Read Peter Lynch, "One Up On Wall Street". Page 117-118.
Lynch writes about TCI (in 1977):
"I wish I'd bought more shares of Telecommunications, Inc., a cable
company that sold for 12 cents a share in 1977 and $31 ten years
later, up 250 fold. I had a very small position in this, the largest U.S.
cable company, because I didn't appreciate the value of the assets. The earnings were poor and the debts were worrisome, so on the
traditional measures, cable was an unatttractive business. But the assets, in the form of the cable subscribers, more than made up for
the negatives. All the people with an edge in the cable business could have known it: and so could I. Regrettably, I never took more than a piddling position in the cable industry, despite the urging of Fidelity's Morris Smith, who periodically pounded on my table to convince me to buy more. He definately was right- for the following important reason:
Fifteen years ago, each cable subscriber was worth about $200 to the buyer of a cable franchise, then ten years ago it was $400, five years
ago $1,000, and now it's as high as $2,200. People in the industry keep up with these numbers, so it's not exactly esoteric information. The millions of subscribers to Telecommunications, Inc., made it a huge asset." |
