Author Topic: BH - Biglari Holdings  (Read 1416192 times)

rayfinkle

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Re: BH - Biglari Holdings
« Reply #710 on: July 28, 2014, 11:45:28 AM »
On the management / culture point: I've worked with many CEO's (as an investor and later as an operator). I'm 100% confident that good CEO's drive "good" culture--this isn't something that I can prove, but more than most things in business I'm certain of it. It's entirely possible to have a good operator as a CEO--one that is technically competent, can make deals & manage shareholders, etc.--but is nonetheless not a cultural leader. In my experience these CEO's create more fragile organizations.

My two cents is that having a great CEO who is also a cultural leader (many founder/entrepreneur CEOs are), when combined with other necessary investment characteristics, can supercharge a company (and potentially an investment). Having said this, consistently getting the assessment of a leadership team/CEO right is not something I know how to do...

Finally--to add another dimension--I've known CEOs that are technically great (know in an academic sense how to grow intrinsic value, and are good at executing this), drive "healthy" organizational behavior (that presumably flows [indirectly] to the bottom line), and are still greedy, selfish, overpaid, sharkish, comfortable "stretching the truth," and generally unpleasant to be around. Buffett seems to have a gift for discerning what matters vs. what doesn't here--but he still doesn't always get it right (Sokol). Anywho...


rayfinkle

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Re: BH - Biglari Holdings
« Reply #711 on: July 28, 2014, 11:47:02 AM »
Also, can someone explain valuetrap's statement that during rights offerings for Liberty/TCI malone's shareholders had a choice, but BH's don't?

Myth465

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Re: BH - Biglari Holdings
« Reply #712 on: July 28, 2014, 08:16:07 PM »
Gio I think people think you care what others think because when you get involved in a thread the discuss quickly moves away from the merits of the investment and into a decision about what you require as an investor.

You see all things through that framework and counter any point with your "philosophy". It becomes a platitude, but its the answer to just about every question about an Owner Manager company you hold. I can probably type it out word for word and post it in the ALS, Third Point, FFH, threads as a reply to a question.

Perhaps it works for you, but it really sidelines the discussions relating to the metrics of the individual idea, and inmo defeats the point of these boards.

With Lanesbourgh - I wanted to know what I was missing on an idea I have held for a few months. In the process I was challenged and forced to dig deeply to answer those questions. I may have convinced someone to buy along the way. Either way we both learned more about the idea and now I know what Mr. Market is thinking. I can now review the investment in a better light. Now we may both lose money with me taking him down with a bad idea, or we may both make money, but ultimately we both understanding the holding more. I have no idea if he owns $10k or $100k, but his questions forced me to think more about the idea. The discussion was about the idea and not his requirements being explained 20 times.

http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/lrt-to-lanesborough-reit/

Similar with Life Time Fitness. Yada and I shared our thoughts about why we didnt like the idea. The original poster may invest, and we will likely move on to other things. We think its fairly valued. He may have learned something or not. We have made our points and will move on. We think its fairly valued, we require more. He may not, but points have been made.

---

When you get involved in an idea it turns into a discussion about you running your own business, compounding wealth for 20 years at 15%, your love of owner managers, ect. For example look at the Clarke thread, you basically almost turned a productive thread where anyone who invested made 30% - 50% into that whole spill about your "philosophy" which went on for a few pages.

Ragu has made his point, and moved on. He will likely continue to comment as new things on BH are released and will analysis the business as a business. I can respect that even though we clearly dont agree. His point is to learn about an idea in which he has a substantial portion of his wealth behind. Similar to me with Clarke which was a 35% holding at one point. I think we will all learn from these posts, and hopefully he makes money.

You will likely continue to repost the same info about being an owner manager to any reply to this thread.  I dont really see the point, but thats just me.
We know more about your goals, and what you require from an idea, then perhaps any other poster on this board....   I would also say I know less about what you think about the merits of any of the ideas you post on than any of the other people posting in those investment options.

Just my overvalued 2 cents.....

Liberty

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Re: BH - Biglari Holdings
« Reply #713 on: July 28, 2014, 08:36:22 PM »
Maybe Gio wouldn't have to spend quite so much time defending his approach if people accepted that it works for him and stopped constantly challenging him. Just saying.

I think it's great that he's transparent about his process and framework, and I wish more successful investors did the same so we could all learn what works for different folks and maybe incorporate some aspects into our own approach.
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Myth465

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Re: BH - Biglari Holdings
« Reply #714 on: July 28, 2014, 09:12:15 PM »
Maybe Gio wouldn't have to spend quite so much time defending his approach if people accepted that it works for him and stopped constantly challenging him. Just saying.

I think it's great that he's transparent about his process and framework, and I wish more successful investors did the same so we could all learn what works for different folks and maybe incorporate some aspects into our own approach.

You could be right.
I am not sure if the conversation continues due to him pushing his point, or others constantly challenging.
I just notice the reoccurring conversation, and not the catalyst.

That is a good point, and something I hadnt considered.
I accept it, believe its valid, and believe it could work well especially for someone without the time to review hundreds of ideas.
I even stated so earlier in the thread, where Gio thought I was perhaps making fun of him.

