Parsad

I'm not sure how this scenario would be that different than what David Sokol was doing at Berkshire before Buffett parted ways under the guise that this was unethical behavior with Lubrizol. That being said, it's probably best to wait for any comment from Buffett regarding the investment before jumping to any conclusions. This may be capital that the double T's (Todd and Ted) are managing and the decision is independent...again, not sure how this would be any different than the Lubrizol issue. I'm sure Buffett will comment shortly. Cheers!

What do you imagine would happen if Seritage went under and Berkshire owned the equity or debt? This way, Berkshire gets a good rate on the loan, and a small possibility it ends up as one of the largest creditors in a bankruptcy. Buffett knows those properties are worth three times what they are carried for. Chances are slim that anything goes wrong with Seritage, but just in case...Cheers!

It's a temporary blip...they are saying that higher security spending will decrease net margins...revenues will still be growing quite rapidly. Within two years, margins will rebound as they probably won't be spending as much on security upgrades. Of the FAANG stocks, Apple and Facebook are the only ones trading at a reasonable price. Cheers!

Time for an activist. LOL Ackman! :P Cheers!

I'm quite sure that the monetization of CoBF comes in the form of robust discussions, both public and private, which enrich Sanjeev and all of us. To paraphrase an earlier idea you posted, "make your platform (self) valuable to others and it (you) will become valuable." The universe feeds altruism (mostly...) That's quite correct! The board has added tremendous value to my life...not in investment ideas (because I'm looking for stuff that you guys generally aren't) or ad revenue (I've never spent much time trying to grow it...in fact it has been stagnant for about 4 years). The value has come from knowing all of you, the friendships, the conversations, the perspectives (including Cardboard's political views) and the richness all of that adds to our day to day existence as investment nerds! Cheers!

Very sad indeed! I know Mohnish also categorized Sergio as one of the best CEO's in history.

+1! Well wishes and a speedy recovery!

I dont think anyone is demonizing the russian people. It's the institutions and government that people are complaining about that allow those friends of ths government to become billionaires through no talent of their own. But that happens everywhere...no one complains about the same thing in China, India, U.S., U.K., Germany, etc. Alot of people around the world are billionaires with no talent of their own...some even become President of the most powerful nation on the planet! ;D Cheers!

Not the most boring, but the least enjoyable. Why? Because you feel bad about yourself that you are jealous and it doesn't make you feel any better like gluttony or adultery...at least there is some pleasurable aspect in virtually every other sin. But jealously...you lose both ways! Cheers!

He was shorting to maintain a neutral position on attained stock that was issued to him (probably stock reinvestment dividends)...he incurred zero profits or losses. I would prefer if Ross put everything into a blind trust, but this is probably the best we could hope for when the President not only doesn't put his business operations in a blind trust, but continues to manage them while in office. Truly a conflict of interest, but the ass doesn't care what he does or how it looks. Cheers!

Just a heads up...the old LUK and JEF threads have now been merged into this thread. Cheers!

Hi Liberty, You are actually probably correct. I think part of the reason is that as people do well in their own lives, they lose a bit of humility and their egos tend to become somewhat enlarged. I have to say, that I'm actually more impressed by my mentors as I'm aging. The reason being isn't so much in what they have accomplished, but how they did it and how they continue to fight or persevere no matter how much the winds might blow against them. Warren Buffett - He continues to do things at his age that simply cannot be duplicated by the vast population of his followers...first you have to live as long as him...second you have to be as damn consistent...and lastly, you have to be as good! Charlie Munger - What is there to say...like Popeye, "I ams what I ams!" Title of "the most interesting man in the world" actually belongs to Munger, not the "Dos Equis" guy! Prem Watsa - Here goes the only man I know whose ego truly disappears every time he makes a deal. Accolades go to everyone except himself! And any philanthropic work he does...just please don't talk about it or mention his name. One of the best leaders I have ever seen. Mohnish Pabrai - Every time someone tells him how badly he sucks, he goes and hits a homerun. Ego is very un-Prem-like, but talent and smarts is all there. One of the few people who will actually say when he sucks wind...but pursues every day trying to make himself better and better. Francis Chou - About the only person I know, that could out humble Prem! Continues to do what he does every day...builds wealth for others and himself...and never forgets who he is and how he got there. I can't say I'm less amazed by these guys today. I know alot more, and have hit a few homeruns myself, but their consistency, longevity and humility, as well as their insights...continue to astound me! Cheers!

Agree. They should not have encountered this issue in the first place. But the fact that they could make the repair over the air through a software upgrade...pretty amazing! Cheers!

On any other day, this would not be a noteworthy article...Consumer Reports recommends the Tesla 3. A week ago, CR found that the brakes on the Tesla 3 were underperforming so badly, that they could not recommend the car. Then Elon Musk had his Tesla team update the software remotely for the antilock braking system, and the brakes performed so much better that CR now recommends the Tesla 3. They not only upgraded the brakes remotely, but a number of other things including touch controls, etc. Nothing new for Tesla owners, but light years ahead of everyone else! Cheers! https://finance.yahoo.com/news/tesla-model-3-gets-cr-recommendation-braking-160939098.html

+1! A decent New York strip cooked properly is as good as the best Wagyu or Kobe beef I've had. The funny thing is, the best chefs in the world do not eat the dishes they dream up daily. They actually prefer to eat more simple food, and they cook more simple food at home. Cheers!

