giofranchi

You heard that gio sold, right? ;D Ahahahahah!!!! Anyway, I want to make it clear once more: I have almost no doubt twacowfca is right about LRE, and the business will go on performing exceedingly well, and will create much more shareholders value! My decision was based only on this fact: I always look for what I call (maybe naively) an “entrepreneurial force” at the helm of any business I invest in. Am I able to judge that so called “force” correctly? I don’t know… probably not… but that’s what I try to do: Mr. Brindle imo is such an outstanding entrepreneur, while I don’t feel so sure about Mr. Maloney… This is my only reason! And I hope it is clear. :) Gio

Imo VRX today is a sort of “special event” investment: exactly the sort of thing which attracts people like Paulson and Loeb. Because, if it succeeds in buying Allergan, it will be worth a lot more. Trimming a position, instead, might just be a portfolio management choice: VRX has performed very well until recently… no wonder it has grown into a disproportionately large position in many portfolios which owned it. I myself was trimming my firm’s position in VRX, until it announced its intention of buying Allergan. Then I got back in for the potential handsome upside if the deal goes through. Gio

ragu, actually I endorsed the sum of the parts analysis… that’s it! I was not really interested in any other part of the article… surely couldn’t care less about the comparison to Gordon Gekko!! ;) On the other hand, if you think the sum of the parts analysis is flawed, then I agree: the article has close to no merit… But I wouldn’t be so sure… Given its size, growth prospects, Mr. Sardar’s entrepreneurial abilities and young age, BH’s fair value imo is close to 2xBV… which is not far from the figure presented in the article. Cheers, Gio

Ahahahahah!!! That’s what I call “a cautious approach”… ;) I am not familiar: what happened with Sandstorm? Thanks, Gio

Just bought more today. :) Gio

Thank you for posting! And don’t forget that ALS no longer is only a PG… Now it is both a PG and a Royalties Portfolio Manager. The PG side of the business is where growth will come from; the Royalties Portfolio Manager side of the business in where steady cash flow will come from. It is the combination of opportunities (PG) and safety (Portfolio of royalties) that imo makes ALS very attractive today. :) Gio

Hey! I am not the author of that piece… I just found interesting a sum of the parts analysis that got to a fair value of $675! ;) Why “unfortunate reality”?! The way I see it, this could become a great buying opportunity: a hit to BH’s BV, caused by nothing more than a decline in CBRL stock price, would certainly make BH’s stock price fall, but for no real nor worrisome reason… On the contrary, if such an event actually happens, with Mr. Biglari finally on the board, CBRL imo will be a stronger, not weaker, organization than before… So, what do we have here? A lower share price… for a stronger business?! Just great!! On the other hand, what might happen instead is that CBRL’s management goes on ignoring Mr. Biglari, while copying his strategies and implementing his business optimization advices. If this is the case, CBRL will create shareholders value and we will benefit from it. Gio

--10-K 2013 --8-K Q1 2014 It seems to me that legal expenses and related fees are expensed as incurred and included in selling, general and administrative expenses. Then, expenses that are considered one time item (either related to acquisitions or not) are added back, or subtracted from, GAAP EPS to calculate Cash EPS. Actually, in Q1 2014 $48.8 million of a favorable development in legal expenses, evidently considered a one time item, were subtracted from GAAP EPS to get to Cash EPS. Gio

They are constantly introducing new products into the market… Also in the last conference call this comes out very clearly... Old ones don’t need to be “everlasting franchises” in order for cash flow to keep growing. ;) Gio

Actually, this should be checked out! Basically I have always read statements like this one from Q1 2014: It makes sense, but I cannot be sure how legal expenses are accounted for. Gio

Vinod, 1. Only legal expenses tied to acquisition and restructuring of purchased businesses are added back to GAAP earnings to calculate Cash EPS. Legal expenses tied to any other sort of litigation certainly are not. 2. I am not sure I understand what you mean: if cash flow increases over time, I don’t care where it comes from (if from old or new products). 3. Maybe this is right. But Cash EPS are supposed to represent the cash flow per share generated in a steady state. Steady state, therefore no restructuring, therefore no restructuring costs to be capitalized and depreciated. Gio

