Author Topic: BH - Biglari Holdings  (Read 1416215 times)

link01

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Re: BH - Biglari Holdings
« Reply #690 on: July 27, 2014, 10:03:50 AM »
Hello Gio,

You seem like a great businessman and a rational investor.  Hence I don't see why you seek approval and validation in your approach. Continue compounding and living the dream. Forcing people to see the world in your view is a recipe for argument and useless semantics.  If your desire is to be a teacher or future investment guru then results speak louder than words. I would encourage you to build a public track record. This would satisfy your urge to preach your thoughts ( via shareholder letters).

It seems to me the context of the majority of your posts is teaching. You enjoy explaining your investment process. I bet you would write brilliant shareholder letters. Maybe investigate how to get in the public domain. This would build you credibility and a platform to teach to your followers.

premfan
no doubt that whenever gio gets actively involved in a thread it elicits a lot of interest! that's especially true when its a stock he has a position in & conviction in (actually, does gio ever have a stock position he doesn't also have conviction in?). his passion, generosity, & unfailing gentlemanly conduct is contagious. look at how the lre thread has all but dried up & withered since he sold & lost interest, despite the oft brilliant commentary from twa.

I don't get the same impression at all that gio seeks approval or validation or is interested in forcing people to share his world view. I think he just genuinely enjoys & seeks to learn from the debate between different & often diametrically opposed viewpoints.


writser

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Re: BH - Biglari Holdings
« Reply #691 on: July 27, 2014, 10:51:59 AM »
it clearly is not so… I simply found a better place for my capital… what I think might turn out to be a better place… As I have always said, I might be wrong!

Back in April you mentioned you suddenly had a boatload of cash and no good ideas. You also said that you wouldn't buy back Lancashire at that point - regardless of price. As far as I am concerned that is not "finding a better place for your capital". It is also not a case of "why accepting only 2) when you can get 1) and 2) somewhere else".  I would call that "dumping a huge position at any price".

Almost the very same day I sold LRE, I also bought LMCA, GLRE, TPRE, and more ALS. ;)

They might not have been great ideas, because 3) was not truly a bargain price… Yet, I preferred GLRE at 1.2 x BVPS with Einhorn to LRE at 1.4 x BVPS without Brindle… Is that so difficult to understand? ???

Gio

That would be completely understandable. But then why do you first tell us you don't know what to do with your boatloads of cash? And why tell us you won't buy back Lancashire at any price? Today you make it sound as if you swapped into something else based upon a conscious relative valuation. That's not the impression I got at the time. Guess I am wrong :) . Cheers.
I'm sorry if I have offended you. Please contact this forum's safe space coordinator to work things out.

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Parsad

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Re: BH - Biglari Holdings
« Reply #692 on: July 27, 2014, 06:29:08 PM »
  Come on, guys, lay off Gio. I think that the strategy he is following is quite rational.


I don't think people are trying to specifically pick on Gio.

What you have is an investment manager who did everything he could in his early days to mimick Buffett...right down to the font and spacing used in the Berkshire annual reports.  Every thing he said and did sounded right!

Then when he began his foray using a public vehicle to acquire other businesses, once again, the prose, deeds, conduct were identical.

Then something started to unravel and the chinks in the armor began to appear.  Not a simple collapse in ethics, but massive breaches to install compensation plans, get control at all costs, and burnish a name rather than the reputation!  At this point, those sucked into the vortex began arguing that he never said he was Buffett. 

Gio, along with Ragu, and a handful of others are defenders of the faith.  Nothing wrong with that and completely entitled to say what they believe.  But then there are a number of others, including myself but I really don't care at this point unlike in the past, who can't swallow the chopped liver the defenders are feeding us. 

So no one is picking on Gio...they just don't like what he is feeding us!  Cheers!   
No man is a failure who has friends!

shalab

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Re: BH - Biglari Holdings
« Reply #693 on: July 27, 2014, 06:39:30 PM »
I love Gio - looking forward to him listing his company in OTC  ;D. He is ethical and honest and is investing his company's money.