Depends on what you perceive as "best"? Best at creating artistic dishes that entice the palate...then perhaps. I've been to plenty of high-end restaurants, and plenty of "hole-in-the-wall" restaurants...and I have to say that many of the quality "hole-in-the-wall" restaurants have more robust flavours that the "high-end" restaurants can only aspire to create. Then there are those people who simply want what they like and want it cooked the same each time. If you've ever been to Gorat's, you aren't going to walk away thinking "wow, that was the best restaurant I've ever been too, where the food was terrific and the service wonderful!" But that's how Warren Buffett feels every time he walks out. And then if you are like me, and walk out of a high-end restaurant still hungry after spending $300-$400 on dinner for two people...well you know that "best" doesn't necessarily mean "best!" Five Guys anyone? Cheers!

Actually, I think most professional money managers on here will agree, and I'm happy to put in writing if you need me to Eric...75% of the time is spent on client-related, administrative duties, accounting, legal, audit, letters, etc. The 25% of time spent on the portfolio is time that is highly flexible...you can do it anytime, including when the wife and kids are asleep, at school or occupied. For me, 90% of it is done when everyone is asleep. And in your case, you were not a professional. You were a private investor, occupying time socializing when on the message board, and then making large, very extreme bets on a handful of occasions. It's as far-removed from a professional investor as you could get. Cheers!

Yup, stupid proposal. That being said, it's being proposed for by a "cross-border council", and not by any specific party. Cheers!

Hey you can have it both ways...doesn't have to be just one specific way: - I like Omaha, but I'm pretty sure I'd enjoy the French Riviera or Monaco too - I like going for a ride on a Yacht...but I'd never pay for one - I love posh hotels...not because they are posh...but because I can get a good night's sleep...and I stayed in some pretty shitty hotels when I used to go to Omaha and didn't have much money. Has anyone stayed at the Red Lion on 72nd during a Tornado storm with sirens blaring and the front desk saying "You should be ok in your room!" - Supermodels...who would say no...but I'm perfectly fine with models too! ;D - I like cigars and I like $3 Egg McMuffins! Caviar is yummy too, especially with champagne, but I prefer when it's free! Cheers!

Please add the name of the company after the ticket symbol when starting a new thread. I've done it for you on this thread and another one. Thanks very much! Sanjeev

You may be right, Parsad, but you have much more confidence in Sardar to establish his name as a luxury brand and avoid value eroding decisions than I do. Sardar certainly agrees with you that he is establishing a luxury brand built around his name. The parallels to Trump are obvious but I do not think it is certain that Sardar will be able to walk out on the other side of all of these controversies with a strong in-tact brand the way that Trump has in certain ways. When you have as many issues as Sardar has with people - vendors, suppliers, employees, personal conflicts - and you have nearly all of your shareholders upset, and you are on-the-edge of legality with respect to corporate and securities laws - I think there is a chance that this catches up with him. At a minimum, I think it will be hard for Sardar to execute transactions because even a basic amount of due diligence reveals many, uh, interesting things about him that may repel people who love their company from selling it to him. Donald Trump is an interesting analogy - because he has moved from one controversy to another for 40 years and has stiffed vendors, betrayed his wives, bankrupted entities, screwed employees, disappointed business partners and yet he still has this brand that represents luxury to many people. This is the great enigma of Trump (or one of them) and I'm not sure I have a quick explanation for it - but suffice it to say that I don't think this same path will work for most entrepreneurs that take it - or maybe even any other entrepreneurs that try to take it. Sardar is certainly trying to develop a Trump like brand with his name - but if a word becomes infamous enough - it can be hard to shake the negative connotations. Enron comes to mind. Imagine starting an investment business and going to your board and saying, "I want to call it Enron Partners." And the fundamental financial reality is that most of Sardar's wealth is tied up with BH shares - and especially since the company has spent $350 million or whatever it is now - buying shares back over the last three years magnifying Sardar's exposure to BH and Steak n Shake, and with Steak n Shake's troubles - it is not clear even on a purely financial front that he can continue to live this life - unless he allocates capital well going forward. So if you think that are no or few risks to Sardar's brand/lifestyle, then that implies that you believe he will invest well in the coming years. I would guess that many people on this board doubt that the guy who in the last five years bought Maxim magazine (BH , CCA Industries, Insignia Systems and Valeant stock - on which he lost $40-plus million (Maxim), a significant percentage of his investment (CCA), and many millions of dollars on Insignia and Valeant - anyway, I would guess that many people would doubt the capital allocator who made those decisions ability to avoid significant capital-losses in the future. I'm guessing you didn't catch the notes of sarcasm in my post...or my posts over the last 7 years! ;D If I was betting on massive success or egotistical implosion, my bet has always been on the latter. But I've been wrong so far, so don't bet on that opinion! Cheers!