People have been trying to push him towards deep value, and I have noticed those back and forths. Perhaps you may be on to something.
Agreeing to disagree has its merits. I have a troll streak, and had to learn along time ago, that sometimes you have to agree to disagree. 

giofranchi

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Re: BH - Biglari Holdings
« Reply #715 on: July 28, 2014, 11:15:34 PM »
I agree with the critics of Biglari, as I said in my posting:

   Regarding BH, yes, Biglari is likely to keep generating significant alpha in the future. But his long term track record indicates that most of that overperformance will go to his pocket, and not the shareholders'...

I really think you are undervaluing Biglari. Tell me of a single person who has become and stayed extremely rich robbing his/her shareholders… To rob your own shareholders simply is not good business… Therefore, you are undervaluing Biglari. Instead, I think:
1) He will become and stay extremely rich,
2) He knows what’s good business, and what’s not,
3) He will become and stay extremely rich, because he knows what’s good business, and will act accordingly.

On the other hand, I also think the fact you don’t like his character and behavior is not a predictive attribute:
Someone brought him up, therefore let’s talk a bit about Berlusconi! Could you imagine a bigger assh… than Berlusconi?! He is circa 80 and was accused of having had sex with a girl not yet 18 years old…! No, even Biglari cannot hold a candle to Berlusconi, when it comes to building for oneself an ill reputation and a bad public image! And don’t even think of comparing Berlusconi’s bloated ego to Biglari’s… Biglari might think he is the king of BH… Berlusconi thought he was the new king of Italy! Talk about orders of magnitude!
Yet, Berlusconi has become and stayed extremely rich… because he knows what’s good business, and has acted accordingly. Needless to say the share prices of his companies have done very well through the years! ;)

Finally, also my own experience in business makes me somehow disbelieve your conclusion about Biglari: I have already had many business partners, some were friendly and kind, others were aggressive and arrogant. Everyone of them, with no exception at all, has proven to be reliable, when things were good and easy, instead has proven to be much less reliable, when things went south. That’s why I put much more weight on the owner/manager’s abilities to stir the boat away from any possible danger and towards any opportunity for profitable growth, than on his/her peculiarities of character.

Gio
Portfolio: AAPL, AMZN, BABA, BOSS, BRK.B, FB, FFH, FIH.U, FINX, FWONA, GOOG, IBB, JPM, LBRDA, MKL, NKE, QQQ, SFTBF, SMH, TCEHY, V, XBI, XT

giofranchi

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Re: BH - Biglari Holdings
« Reply #716 on: July 28, 2014, 11:55:48 PM »
Gio I think people think you care what others think because when you get involved in a thread the discuss quickly moves away from the merits of the investment and into a decision about what you require as an investor.

Myth,

I apologize if this might sound egotistical… but I don’t write for you or for anyone else… I write for myself alone.

And to know if I want to hold a business for the very long term, I need to make clear very few things… and to continually put those things to the test… to think about them over and over again… to always keep them under check, and to realize if something has changed as soon as possible… I also like other people to challenge my conviction about those few very important things… and to see if, notwithstanding such a challenge, my conviction is still whole or has cracked…

Because this is what’s important to me.

Of course, one thing is to think and act for personal interest, a completely different thing is to bother other people. Though I don’t take pride in acting solely for my own personal interest, I can at least accept it, until such a behavior begins to harm other people.
My thought is this: well, those who are not interested in what I say… will simply skip all my posts!!
Am I making it too easy? Am I instead really annoying you, tombgrt, writser, premfan, etc.?

If so, like I have already said, I apologize. And in the future I will post with much less frequency… only when I am sure I am not repeating myself! ;)

Gio
« Last Edit: July 29, 2014, 01:59:51 AM by giofranchi »
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Myth465

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Re: BH - Biglari Holdings
« Reply #717 on: July 29, 2014, 03:27:26 AM »
Gio I am just one person here, so I wouldnt recommend changing anything at all.
Also quite a few people seem to get a kick out of your posts.

It sounds like we basically do the same thing, except I typically want people to critique the idea I am investing in or posting about, and you want them to challenge the idea in context to your philosophy. At the end of the day the whole point is to leave the table with more chips then your sat down with, hopefully we can all accomplish that goal.

 

wachtwoord

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Re: BH - Biglari Holdings
« Reply #718 on: July 29, 2014, 04:07:33 AM »
I agree with the critics of Biglari, as I said in my posting:

   Regarding BH, yes, Biglari is likely to keep generating significant alpha in the future. But his long term track record indicates that most of that overperformance will go to his pocket, and not the shareholders'...

I really think you are undervaluing Biglari. Tell me of a single person who has become and stayed extremely rich robbing his/her shareholders… To rob your own shareholders simply is not good

Michael Dell with his forced buy back miles below fair value.
"Beware of he who would deny you access to information, for in his heart he dreams himself your master"

giofranchi

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Re: BH - Biglari Holdings
« Reply #719 on: July 29, 2014, 04:12:24 AM »
Michael Dell with his forced buy back miles below fair value.

Imo Michael Dell is trying desperately to salvage his company... and it doesn't sound like good business to me... ;)

I mean, when you are in dire straits… all bets are off… not because Mr. Dell is a rogue… Not at all! I am sure he is a great guy… It is just because business is that way: once you have put yourself in a corner, it is already too late… and men’s behavior becomes as unpredictable as that of a wounded animal… more or less! ;D

Anyway, Mr. Dell is still very rich thanks to a large portfolio of investments that have nothing to do with Dell Inc. … Instead, how Dell Inc. will perform in the future is yet to be seen!

Gio
« Last Edit: July 29, 2014, 04:21:49 AM by giofranchi »
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