Well, but goodwill is not what you paid for a drug… Goodwill is what you paid for a company! (In excess of BV, of course!) What truly matters is: does the value of that company, even if some patents of its inevitably expire, increase over time? Or does its value decrease? If it keeps increasing, don’t worry about goodwill. Gio

+1! Very useful! :) Gio

Valeant Pharmaceuticals Responds to Allergan's Rejection of Merger Proposal http://ir.valeant.com:80/investor-relations/news-releases/news-release-details/2014/Valeant-Pharmaceuticals-Responds-to-Allergans-Rejection-of-Merger-Proposal/default.aspx Gio

--Q1 2014 Conference Call Could someone explain to me what’s not rational about this? ;) Gio

--Mr. Pearson, Q1 2014 Conference Call One thing I think might be under appreciated is a competitive advantage due to “switching costs”. In aesthetics and in dentistry, for instance, physicians are used to achieving satisfactory results using some kind of products. The time needed to learn how to use new products and the initial uncertainty of results are things they obviously do not like at all. Not only this fact gives some protection to VRX’s existing products in those markets, but VRX also invests a lot in a sale force which is trained to help physicians, when the inevitable changes finally can be postponed no longer. This is no classic R&D investment, but I would argue this kind of investment might be at least as lucrative as classic R&D investment, if not more lucrative. Gio

Biglari Holdings: Sum Of The Parts Indicates Strong Upside Gio biglari-holdings-sum-of-the-parts-may132014.pdf

Your post pretty well summarizes how it should work. Keeping in mind, like wellmont rightly pointed out, that probably oversubscription orders won’t be executed 100%. Last summer BH did something similar, and it has been very profitable (at least for me! ;)). Gio

+1 Good post! :) Gio

Just logged in to say I like you sir. You're asking the correct questions. I see a lot of people here just rehashing what the VRX talking points are without actually showing anything, I'm not sure many have read the 10-Ks. If those who say that they've done in depth due diligence and that VRX is like a consumer goods company, were to be given a pop quiz (no cheating) asking what VRX top 10 (or any number) products are and then show us why they don't face patent expiration threats; I wonder if they'd be able to answer that (again no repeating talking points, we've all heard/read them but some of us like to verify). I'll post my thoughts on this later tonight when I have time. AZ There is only one reason why amortization of goodwill might be a true cost: Mr. Pearson has paid too much for the businesses VRX has acquired. There are only two ways the price paid might turn out to be too high: 1) It is too high for those businesses, as they were when VRX first acquired them, 2) It is too high because VRX is destroying the value of those businesses. I find hypothesis n.1 hard to believe… therefore, we are left with hypothesis n.2: Here the question is: is Mr. Pearson foolishly cutting costs, or is he rationalizing costs? If he is foolishly cutting costs, he surely is destroying value, and by doing so it is very likely final evidence will be he has paid too much. If, instead, he is rationalizing costs, the end result is that those acquired businesses will be worth a lot more in the future than when VRX first bought them. Unfortunately, the answer to that question cannot be found in any 10-K or 10-Q… This is what I would do: read all the conference call transcripts of the last few years, and reason carefully on the answers provided by Mr. Pearson: if you find then even one single irrational thing, bet on the fact he is destroying value, otherwise bet on the fact amortization of goodwill is not a true cost for VRX. ;) Gio

http://blogs.marketwatch.com/health-exchange/2014/05/12/allergans-rejection-of-valeant-prompts-a-selloff-for-both/?mod=MW_home_latest_news Gio

Yeah! That's exactly what I meant! ;) Gio

Right now LMCA is selling below NAV: I think that’s the reason why you'll do well in coming years! ;) The fact investors were sleeping at the wheel, while Mr. Malone was engineering great deals, is clearly not Mr. Malone’s fault! ;) Gio

The Problem With Piketty by Mr. Charles Gave Gio The_Problem_With_Piketty.pdf

Gio