giofranchi

Yes! Of course you are right. But you know I am investing in BH because I think Biglari’s business acumen is a better predictor of success in 1) to 5) than his character flaws are a predictor of failure. Many people instead think otherwise. Therefore, I want to monitor his successes and failures closely. And to admit I was wrong, if failures exceed successes. That’s it! Yes, sorry! My figure was completly wrong! Cheers, Gio

There is a section in the most recent AR titled “Our Strategy’s Structural and Competitive Advantages”. I think that section explains quite well why Ackman believes PSH should trade at a premium to NAV. If he is right or wrong, I cannot tell… Capital gains are recognized as earnings, though taxes in Guernsey are almost negligible. Gio

Buffett has said many times he likes BRK shares to trade around FV. That’s what I think Ackman means. Cheers, Gio

I have just bought more PSH. Cheers, Gio

These are imo the things to look at: 1) The Maxim turnaround 2) How BH’s investment in CBRL develops 3) The rate at which new franchise units open (I want to see 20-25 per year) 4) What use Biglari finds for BH’s $130 million in cash 5) S n S operating earnings that, after the investment in the franchise effort and in Maxim, go back to a normal level If 1) to 5) are successful, BH today is extremely cheap. Probably not so, if Biglari fails in one or more of those five points. Then, as I have always said, I will admit I was wrong, and will change my mind. Cheers, Gio

I wouldn't define a 15% organic growth "normal"... Most of all for VRX, which got so much accused about its lack of organic growth! ;) Cheers, Gio

Imo a good choice! ;) Cheers, Gio

I repeat: there MUST be easier things to short than VRX! ;) Cheers, Gio

Valeant Announces CFO Succession Plan And Additional Executive Appointment http://ir.valeant.com/investor-relations/news-releases/news-release-details/2015/Valeant-Announces-CFO-Succession-Plan-And-Additional-Executive-Appointment/default.aspx Gio

Valeant Pharmaceuticals Reports First Quarter 2015 Financial Results http://ir.valeant.com/investor-relations/news-releases/news-release-details/2015/Valeant-Pharmaceuticals-Reports-First-Quarter-2015-Financial-Results/default.aspx Gio 04-29-15-1Q-2015-Financial-Results-Final.pdf

That is the one thing they cannot control, but we can take advantage of! ;) Gio

Thank you for posting this one! :) Cheers, Gio

+1! ;) Gio

I don’t get this… Ackman has participated in a raising of capital made by VRX to complete the purchase of Salix… Just a few days ago... Does that look like a strategy to “create liquidity and a last pop”? Gio

+1 As I had already pointed out. ;) Gio

You are talking about the FFH stock price. I don’t talk about what a stock price will do in the future. Instead, I am talking about the billions from its bonds portfolio, its equity hedges, and its CPI-linked derivative contracts. And about the assets FFH might be able to buy with those billions. Cheers, Gio

Biglari Holdings: 2015 Annual Meeting Notes - Steak & Shake Q&A Gio biglari-holdings-2015-annual-meeting-3.pdf

I agree. Period. But I would also add that, when I buy a business, what happens from April until January of the next year is only part of the picture. And multiple expansion is only the frost on the cake. No, I don’t think either GLRE or TPRE are as well positioned as FFH. I don’t think OAK is as well positioned as FFH. I don’t think KO nor other blue chips are as well positioned as FFH. If we really end-up having deflation, it is true GLRE, TPRE, OAK, and KO will still make some money, but will most probably surprise on the downside. FFH’s business results, instead, might very well surprise on the upside. This is very important imo, not because FFH’s stock price will perform better than the rest… If I am invested in FFH today, it is precisely because I am agnostic about stock price movements… I simply don’t know how stock prices will move. Instead, it is important because FFH in that situation might come to possess the wherewithal to buy lots of greatly productive assets at bargain prices. Much more than GLRE, TPRE, OAK, and KO will be able to do. Carnegie, Rockefeller, Mellon, etc. all have become fabulously rich that way. No one knows if that will happen again. But, even if there were only very slight chances, I want to participate. Cheers, Gio

I agree Eric. The fact still remains: in today' market there is no place to hide... you might either choose to hold cash, or you might choose to buy a business which itself is holding lots of cash and is positioned to perform very well in a difficult environment. There are no bargains out there (at least that I know of!). But, if you know a business which is better positioned and more atteactively priced than FFH, I am always interested to know what you think! Cheers, Gio

frommi, I hope you are not shorting something Ackman has just made 17% of his portfolio on the assumption you know the answer to that question better than Ackman... It seems a very dangerous way to look for short candidates... Gio I'd caution you in putting too much weight into that argument (see Klarman/OCN, Cooperman/ASPS, Ackman/JCP, etc). My point is very simple: Pearson and Ackman are probably working right now on some deal that will make VRX stock pop 15-20%... And before we know the answer to frommi's question, they might have closed 5 to 10 similar deals, and the stock price of VRX might have doubled... Like I have said: there should be easier shorts out there! ;) Gio

In other words, I think in a frothy market there should be much easier shorts to find! ;) Gio

frommi, I hope you are not shorting something Ackman has just made 17% of his portfolio on the assumption you know the answer to that question better than Ackman... It seems a very dangerous way to look for short candidates... Gio

Basically I agree! :) Gio

--Bobby Jones From the book [amazonsearch]Crazy is a Compliment[/amazonsearch] by Linda Rottenberg, Co-founder and CEO of Endeavor. Highly recommended! :) Cheers, Gio

I am not so sure about it… If FFH only had lots of cash to use in a market correction, I would agree with you. But FFH also has equity hedges that probably will make more money than the money it would lose on its equity investments, FFH also has a bond portfolio that will probably make even more money in a difficult environment, and FFH also has CPI-linked derivative contracts that could turn-out to be great winners in a deflationary environment. Therefore, FFH will actually make more money in a difficult environment than in a muddle through environment. I think the market knows this, but it is simply expecting the muddle through scenario to be much more likely than the deflationary one. If and when conditions change, who knows what might happen to FFH’s stock price? Cheers, Gio