 2013 - 2023 was the first year in human history that global fertility rate likely fell below the replacement rate, and it's still going down - The world population is on pace to peak in the 2050s and then fall with accelerating speed every decade after - The compounding effects of sub-replacement level fertility are hard to fathom in the long run. If Thailand keeps its current fertility rate of 0.8 for the next 200 years without immigration, its population will decline from 63 million to 2 million. Yes, two million—the current population of Houston. Fertility's compounding effects over decades are like a tectonic plate—slow moving, but carrying the entire world. "Once you start thinking about it, it's hard to start thinking about anything else." youtube.com/watch?v=5F7_qa…
ZXX
This is a disaster:
"demographers believe that, after centuries of booming population growth, the world is on the brink of a natural population decline"
23 nations can expect their populations to halve by 2100
ft.com/content/a1389f…
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@ToddWenning Structure for Ted & Todd was 80% their picks beating index and 20% the other guy’s so as to encourage collaboration but it was individual performance and selection, not a team. And per Todd’s podcast appearances, a lot of chat time with WEB & Charlie.
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I understand this siloed structure was intentional, but I find it odd nonetheless. Presumably, each investment was discussed among Todd, Ted, Warren, and previously, Charlie, before and during the holding period. (If not, what are we doing here?)
During those discussions, the other investors should have built a level of comfort in the name that would imply that if the idea's originator exited the firm that they would know enough about the company to consider holding onto it.
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I see the sell-off of “Todd’s stocks” as strange investment team behavior. There should be team-level conviction in at least some of the names. So any investment stays only as long as the idea generator is still around?
Kevin Carpenter@kejca
Berkshire Hathaway Q1 2026 investment activity
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@TechFundies @andrewdfeldman Semis are still awful cyclical businesses. We’re simply in a good hardware market where companies are making significant technical progress and facing shortages / unprecedented demand. Aka play it where it lies.
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A little over 20 years ago, the VC firm at which I was an associate (or was it senior associate - I don't remember) was invested in @andrewdfeldman's prior hardware company. I wasn't on the deal team but remember his moonshot project was building some sort of super compute box.
He presented his business at our firm's annual boondoggle for our own investors, and later in the day was hanging out with us young folk at some cocktail reception.
Anyways, I think he must have been bored because we were only a couple drinks in before he started to tease us about our positions in life at the time.
I'll never forget him looking at us deadpan and asking, "So what are you guys hoping to get out of this?". To which I think I responded "What do you mean?".
With a twinkle in his eye, he clarified, "Like, what's your goal w/ your roles? ... To get a 3 Series?" [To young people, a BMW 3 series was considered a cool car for an aspiring profession in his / her 20s at the time].
I laughed - partly because I thought it was funny he was teasing us, partly because I definitely thought working at a VC was better than working at his cash-incinerating god-box hardware company that seemed like it would probably be a 0 in the not too distant future, and lastly because he had nailed it [I really enjoyed my job but would, in fact, enjoy a 3 Series].
[Sidenote: semis / hardware companies in the mid 2000s were considered to be awful, cyclical businesses that were definitely only a focal point for investors who liked losing money over time. You could almost say it was hated about a half as much as SaaS today.]
Anyways, I only thought of that interaction upon seeing the $CBRS IPO.
So congratulations to the man who spent >20 years only working on really hard things. Honestly glad it all paid off outcome-wise even though I know it was never about the money because otherwise there are way easier ways to do it than his journey.
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@HighyieldHarry Put the portfolio into a PT. Let the market clear!
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You’re telling me Apollo is trying to get out of a private credit fund that’s only 11% software?