Ragu also seems to be a decent value investor and shares his opinions openly - he has link to his blog in his profile.

Biglari is another animal altogether(IMHO) - his maneuvers should be added to 'financial shenanigans' - he has been very clever in how he played the game.

  Come on, guys, lay off Gio. I think that the strategy he is following is quite rational.


I don't think people are trying to specifically pick on Gio.

What you have is an investment manager who did everything he could in his early days to mimick Buffett...right down to the font and spacing used in the Berkshire annual reports.  Every thing he said and did sounded right!

Then when he began his foray using a public vehicle to acquire other businesses, once again, the prose, deeds, conduct were identical.

Then something started to unravel and the chinks in the armor began to appear.  Not a simple collapse in ethics, but massive breaches to install compensation plans, get control at all costs, and burnish a name rather than the reputation!  At this point, those sucked into the vortex began arguing that he never said he was Buffett. 

Gio, along with Ragu, and a handful of others are defenders of the faith.  Nothing wrong with that and completely entitled to say what they believe.  But then there are a number of others, including myself but I really don't care at this point unlike in the past, who can't swallow the chopped liver the defenders are feeding us. 

So no one is picking on Gio...they just don't like what he is feeding us!  Cheers!   
« Last Edit: July 27, 2014, 08:53:45 PM by shalab »

QLEAP

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Re: BH - Biglari Holdings
« Reply #694 on: July 27, 2014, 08:02:15 PM »

All may be true, but I have so rarely seen someone so passionate in the defense of a CEO.
Just trying to figure out why. Ultimately this will all sort itself out via SEC fillings and BH events.

This is fast becoming about as useful a thread as the one on Sears or the one on LVLT.

Well, Ragu has definitely put his money where his mouth is (I believe >50% of his portfolio is in BH) and he is in it for the long haul.

My last word on this thread (and not directed at you Myth):

what I find disconcerting is that there are folks on this thread who believed Chad Wasilenkoff was the second coming of Buffett just a year earlier ignoring the excessive compensation, share price destruction yada yada yada. Yet they are out here on this thread pontificating on Sardar/BH with no position in the stock. Why not throw water on your burning house before you help your neighbor?

Besides, BH has fared much much better than FTP. We will just have to wait and see how well he does.

PS: No position in BH and I have mixed feelings about Sardar

bargainman

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Re: BH - Biglari Holdings
« Reply #695 on: July 27, 2014, 11:04:14 PM »
Quote
edit: oh, & if biglari continues with these rights offerings below book value its going to take some adjustments to calc bh's real growth in bvps when attempting to plot his scorecard on that metric. I thought it was interesting that he said he'll continue to make use of rights offerings at least until he's able to push thru a shareholder vote for a dual class of stock, tho I don't remember where I read that at this time

My guess is that he will continue to do rights offerings so he can get more of the company when he has the capital at a lower price. Makes perfect sense - IMO.



Well, to calculate BVPS I simply use the number of shares in the first page of the 10-K filing. Just like Biglari himself has suggested to do. That number has increased from 2010 to 2013, and, if Biglari keeps making use of these rights offerings, it will get larger and larger.

Gio

I don't quite understand this logic. In particular doesn't each rights offering actually reduce book value per share? For each share he is issuing, he is only getting 250/420 worth of the value into book which by default means it should be reducing book value per share is that not correct? What does his compensation say about adjustments for these sorts of rights offerings? Do you know?

giofranchi

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Re: BH - Biglari Holdings
« Reply #696 on: July 27, 2014, 11:26:59 PM »
Hello Gio,

You seem like a great businessman and a rational investor.  Hence I don't see why you seek approval and validation in your approach. Continue compounding and living the dream. Forcing people to see the world in your view is a recipe for argument and useless semantics.  If your desire is to be a teacher or future investment guru then results speak louder than words. I would encourage you to build a public track record. This would satisfy your urge to preach your thoughts ( via shareholder letters).

