Parsad

Hi Jordan, Are you sure about his numbers? I know that's what he says on his site, but from what I've read it seems as though he isn't a value guy, but trades alot. Also, take a look at some of the positions he held: http://www.insider-monitor.com/trader/cik1337851.html Alot them are tiny micro-caps, went bust, etc. How much leverage was he using? You also said he shorts. The one thing I've found out over the last few years is that you really have to investigate how returns were earned by alot of managers. Do you have any details on his annual results? Cheers!

Globe & Mail article on Canadian CEO's who did not receive a bonus last year. Guess which favourite CEO's picture is on top of the article...Prem! Cheers! http://www.theglobeandmail.com/report-on-business/managing/executive-compensation-2009/canadian-ceos-who-received-no-bonuses-last-year/article1580274/

Buffett will be a witness at the bi-partisian panel examining the financial crisis that was put together by Congress. Cheers! http://www.cnbc.com/id/37365020

Yes, I think the links were broken. Here is the interview, plus the associated files related to comments he makes in the interview. Enjoy! Cheers!

Yeah, they usually send you an 80% off promo code in your email each month or so. Make sure you read the fine print of each order before paying, because some restaurants are very specific on what you have to spend and they have some other restrictions on occasion. I haven't had a problem yet. I think the only thing that has gone wrong is in the early days, with the 80% off promo code, I bought a bunch of coupons at a huge discount, but only used a handful of them as they expire within a year of date of issue. Cheers!

Hey Folks, I don't know how many of you have heard of Groupon or Restaurant.com, but as value investors, I figured some of you might be interested. Groupon creates collective buying power in your specific city or area. They are in quite a few cities now, and you can save a fair amount on certain offerings they have. I've used it for restaurants primarily, but they have various merchandise as well. http://www.groupon.com/r/uu3053123 http://www.groupon.com/vancouver/deals Restaurant.com is terrific! I've used it for virtually every city I've visited in the last year and a half. You can buy $25 worth of food at various restaurants in different cities for like $10, and sometimes even $2! We used a $25 coupon that I bought for $5 at a restaurant in the Old Market area of Omaha...it was a newer, hip winebar type of restaurant. The food was really good! We had to spend $50 in food, excluding beverages, and we could use the $25 coupon. It was well worth it. http://www.restaurant.com/ Cheers!

Store count is currently around 475, to grow the store count to 2-3x would mean adding 475-950 stores. At $1.15M per location that means spending $546-$1093M to execute this expansion. They have about $75M in cash and owner earnings are $40M per year so, if they reinvested every dollar into this effort, it would take at least 12 years to grow to this size. I think you're confusing who is putting up the capital. It won't be SNS, but the franchisees that have to pay for the buildout of any new locations. SNS receives a franchise fee and a percentage of revenues going forward. In return, they pay for back-end office support, advertising, and assist with financing and leasing. Cheers!

I believe at the AGM, Sardar said they are working on a franchise unit that will cost a total of $1.15M to build out. About 33% less than present restaurants. They also announced several new franchises that would be opening soon...Las Vegas and Denver were part of them I believe. Cheers!

The compensation package has an impact on intrinsic value, but I don't see Steak'n Shake diminishing anytime soon. Sorry Tiddman, I guess I beg to disagree on this one as well. I don't know what will happen to Biglari Holdings investments, but Steak'n Shake will be significantly bigger ten years from now. Cheers!

What do you think the chance is that Sardar comes out and says 'hey guys I screwed up, now that I look at it more closely the compensation package is asking too much here is what I should have done....etc. etc.' I think this type of response would put him back on top in some of the shareholders minds, but I'm not sure it will happen. This is what I would hope he would do, but from everything I've seen and heard, I think it has a very, very slim chance of happening. Cheers!

We have turned a hero to a zero at the speed of light, on this board. It takes a lifetime of work to build a reputation and only five minutes to ruin it. From the drop in the stock price, it seems as though management's actions have everything to do with the change in sentiment. This was a failure of the board of directors. A massively delusional idea that wasn't thought through completely. The company will do fine long-term, but this leaves a bad taste in the mouths of shareholders who were there from the beginning. With no input, how are shareholders to perceive this change? With management not interested in listening to shareholders, what does this tell them? All they can do is wait and see how the vote turns out. Cheers!

Hi Mark, There were a ton of posts immediately after the compensation package announcement. We were subsequently hacked twice and lost the posts from May 2nd to May 7th. It was probably the greatest reaction we've had to any single incident on the board, including the old MSN Message Board. Basically, the compensation structure is being changed, and there is no intention of working with shareholders on this...either you agree or disagree. We chose to remove the SNS board since shareholders have no input outside of the actual vote on the proposal. Who is working exactly for whom here? Thus, we have no interest in supporting this type of behavior. Cheers!