If any investment manager is touting his or her fabulous returns without mentioning the margin risk he or she took as a fiduciary of his or her clients or is not comparing him/herself to what the index would've done with the same level of margin, I think people should definitely raise an eyebrow. Showing great returns with margin is really easy. But it doesn't make it smart. I'm not opposed to leverage. For example, generally speaking most of what a PE investor is paying for is not for the investment genius of the manager but for the cost of capital arbitrage a PE Firm is able to procure, vs. its investors themselves. Hedge funds have an even lower cost of arbitrage, but its far far riskier because of how quickly it can get called back at the worst time. You said that this wasn't directed at any manager in particular...noted. I thought I would just clear up the leverage Arlington used on that Berkshire bet...remember, BRKA stock was trading at about $92K when that bet was made and intrinsic value by Allan was calculated at about $190K per A share. He took a 50% leverage position and clearly explained it to all partners in his annual report. He also indicated it was the first time the fund had used leverage, but the upside was very high and the downside reflected fully in the price. Now going back to your comments on leverage...IB allows 5-1 leverage? If so, that's nuts and I think most investors would still have a losing record doing that, because if they are wrong for any prolonged period, the losses would start to hammer them psychologically. In fact, I think the average investor using leverage would do worse than the average investor not using leverage...and that's because the average investor is average both analytically and psychologically. Cheers!

I've been thinking about this some, as I know some people invested with Arlington, and they've been spooked by this. I certainly don't think Arlington is a fraud, but how might one convince yourself that it's definitely not? That is, is there anything that would provide definitive proof? -M Was that not the year Berkshire made a huge run...and at one point Berkshire made up 50% of the fund, plus they used margin to lever up on that bet? Any investor can get a copy of the audited financials when they invest capital. Other than the Berkshire bet, Allan has not really used margin or significant leverage. Lending stock to shorts or using options is a pretty common practice...so I'm not sure why investors would be concerned about that. They've been fairly transparent about how they invest, and you can view his 13-F's online to get a pretty good idea when he is adding or selling and roughly what prices he is buying/selling at. I met Allan in Omaha back in like 2006 or something. We were the only two guys sitting at the bar in the Omaha Marriott, across the street from Borsheim's, and watching the hockey playoffs. His personality strikes me more as Francis Chou than anyone else. He's quiet, likes a low profile and doesn't care about the limelight at all. He just likes doing his own thing and letting Ben handle the marketing, day to day stuff. He just likes picking stocks, reading and doing his analysis on ideas. He was stuck around $26M then, had a terrific record after 8-9 years...then as word got out and a couple of articles were written, along with great results, assets ballooned. When you get bigger, you draw more attention...and when you outperform your peers, you draw even more attention. Not sure what type of comfort people would need...but it doesn't really matter one iota unless you are investing with him. And if you are, you should be doing your own due diligence such as asking for and reading the audited financials with annual letter, and even calling his auditor and asking questions to get comfort. I don't think they would regret any investor from doing such due diligence...in fact, they probably are looking for more long-term investors with such a mentality. Anyway, I believe their fund is closed at the moment...correct me if I'm wrong. Cheers!

A number of people have told me that there is a picture of Biglari Cafe in an issue of Maxim magazine that came out today apparently. That is purely a coincidence and I haven't seen the pictures in the magazine yet but maybe he will start promoting the cafe in Maxim. I would much rather hang out in a Steak'n Shake, than Biglari Cafe. Steak'n Shake is such a terrific business...it should be making $40-50M net profit each year right now. How many high end cafes can be franchised and rolled out...this is not a Starbucks. It's a passion project...the way life should be lived in a Biglari world! And what he's really trying to do is create the brand...think Trump, who somehow became President...the brand is very powerful and is difficult to damage once established. People will forget his behavior or they will ignore it completely...I think most would argue that the Trump brand is stronger today, even with the chaos that rules the Trump Presidency and family. Biglari could be the next Trump brand 20-30 years from now. Cheers!

Below are some highlights from the article/interview I referenced in my other post about Biglari Cafe. Again, I should mention that I cannot at all guarantee the accuracy of the translation and I'm not even completely sure which French publication first published this story - it seems that it was published in a few places. Anyway, enjoy reading about Sardar Biglari's side project "Biglari Cafe" and its fine caviar (that is, if the translation is correct about the caviar). There's actually alot of pictures on Google "images" if you type "Biglari Cafe". Kudos to Sardar! He's done everything he's set out to do...can we really blame him at this point? Everything was completely legal, obvious and shareholders informed as it occurred. I'm beyond feeling sorry for shareholders at this point, because they were as complicit as anyone in what happened. We made plenty of money in the early days of Western Sizzlin and Steak'n Shake, and were smart enough to get out and invest elsewhere. And we don't want anything to do with Biglari Holdings. But he's doing everything he set out to do...not unlike many other centi-millionaires...and now he's not beholden to anyone ever again unless he screws up with too much leverage or runs it into the ground. He's living the life he always imagined and worked hard for...not everyone's cup of tea...but that's what he likes and enjoys. Who knows what will happen...BH may be massive 20 years from now...or it may not exist! Who knows...who cares! Cheers!