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How do these execs ever sleep at night?

The Wall Street Journal writes

A wave of expected big media mergers would transform AT&T Inc. and Comcast Corp. into the two most indebted companies in the world, a standing that carries uncharted risks for investors in the firms’ bonds.

Here’s the Journal’s chart:


The Journal wrote:

The debt-fueled buyouts by AT&T and Comcast are extreme examples of a decadelong surge in corporate borrowing that is stoking investor anxieties about what will happen as the economy slows and global interest rates rise. The ratio of debt to corporate earnings, commonly called leverage, has also risen, giving companies less financial cushion to absorb market shocks.

Global corporate debt excluding financial institutions now stands at $11 trillion, and the median leverage for such companies rated investment grade has jumped 30% since the eve of the financial crisis in 2007, according to Moody’s research. Most companies issue new loans and bonds to repay debt, and investors are concerned about how companies will refinance their record-breaking debt loads when capital markets experience their next significant downturn.

Officials at AT&T and Comcast say the refinancing risk from their postdeal debt would be minimal because they plan to quickly repay much of the debt with cash generated from the combined businesses. AT&T, for example, is expected to produce $8 billion to $10 billion of free cash flow-or cash from operations minus capital spending-that could be applied to debt reduction, analysts say. It is also common for telecom companies to carry high debt because they invest heavily in their networks and their customers provide them with reliable revenue.

Heavy borrowing by telecom and media companies fueled a surge of defaults in the early part of the last decade by the likes of WorldCom Inc. and Global Crossing, but fund managers said AT&T and Comcast are different because they have vast, profitable businesses to support their debt.

The operative word is “different.” And it’s nonsense. The two industries these companies are in — telecommunications and media — are among the fastest-changing industries around. Telecom is about to go 5G. And the new, fast Internet is enabling new media companies to compete with Time Warner’s HBO, TNT and CNN.

If the merger gambles pay off, the execs will look like roses. If they gambles don’t pay off, the executives will leave with hefty severance pay. For them, it’s a win-win situation. For us, these are stocks not to touch.

How are they going to compete against Netflix? The following chart is mean. I feel mean for running it. It compares Netflix with AT&T and Comcast over the past two years.


The Journal also ran a chart. Theirs was kinder:


Should I short Comcast and AT&T? Now that’s an an interesting idea.

Magic Machine

Here are two pictures of our German Viessmann boiler. It heats the house and the water.

Boiler2 Boiler1

A few years ago we had a thunder and lightning storm. A surge came up the power line and did $4,000 of damage to the sensitive computer controls of our boiler. (Who knew that boilers used computers?)

I called the distributor and asked “Why not a surge arrestor?” They called Viessmann who said German electricity was “perfect” and they didn’t need such devices — in Germany. But I was in America, where we are not perfect. They demurred and eventually the distributor installed a Furman PL-8C:


Here’s what my installation looks like:


Last Friday when we got to the house, I found we had no hot water. The boiler was dead and the Furman had a big red light showing “Extreme Voltage.” I turned the Furman off and then turned it on. My precious boiler started…Ten minutes later I enjoyed a hot shower, happy in the thought that the Furman had just saved me $4,000.

You buy a Furman at — where else? — Amazon for $150. Best bargain in the history of the world. Summer thunderstorms are coming. Buy here. 


Easter Sunday morning, the minister reached into his bag of props and pulled out an egg. He pointed at the egg and asked the children, “What’s in here?”

“I know!” a little boy exclaimed. “Pantyhose. “

A family

The prospective father-in-law asked, “Young man, can you support a family?”

The surprised groom-to-be replied, “Well, I was just planning to support your daughter. The rest of you will have to fend for yourselves.”

Church ushers

A little boy in church watched the ushers pass around the offering plates.

When they came near his pew, the boy said loudly, “Don’t pay for me daddy, I’m under five.”

The water pistol

When my three-year-old son opened the birthday gift from his grandmother, he discovered a water pistol..

He squealed with delight and headed for the nearest sink.

i was not so pleased. i turned to mom and said, “i’m surprised at you. Don’t you remember how we used to drive you crazy with water guns?”

Grandma smiled and then replied….. “I remember.”

Grandma’s age

Little johnny asked his grandma how old she was.

Grandma answered, “39 and holding.”

Johnny thought for a moment, and then said, “How old would you be if you let go?”

Harry Newton, who can’t explain the heartlessness of separating children from their parents or the pointlessness of escalating a trade war. My fear is I’m unable to predict what insanity will happen next and hence what I should do with my portfolio? For now I’m holding a portfolio heavily into Internet technology stocks and light on manufacturing. On the weekend, I found this quote:

The populist fervor these voters express is almost as old as the nation: They see themselves playing by the rules but still getting screw*d, disdained by elites above them and mooched off by freeloaders beneath.

There you are. That pretty well excuses any behavior — so long as it’s different to what happened in the previous administration.