Author Topic: BH - Biglari Holdings  (Read 1134432 times)

tombgrt

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Re: BH - Biglari Holdings
« Reply #1530 on: March 24, 2015, 08:19:36 AM »
Tombgrt - do you consider Todd & Todd's performance fee at berskshire theft of shareholder money?

Tombgrt - do you consider Todd & Todd's performance fee at berskshire theft of shareholder money?

Ah! That is a good question! ;)

Gio

Well it's not as bad as at Biglari (And he's getting that compensation because he set it up that way, not because he did that well.) but yes, generally I think it is legal theft. I don't believe any manager, no matter how talented, should be paid many tens of millions, let alone billions, to invest money that is not theirs. Scalable jobs (artists, football (European) stars, investment managers, top CEO's with outsized bonusses, ....) take the  idea of capitalism too far and are generally very unfair for society as a whole. That is my personal opinion and I know many will disagree.

Of course I realize that this is how the system works and that change is very unlikely as you will always find people willing to pay up.

Tombgrt - do you consider Todd & Todd's performance fee at berskshire theft of shareholder money?

10% over 3 yr rolling S&P is a little different than 25% over 6%.  Biglari can have a banner year and take a large % of shareholder capital (as he did the past few years). Also, Todd and Ted are managing a pure investment portfolio.

Taking a percentage of investment gains is different than taking a % of the change in book value of a business. The S&P has an ROE of like 15%. Making an ROE that exceeds 6% is nothing special and doesn't deserve a fat incentive fee on permanent capital. Outperforming the S&P over 3 yr rolling periods with multiple billions is special and very likely deserves 10% of the out-performance.

Biglari and Groveland: Scylla and Charybdis.

Exactly. Also, the whole structure is absurd and reeks of conflicts of interest.


globalfinancepartners

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Re: BH - Biglari Holdings
« Reply #1531 on: March 24, 2015, 08:25:32 AM »
I'm not sure, but if there is another it is likely Bojangles, which will probably IPO sometime this year.  Nobody else is close to that kind of streak in the US.

Update in yesterday's filing -

http://www.sec.gov/Archives/edgar/data/93859/000092189515000697/defa14a07428007_03232015.htm

Thank you!

Is there another restaurant chain with 25 consecutive quarters of increased same store sales in the US?

Gio

giofranchi

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Re: BH - Biglari Holdings
« Reply #1532 on: March 24, 2015, 08:26:18 AM »
http://boards.fool.com/this-was-posted-on-sumzero-today-and-i-remember-29101767.aspx?sort=threaded

A piece of advice: anyone who has a strong and very well-reasoned criticism towards Biglari is very welcomed, but should stop calling him “Big Liar”… By this time it is just not possible to take seriously a person who keeps calling Biglari that way… It clearly shows he is attacking Biglari the person, because he has no clue how to attack Biglari’s results!

If you want to attack his business results, very well! Do all you can to convince me! If I have lost some piece of information along the way, I want to know which! If you think results in the future might go south, very well! Tell me why! I truly want to understand!

But, please!, stop calling him “Big Liar”!! ;)

Cheers,

Gio
« Last Edit: March 24, 2015, 08:29:53 AM by giofranchi »
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mcmaaaaath

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Re: BH - Biglari Holdings
« Reply #1533 on: March 24, 2015, 08:35:27 AM »
Tombgrt - do you consider Todd & Todd's performance fee at berskshire theft of shareholder money?

Tombgrt - do you consider Todd & Todd's performance fee at berskshire theft of shareholder money?

Ah! That is a good question! ;)

Gio

Well it's not as bad as at Biglari (And he's getting that compensation because he set it up that way, not because he did that well.) but yes, generally I think it is legal theft. I don't believe any manager, no matter how talented, should be paid many tens of millions, let alone billions, to invest money that is not theirs. Scalable jobs (artists, football (European) stars, investment managers, top CEO's with outsized bonusses, ....) take the  idea of capitalism too far and are generally very unfair for society as a whole. That is my personal opinion and I know many will disagree.

Of course I realize that this is how the system works and that change is very unlikely as you will always find people willing to pay up.

Tombgrt - do you consider Todd & Todd's performance fee at berskshire theft of shareholder money?

10% over 3 yr rolling S&P is a little different than 25% over 6%.  Biglari can have a banner year and take a large % of shareholder capital (as he did the past few years). Also, Todd and Ted are managing a pure investment portfolio.

Taking a percentage of investment gains is different than taking a % of the change in book value of a business. The S&P has an ROE of like 15%. Making an ROE that exceeds 6% is nothing special and doesn't deserve a fat incentive fee on permanent capital. Outperforming the S&P over 3 yr rolling periods with multiple billions is special and very likely deserves 10% of the out-performance.

