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Thumping the Mail Bag


"Enjoy the 3-Day Weekend! [NB: Not you, Todd-O... you work]"


I've got one full lobe of my brain out the door for the long weekend. Tomorrow is ninth annual Great Friday golf tradition where various market-type buddies and I golf from dawn until dusk. It's very much a secular tradition.

Before I start training for that, let's jump into the mail bag:

Minyan "hey, HEY, hey" Rodg, writes:

Prof. Macke,

Thanks for that great piece on TiVo (TIVO) and Comcast (CMCSK). I've had a small short position in CHTR for a long time, which continued down even when the market was going up. I've also been waiting for the economy to turn down to short Comcast because I think cable is one place many people will have to cut back when things get tight. Both companies have negative net tangible assets and lots of debt.

What do you think about the hypothesis that Cable operators are especially vulnerable to an economic slowdown?

Minyan Rodg

Thank you, my man!

I don't disagree, exactly, with the idea of cable operators getting inordinately hammered in a slowdown. However, I do think that the bigger problem is something that will eventually drag them down, regardless of the economy.

The number of different companies spending untold billions creating the ability to pipe data into our homes in various ways is a game that is obviously going to end in horrors. The MSO and telcos are hurling cheap-debt fueled money at just about anything remotely bundle-able with no real hope of making high-return cash deployments.

The companies are solving problems we don't have to meet demand that doesn't really exist. I mean... 10's of billions creating a new way to pipe cable television into homes via the web?

That's simply silly.

These companies all strike me as similar to the ideas hit on in yesterday's buzz about the value of "eyeballs" et al. The investments being made rely on something currently marginless becoming profitable in the future. As long as the money is cheap and they can keep painting glossy pictures of Next Big Things all is well... and then it's very much not well at all.

Which is a long way of saying, "I think a basket short of the cable industry works for a lot of reasons in the Super Big Picture but there's a problem in finding a catalyst for the short".

In my opinion, as always.

Thank you again for all the very kind emails regarding my ultra-sound experience. Genuinely moving.

Of the notes, Minyan Neal offered my favorite curiously interesting-to-me idea. I leave you all with that note and my wishes for a great weekend:

Congrats, Macke!

You gotta have a naming contest and I will be happy to start:

Jimmy "Superfly" Macke

Kid Macke: Would save having to remember his name.

Earl Macke

Otto Macke: You just don't see kids named this anymore, he would be unique

Bumpy Macke: Think about it, has anyone named Bumby ever been an unhappy person. He would automatically cheer people up. "Hey, look here comes Bumpy!

Slappy Macke: See above.

Mickey Macke: Obvious Reasons

In the event of a contest breaking out, Neal is officially in the lead with his entry of "Jimmy Superfly" Macke.

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Position in TIVO

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