giofranchi

shalab, if applied to Mr. Biglari, that is not heretical… it is just unrealistic. And to be realistic is all that truly matters in investing… Mr. Biglari somehow arises strong feelings… whenever Mr. Biglari is concerned, most people fail to be realistic… That’s why my agenda is to take the evidence as it comes: when results (measured in BVPS growth) deteriorate, I will start questioning Mr. Biglari’s conduct and business acumen… until then I will let the numbers speak for themselves. Gio

I have bought more yesterday at $409. Gio

Hoisington Investment Management – Quarterly Review and Outlook, Second Quarter 2014 http://d21uq3hx4esec9.cloudfront.net/uploads/pdf/OTB_Jul_15_2014.pdf Gio

Yeah! Sure… We all could be dead by tomorrow morning… Anyway, we just do not plan our lives that way! Enjoy his money?! Well, I surely don’t know his “tastes”… But I guess “normal” people (with at least some resemble of “inner score card” balance…) might come to enjoy $40 - $60 million (depending of the size and length of the yacht they want to buy…)… Certainly, you don’t “enjoy” hundreds of millions! I had understood Mr. Roberts is borrowing to get ready to expand if and when another credit crunch might come our way… Instead, is he really borrowing to buy back shares?? Thank you, ItsAValueTrap, because CACC is a very interesting company. Now I will read Mr. Roberts’ letters to shareholders very carefully. :) Gio

Maybe… It doesn’t change the fact I think we should be doing what these “statistics” seem to suggest! Even if we won't get rich! ;) Cheers, Gio

Btw, why do I think I am able to predict future growth for the businesses I invest in? Edwin Lefevre, Reminiscences of a Stock Operator The businesses I invest in generate safe and steady free cash that is used by their owner/manager to buy new assets, either outright or through the stock market. It is by their ability to use free cash intelligently that I predict future growth… because neither the game nor human nature change. Instead, I almost never count on growth coming from operating earnings… That would be too difficult for me to predict… And it is exactly the difficulty I find right now in trying to value CACC. Gio

Just the billionaires. ;) ;) Gio

http://glennchan.wordpress.com/2014/07/14/cacc-a-wonderful-business-buying-back-its-shares/ Very good write-up by ItsAValueTrap. There are 3 things, tough, that I don’t understand: 1) Why is Mr. Don Foss selling? You suggest he is old… but actually he is 70… he might still have 20 years in front of him! And human life is getting longer and longer… I just don’t see he is selling because of age… 2) Valuation: you say it deserves an higher multiple, because it has enjoyed high growth. But you also say that in 2012 and 2013 CACC was able to grow modestly, and showed a drop in volume per dealer… So, how do you judge CACC’s prospects for future growth? Are they as bright as in the past? Or are they somehow deteriorating? 3) If you think future growth will be quite similar to past growth, why did Mr. Don Foss say CACC ran into trouble because there are no barriers to entry? Are there barriers to entry? If not, how can future growth be predicted? Thank you, Gio

http://www.visualcapitalist.com/habits-wealthiest-people/ Gio

2013 Letter to Shareholders: http://www.dundeecorp.com/pdf/2013-Annual-Report.pdf Page 8 Gio

Of course that's the case. I figured there was some connection and saw that too. It's interesting how Buffett's favorite business book of all time is one he's never mentioned before. It's not like he's never mentioned favorite books before or isn't talking non-stop. My guess is the book is coming out, someone somehow reached out to Buffett (and Gates through him) and said "Warren, remember John Brooks? He always loved you. Really loved you. No, it's not the John Brooks who runs the deli you like. Yeah, it's the John Brooks who was a writer. Well, we're re-releasing one of his old books and a blurb from you would really have made him feel good. He always spoke and wrote highly of you. If you could say something nice about this book that you read once over 40 years ago that would be appreciated." I have bought it nonetheless… Just like Mr. Buffett joked one time: “there might be some truth about that rumor after all!” ;D ;D ;D Gio

