giofranchi

Yeah! But the threat the internet poses is not the same? I mean that content creators won’t need distributors anymore? Gio

The publication of The Bootleg Series Vol.11 a few days ago is an event to celebrate and to flavor by all lovers of popular music and all lovers of culture in general. One of the most influential and deep thinker of last century at his very best. Not to be missed! :) Cheers, Gio

Thank you for this! Very useful! :) Gio

Interesting. Could you please elaborate a bit further? I remember Charlie Ergen saying in an interview some time ago that he liked his business now, but it was not where he wanted to be in the future… If cable is such a safe proposition, what do you think Ergen was meaning? Thank you, Gio

I have read the latest discussion about a swap from LMCA shares to SIRI shares with great interest. Yet, I would also like to know what board members think about LMCA vs. LBRDA. Would you sell LBRDA, after exercising the rights offering, to buy more LMCA? Or, vice versa, would you sell LMCA to buy more LBRDA? Or would you hold both and do nothing? Yesterday I talked to a friend of mine who is worried about the future of cable, because of the obvious threat the internet poses… maybe not immediately, but surely in a few years… LMCA seems to me a vehicle less tied to a specific technology than LBRDA: SIRI is satellite radio and has nothing to with cable. After the SIRI investment will have played itself out like Malone has in mind, he will move on to something new like he has always done… And he will choose the technology most promising at that specific period of time in the future. LBRDA, instead, seems univocally tied to cable… If every content creator starts distributing its stuff independently through the internet, cable is bound to slowly decline, isn’t it? Malone is 73, and my only plan / hope is to stay in his company for the next 10 years. To do so, what would you choose? LMCA? LBRDA? Or both? And why? Thank you! :) Gio

No, Biglari will be compensated based on the growth in BVPS due solely to operating earnings, The Lion Fund compensation instead will be based solely upon investment results. What I don’t know is how much The Lion Fund will be paid… Gio

I agree. That would be a problem. But Biglari has talked repeatedly about his strategy to enhance the franchise business, in the US and abroad! Therefore, if his relentlessness about cutting costs is pushing things too far, and risks marring the franchise business in which Biglari has invested a lot in recent years (at the expense of reported earnings! And therefore at the expense of BVPS growth… and therefore at the expense of his own bonus!)… I think, or at least I hope, sooner or later he will take notice and change accordingly. We will see! Gio

Yeah! This is one side of the coin… The other side follows: the yield of 10-years US Treasuries will fall to the France level, if not the German level, if not the Japanese level, giving Fairfax substantial capital gains. If that happens, it will be surely accompanied by lots of distressed debt situations. And Fairfax will redeploy its capital gains into those distressed debt opportunities. In the meantime also stock prices could have come down and equity hedges will no more be in place. Which side of the coin will happen? I think no one knows. Gio

I generally agree with your perspective Eric (7% investment returns is not a low bar - it's hard) Well, I have never said 7% on their portfolio is easy, nor I said it is difficult… The truth imo is no one knows… Because I believe they are opportunistic and constantly on the lookout for something undervalued… How to predict they will find undervalued things from now on? I don’t think anyone can. Instead, I just said that 7% is far below the historic average return on their portfolio (9%). That’s all I have said! Now, of course, you might accuse me I invest with a rearview mirror… ;) Gio

I don’t know… But I guess we will soon find out: in December the 2014AL will be released, and there is no denying 2014 has been a year in which BVPS has essentially stagnated… It will be interesting to read Biglari’s comments over the 2014 poor performance! ;) Gio

I can only say I don’t invest basing my judgment on gossip… If it is gossip I am interested in, I buy MAXIM… ;D Btw, those are the very same things employees say about Pearson at VRX or about 3G whenever they put their hands on a new company! The very same things they used to say about Malone too... A businessman who is relentless in cutting costs will always be bound to attract much criticism… and even hate!... there is no getting around this inevitable truth! Anyway, ask Buffett what he thinks about Lemann’s business acumen… or ask Ubben what he thinks about Pearson’s business acumen… ;) Gio

Yes, definitely! ;) Gio

Way too kind! Thank you very much! :) Gio

Being this board essentially about stock market investments, I meant I have doubled my capital for the first time since the stock market investments of my firm truly started to matter. How I went from 25k Euros to 1 million Euro is another story, one mostly of very good luck (and perhaps of a bit of hard work and dedication on my part too…). Cheers, Gio

Mmm… I have never really counted the hours I devote to supervising the team of people who help me running the businesses vs. the hours I spend thinking about my investments… But I guess it cannot be too far from the truth if I say 50-50… In the first half of my time I would also put the work I devote on taking strategic decisions for my businesses. It depends… the most of the buying I do is in companies I already own! So, very little time required there… I just look at the price! ;) New investments are rarer, and therefore might take longer… But if I find what I like and look for, I initiate a relatively small position very soon, with the hope of getting the chance of averaging down in the future. Gio

Not now. I sold out to raise capital for the BH rights offering and the LBRDA spin-off and rights offering. As right now I don’t want to decrease significantly the percentage of cash I hold. I surely plan to buy it back later. ;) Gio

Not at all... Our family real estate holdings have nothing to do with my firm, nor its equity, nor how it has grown over the last 4 years... Gio

Exactly! ;) Gio

frommi, I think you are right, but a company has ways to defer the payment of taxes an individual doesn’t enjoy. That’s basically why I prefer this solution to distribution of earnings via income. Gio

Thank you, Phil! I keep following Altius with great interest. And I liked Dalton’s latest letter to shareholders. If the Liberty Broadband spin-off pays off, I will probably cash in some gains and reinvest the proceeds in Altius. We will see. ;) Gio

Thank you Packer! Let’s just hope I won’t find a way to screw things up!! ;D Gio

My parents are still involved in 2), my sister runs her own medical clinic! :) Actually, I have a third company through which I gather all the earnings of 1) and 2) and invest them in the stock market. I think this solution is very tax efficient. Surely much more efficient than if I were to take out earnings as an individual via income. Gio

You may find the websites of both just below my avatar! :) 1) Civil Engineering Services: www.agenziamilanostrutture.it 2) For Profit Higher Education: www.masterpesenti.polimi.it Cheers, Gio

No… Thinking about it, I really don’t know why I am out of VRX… In retrospect I think it will prove to be a very dumb decision… I have sold it because of its debt level and because I think there is not yet evidence enough the organic growth of the companies Pearson acquires keeps being strong enough, after the acquisition and the changes implemented by Pearson and his team. A high debt level without a crystal clear track record is something I am not comfortable with… But, again, I sincerely think I am making a mistake here. Gio

I have at least doubled the capital invested in VRX, ENDP, and Third Point Offshore. I have made a lot of money with LMCA and OAK. I also have more than 150k Euros of capital gains in Fairfax, with 30k Euros more received as dividends. I have made some money with GLRE. Most of all I have lost practically no money (with the only exception of LRE, which took me by surprise…). My portfolio today: 33% Fairfax, 15% LMCA + LBRDA 15% BH (way undervalued imo!) 9% GLRE 28% very short term US treasuries Gio