Biglari and Groveland: Scylla and Charybdis.

Exactly. Also, the whole structure is absurd and reeks of conflicts of interest.

You guys may be interested to know that Carl Icahn pays his son Brett and another lieutenant a combined 15% of returns above a 4% hurdle. The two are splitting about $360m this year. 

http://www.forbes.com/sites/nathanvardi/2015/03/05/brett-icahn-stands-to-make-183-million-at-dads-investment-company/


rkbabang

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Re: BH - Biglari Holdings
« Reply #1534 on: March 24, 2015, 08:48:42 AM »

A piece of advice: anyone who has a strong and very well-reasoned criticism towards Biglari is very welcomed, but should stop calling him “Big Liar”… By this time it is just not possible to take seriously a person who keeps calling Biglari that way… It clearly shows he is attacking Biglari the person, because he has no clue how to attack Biglari’s results!

If you want to attack his business results, very well! Do all you can to convince me! If I have lost some piece of information along the way, I want to know which! If you think results in the future might go south, very well! Tell me why! I truly want to understand!

But, please!, stop calling him “Big Liar”!! ;)

I haven't and won't go around calling him "Big Liar", but it IS his personal integrity which I have serious questions about not his investment results.  That being the case, attacking his integrity, his greed, and his honesty is the entire point of the case against him. No one doubts that he will make a lot of money, what is in doubt is to what extent the outside shareholders will share in the gains long term.  Because I don't trust him I believe the current compensation plan and corporate structure is only the beginning of the ways he will dream up to fleece his shareholders.  Maybe I'm wrong and you are correct that once he "has enough" he will tone down all of these shenanigans and be content to profit along with his shareholders not from them, but I'm no longer willing to bet on it.
 

timmerjames

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Re: BH - Biglari Holdings
« Reply #1535 on: March 24, 2015, 08:51:12 AM »
Thanks tombgrt for the response...was just wondering if it was a philosophical issue for you.

Honestly, I don't know what the right number is but I can say without a doubt I much prefer the current compensation structure to the typical issuance of stock options and grants to every tom dick and harry in the company for doing nothing more than just showing up for work. Most stock buybacks from companies just go towards the dilution of the stock options.

Tim Eriksen

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Re: BH - Biglari Holdings
« Reply #1536 on: March 24, 2015, 09:05:27 AM »
Just curious about the Lion Fund's annual returns. Anybody know what the Lion Fund did in 2009?

In the 2007 AR of the Lion Fund you can find Biglari’s investment performance since inception. Then on the recently published letter by the independent directors of BH you can find Biglari’s investment performance since 2009. That leaves 2008 out. But, given the large amount of the Lion Fund’s capital invested in S n S, I guess BH’s stock price in 2008 could be a good estimate (-12.1%).

Of course, those are out of this world numbers!

I repeat: given his 15 years track record, Biglari deserves dual-class shares that put him in full control of BH, and deserves to be paid what he is asking.

Things might change in the future… I hope they won’t! ;)

Cheers,

Gio

2008 performance for Lion fund was -28.1%.

giofranchi

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Re: BH - Biglari Holdings
« Reply #1537 on: March 24, 2015, 09:15:27 AM »
2008 performance for Lion fund was -28.1%.

Thank you! :)

Gio
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frugalchief

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Re: BH - Biglari Holdings
« Reply #1538 on: March 24, 2015, 09:31:26 AM »
SNS & Maxim sponsoring an Indy car...

http://motorsportstalk.nbcsports.com/2015/03/24/rll-adds-steak-n-shake-for-five-races/

On another note, didn't The Lion Fund try to buy shares of a baseball team in Indianapolis about 10 years ago?

thepupil

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Re: BH - Biglari Holdings
« Reply #1539 on: March 24, 2015, 09:43:39 AM »
SNS & Maxim sponsoring an Indy car...

http://motorsportstalk.nbcsports.com/2015/03/24/rll-adds-steak-n-shake-for-five-races/

On another note, didn't The Lion Fund try to buy shares of a baseball team in Indianapolis about 10 years ago?

I don't know anything about Biglari's involvement, but the stock you are probably talking about is Indians Inc. a Walker's Manual OTC collector's item w/ a 5 figure share price; not many publicly traded minor league baseball teams out there. 

EDIT: here it is: http://www.ibj.com/blogs/4-the-score/post/3606-tribe-stockholders-shut-out-biglari
« Last Edit: March 24, 2015, 09:45:50 AM by thepupil »