Yeah! Definitely! So… let’s just say shorting isn’t my style either! ;) Btw, quotes imo are “condensed and clear lessons”… there is nothing wrong with quoting… it is just the validity of the message that must be assessed each time. Or let's put it this way: there is nothing wrong with quoting... the only problem is when stupid things get quoted! ;D ;D Gio

Yeah! Very well said! I agree 100%. Gio

Ah! Sorry!… I just meant that, given the low esteem Mr. Biglari enjoys here, probably most board members don’t care much about a reading suggestion of his! Gio

$10,000 turned into $8 million after 55 years equate to a CAGR of 13%. Great! ;) Having started almost at the top of the 1920s bull market, and having invested through the whole Great Depression… make such a track record truly an outlier! If we also think that track record ends in 1983… practically at the beginning of the most spectacular stock bull market in history… I guess we all should look at Mr. Carret’s achievements almost in disbelief… Gio

I have kept my two baskets of shorts, though I have not added to them. Instead, I am gradually increasing cash. Gio

I don’t like the retail business in general… imo it is too much subject to changes… changes that I cannot foresee… That’s why I have always stayed away from SHLD too. This being said, BBBY is still run by its very capable founder. And anyone cannot but admire his great business accomplishments. Let’s just say it is exactly the sort of entrepreneur I would like to partner with… in a business too uncertain for my tastes. And the reason I run such a concentrated portfolio is mostly because I require both things: 1) a great entrepreneur to partner with, and 2) a predictable business. Gio

"Poverty Matters for Capitalists" by Mr. Charles Gave Gio

Well, I guess you might ask: who should really be supposed to care??!!… Anyway, this book was recommended also by Mr. Biglari during the last AM of BH. ;) I haven’t read it yet, but it definitely is at the top of my reading list. Gio

No, sorry! I have not. But I have read “The Art of Speculation” is a collection of financial articles he wrote. Instead “A Money Mind At 90” is an autobiography. Gio

I am reading [amazonsearch]A Money Mind At Ninety[/amazonsearch] --Wikipedia 1) "the best long term investment record of anyone I know" said by Warren Buffett 2) He lived to be 102 3) The marriage with his wife lasted for 63 years (until she passed away) I guess we all could learn a thing or two reading the story of his life! ;) Cheers, Gio

Don’t get misled… That formula is nothing but a discounted valuation… Mr. Penman’s simple, yet imo interesting idea is to apply a discounted valuation to equity, instead of cash flow… That’s it! A discounted valuation to understand how valuable a business actually is, that: 1) creates value, in other words that grows at a higher rate than its cost of capital; 2) should be valued on balance sheet metrics (some multiple of its BV or NAV). Which multiple of BV or NAV best approximates FV? Mr. Penman’s formula provides the clearest answer that I know of! ;) Gio

I agree: if what you are interested in are basically profitable net-nets, the book won’t add much value… the only question you must answer is why a business that’s profitable is selling for less then the value of its net current assets… unfortunately, I think the answer to that question each time is a different one, and each net-net is a case of its own… therefore, I guess no book will be of much help! Now that you made me think about it, I have realized that, although Mr. Penman warns against the perils of relying too much on future growth, probably the greatest usefulness of the book lies in the following: to provide an understanding of how much valuable truly is a business that will grow. ;) Gio

writser, on the contrary I think Mr. Penman’s book is exactly right for the kind of investments you and Nate look for! Mr. Penman warns very clearly about the danger of assuming growth too far into the future, and shows how to use his formula for calculating the present value of equity disregarding future growth. Therefore, that’s exactly right for the kind of investments that suits you the best. Of course, I never look for those investments. Instead, I want something that will grow. That’s why I had to “adapt” Mr. Penman’s formula to my way of investing. But basically I think it would be much easier for you to use Mr. Penman’s formula than it is for me! ;) This being said, I agree the book is not a manual on how to read financial statements, or how to detect aggressive accounting… Gio

Not sure… But I guess LMCA on July 24 will drop…? I admit this is not easy to follow… Though I believe at the end of the spin-off we will be left with more money than at the beginning… It has almost always worked out that way! ;D Gio