It seems to me the context of the majority of your posts is teaching. You enjoy explaining your investment process. I bet you would write brilliant shareholder letters. Maybe investigate how to get in the public domain. This would build you credibility and a platform to teach to your followers.

premfan
no doubt that whenever gio gets actively involved in a thread it elicits a lot of interest! that's especially true when its a stock he has a position in & conviction in (actually, does gio ever have a stock position he doesn't also have conviction in?). his passion, generosity, & unfailing gentlemanly conduct is contagious. look at how the lre thread has all but dried up & withered since he sold & lost interest, despite the oft brilliant commentary from twa.

I don't get the same impression at all that gio seeks approval or validation or is interested in forcing people to share his world view. I think he just genuinely enjoys & seeks to learn from the debate between different & often diametrically opposed viewpoints.

Quote
Reading makes a full Man, Meditation a profound Man, discourse a clear Man
--Ben Franklin

This is the only reason why I like contributing to the board so much: because I have found out that the process of a) writing about an investment thesis of mine, b) receiving feedbacks from many people around the world, with different cultural and working backgrounds, and c) reasoning about their responses and answering back, is a great way to get “clearness” of mind, and therefore conviction about an investment opportunity.

Besides this, I really don’t care about approval and validation, I don’t care about public fame or a public track-record, I certainly don’t care about forcing the way I see the world on anyone (I even doubt there is a “way” I look at the world…), and of course I couldn’t care less about teaching platitudes to anyone!! ;)

All I care for:
1) To live many joyful moments with the people I love
2) To compound my capital at 15% annual for the next 45 years

PS
I must admit I also find arguing with people who disagree with me… until they finally agree with me… to be much fun!! ;D ;D ;D

Gio
« Last Edit: July 28, 2014, 02:06:15 AM by giofranchi »
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giofranchi

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Re: BH - Biglari Holdings
« Reply #697 on: July 27, 2014, 11:49:18 PM »
And why tell us you won't buy back Lancashire at any price?

Quote
The Master’s Eye will do more Work than both his Hands
--Ben Franklin

This might be another platitude… Actually, also Ben was accused by his detractors to be the master of platitudes… at least one thing we have in common!! ;)

Of course, for the JNJ, KO, WMT of the world that quote might not be true anymore…
Anyway, I think it is clear by now the companies I look at are still much younger, much smaller, and much riskier (of course, they also have imo the possibility of growing much faster).
Therefore, both if you look for downside protection, someone who knows all the risks and stirs the boat away from them, and if you look for future success, someone who knows all the opportunities for growth and stirs the boat towards them, I think you'd better demand a very capable and reliable “Master” at the helm.

Unfortunately, our knowledge of public companies is somewhat limited. And the only way we could judge a “Master” is by what he has achieved in the past… I know what Mr. Brindle has accomplished since he founded LRE and in the years before its founding… while I know nothing about Mr. Maloney...

Gio
« Last Edit: July 28, 2014, 03:20:43 AM by giofranchi »
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giofranchi

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Re: BH - Biglari Holdings
« Reply #698 on: July 28, 2014, 12:04:28 AM »
I don't quite understand this logic. In particular doesn't each rights offering actually reduce book value per share? For each share he is issuing, he is only getting 250/420 worth of the value into book which by default means it should be reducing book value per share is that not correct? What does his compensation say about adjustments for these sorts of rights offerings? Do you know?

Sorry, what I meant is this:

Each rights offering increases the number of shares outstanding. Yet, in my calculation of a 21% CAGR in BVPS over the last three years I have already considered their dilutive effect and a larger number of shares outstanding at the end of 2013 than at the end of 2010.

I don’t know exactly how these rights offerings will effect Biglari’s compensation. Maybe Ragu does and might shed some light on this topic.

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

wachtwoord

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Re: BH - Biglari Holdings
« Reply #699 on: July 28, 2014, 04:52:47 AM »
Selling LRE: selling to swap into something else, or selling because you think the market price is above the value is rational. Selling at any price is not. There is a inherent value to any business and selling with for example 99% discount to that is irrational (except if you know of an investment with an even larger discount).
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