Worswick: re: VO and MCA. Funny how people can look at the same thing and interpret it differently. Like that old Kirasawa movie. The heart of it for me re: MCA is: what were we looking for in this stock in relationship to the company's intrinsic value? I've trudged out to my garage to try to find my old files on MCA, but I can't find 'em -- so let me try it from memory. Stein and Wasserman were/are very sharp business people. They built a terrific business from booking acts (Stein) to radio, to movies, etc. This was done over a period from 20's to the 70's. Now in the early '70's a person could buy the stock --never get controling interest of course - basically for the land value alone (too bad James Clarke - the resident real estate guru -was only a li'l kid -then -g-). Even by the late '70's it was undervalued for land and film library. Meanwhile these guys were working hard - or their employees were - to create value. It may or may not have been reflected in the price in the early '80's. You had to wait a long time for the stock to rise. But rise it did -- and not just because of a final buyout offer. There were two reasons for this slowness IMO: 1) Entertainment business was seen as 2nd rate, faddish, subject to whims of audience, run by creative types or dictators (even though MCA was considered the class act among movie companies for their businesslike approach). 2)Stocks of many good companies did not do so great in this time period '73-83. For example I had to wait I believe about 2 or more years to get a decent profit on FOX (I think it was FOX) after Star Wars came out - and that was THE movie at the time.
So, if you are saying it's a problem because the stock price rises too slowly or only after a LONG wait, you may be right. However this may not be because of controlling owners. In a Buffett model - IMO he would say: who cares? Stein/Wasserman are building a business with a great margin of safety, a great moat, and the value gets greater and greater every year. And the price does eventually come to fair value. The stock MCA was a buy and hold.
That was then. Now it's more iffy. Bronfman Sr. is a businessman who creates value. Maybe his family can do something more with VO and Universal. If they are not billionaires maybe they want to be -g-. Chris Craft - here your case is stronger IMO. Segal's a sharp businessman, stock is not moving much, and it's harder to see where he's going with the value or dollars ($1.5B) that he's amassed. Also with CCN, they are not as diversified or recognized (franchise and liquor) as VO, so there's some risk there. I've bought an initial small position in VO today, and I own CCN (also a small amount).
What stocks are you buying or recommending now? |