Wall Street Rollup@WallStRollup
Apollo is in talks to sell its $3B publicly listed BDC, MidCap Financial Investment Corp for roughly $3 Billion
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I thought Malone might buy Puerto Rico from $lila via $gliba
Guess he’s just planning on cashing out of $lila entirely
What a shit deal for $gliba holders
Sterling Capital@jay_21_
@ClarkinM Yeah And they sold LILA as the next big cable consolidation play too and that has been terrible What is he going to do? Buy Puerto Rico from LILA? What else is out there that isn’t shit
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@jupiters_string Have not looked at this in over a decade. What will cause comps to stabilize? New/better product? Cleanliness? Pricing? Went to a newish unit last summer and the SKU proliferation was crazy and it felt greasy. Tell how the numbers stabilize other than “easy comps.”
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I’m With Wendy’s.
1/ I want to take a few moments to explain why Wendy’s ($WEN) at $7 is one of the most asymmetric opportunities I see in liquid public markets today.
The stock is priced as if this 97-year-old American institution is in terminal decline. It isn’t. A thread.
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This is the content I am here for. Anytime I am forced to watch the sharks, I cringe at him, his history, and his “I want a 25% perpetual revenue royalty for $3”schtick.
Marc Cohodes@AlderLaneEggs
It wasnt 4.2 Billion Learning Company was a Fraud and Kevin was at the helm.. I was short it and Mattel wrote off more than they paid for it:.
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@ZLiscow @florianederer @omzidar 0-50 the debt is to buy their primary residence. For the right tail it is borrowing against stock to buy a super yacht or Warner Brothers Discovery.
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@florianederer @omzidar You're right. In our data, borrowing is a low share of economic income for the super-rich.
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@conorsen What year is it in The Terminator plot line?
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@WhiteHouse No they don’t. Bring back the greatest generation, not the “me” generation. Tax the boomers. Means test SS. Lift the minimum age to 75, absent well documented disability. Make all income subject to SS tax. This is what fiscal responsibility looks like.
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They earned it. They deserve it.
NO TAX ON SOCIAL SECURITY! The golden age for seniors' golden years. 🇺🇸
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@_ram_ Enjoy your visit at The Broadmoor!
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@conorsen Removing 5 points of capacity is cartel-like behavior.
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I do wonder if this was a 4D chess play with the White House.
Kyle Potter@kpottermn
NEW: In a letter to employees, United CEO Scott Kirby says the airline is prepping for oil to hit $175/barrel & “doesn't get back down to $100/barrel until the end of 2027.” United is shaving 3% of off-peak flights - “think redeyes, Tues/Wed/Sat flying” - this spring & summer.
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@DadInvest It’s really gross. Will all the bankers engaged by all the sides get that much? AND he sold like $30 mil at the bottom to take the tax loss on it. Ridiculous
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I don’t think I saw Zas’ number before. $887MM? Jesus. Is that of the biggest single year comp lines ever? Bigger than Mike Milken at Drexel but maybe smaller than the peak Bill Gross PIMCO year.
DiscussingFilm@DiscussingFilm
David Zaslav will receive $887M as compensation for the Paramount/Warner Bros merger. Meanwhile, thousands of people are expected to lose their jobs in layoffs after the merger closes. (Source: Deadline)
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@jay_21_ The sailors say BRANDI, what a good wife you would be, but my life my love and my lady, is the sea!
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Can cd&r’s reputation survive?
Multi color, cornerstone etc
It’s getting pretty ugly
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@ABC That seems like a very long flight for a drone.
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BREAKING: The FBI has warned police departments in California that Iran wants to retaliate for American attacks by launching offensive drones against the West Coast, according to an alert reviewed by @ABC News. Aaron Katersky reports.
Read more: abcnews.link/DEOBFK3
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@DylanByers It doesn’t because they don’t control the CW. Nexstar does.
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surprised The CW made the cut here
Bernie Sanders@BernieSanders
One family, the right-wing Trump-aligned Ellisons, will soon control: TikTok CBS CNN HBO Discovery Channel BET Cartoon Network Comedy Central DC Studios Fandango Miramax MTV Nickelodeon Paramount PlutoTV Showtime TBS The CW TNT Warner Bros. And more This is oligarchy.
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