Article on why Buffett has yet to invest in India, but is going to visit the country soon. Cheers! http://english.peopledaily.com.cn/90001/90778/90861/6997130.html

Hurdle rates are relatively common in hedge funds. Most of the time, the funds are structured in a "1 & 20" or "2 & 20" fashion...meaning a 1% management fee and a 20% incentive allocation above a fixed hurdle. There are a number of hedge funds now that operate solely on an incentive allocation above a fixed hurdle...I know of at least fifteen in the U.S. and two in Canada. I would say that about half are young managers who saw Mohnish set up his fund like the Buffett Partnership and followed suit...so they don't have much personal capital at this stage in their career. I'm not entirely sure what Sardar's personal stake in BH would be, but I'm fairly certain it is less than 1%. Cheers!

I think Jeremy Grantham said the same thing the other day...he said if he's buying gold, then he knows for sure its a bubble! :) Cheers!

As expected, BH is now earning somewhere around $5-6M a quarter net or $20-22M annually. That would be 7.3% return on equity without doing anything. Throw in a modest gain (same 7.3% after tax) on the $80M in capital available for investments and you have another $6M in earnings...or about $28M a year. That would be a 9.2% earnings yield in total. That would give Sardar a present compensation level of about $2.5-3M without doing anything significant to increase shareholder value. I would be much happier to see a hurdle of 10% and a 15% incentive allocation above the hurdle, but I don't think they would entertain such an idea. Cheers! http://finance.yahoo.com/news/Biglari-Holdings-Inc-News-prnews-364171439.html?x=0&.v=1

Who knows how much further this gold bull run can go, but if we are asking about trying to become a gold croupier, then I'm guessing we are getting relatively close to the end. I just noticed recently that Sears, yes Sears the department store, has added a gold for cash program in their jewellry department at most Sears locations. I think I told the board about three-four months ago, that a well-known payday loan/check-cashing place in Canada called "Money Mart" also added a similar service. I've seen more gold ads, services, exchanges, and public presentations offered at hotels in the last year than anytime in my life...eerily similar to the internet craze in the late 90's. I still remember when Alnesh, yes my cousin Alnesh and investment partner, told me about a company he was investing in called 360 Networks. He was asking if I wanted to invest alongside him. I said no, that I didn't know if they could make money going forward, or if they could develop any sort of edge over their competitors. He told me "Ok, don't come crying to me when I'm wiping my ass with $100 dollar bills!" I said "Ok, don't worry I won't." That was a good lesson for both of us and he's been paying attention to Buffett ever since! ;D Are we at 1997, 1998 or 1999 in the gold bubble? I don't know. I'm a value guy, so I'll probably be wrong for a long-time before I'm proven right, but we see a distinct bubble in gold...and all these value guys jumping in just makes me more and more nervous. Cheers!

Hi Mpauls, Could you please provide the livestream link info only and not connect it directly to the website. I've been informed that livestreams can often have viruses, and with all the problems the site had in the last couple of weeks, if we can avoid a problem, then we've got to try. Thanks very much! Cheers!

In the last four years, this is the largest monthly correction for the S&P500 since October 2008 (down 16.8%) and February 2009 (down 10.7%)...so far, down about 9.6% for the month. A little more and the guys on CNBC will really be shouting on Squawkbox! Cheers!

They shorted the S&P around 1062 I believe so overall they're still down slightly maybe 10-15m, I don't know what the change is since last Q but they're probably up. I don't know about that. I thought they increased the amount hedged in the last little while. Also, we bought out of the money S&P puts ahead of Fairfax and they are up close to 50%. I would think they have made some money on their hedges. Cheers!

I think it is hardly capitulation when people are still looking for ideas of what to buy on a pull back, as always. You may not see capitulation this time, or at least anything like we saw between November 2008 and February 2009. Corporate balance sheets are pretty damn good looking in most areas. Any selling we are seeing is fear about national balance sheets. That is a long-term problem that won't correct overnight...no one big enough to bail this out! I see more see-sawing than capitulation. You are going to have to be opportunistic...buy cheap or at least cheaper, and then sell as things get more expensive. If you are planning on buying and holding for several years, you better pick the right companies. I don't know about a lost decade, but I can't see markets being very buoyant over the next few years either. This whole period will be the era of Ben Graham, not the buy a great business at a fair price era. Cheers!

Any thoughts on when this may end. It seems to get worse everyday. I dont feel full capitulation though (at least not for me). Who knows? It could go on for weeks or it may end tomorrow. Just always buy things that are cheap and sell when they are dear. And if you're stuck in the middle...don't worry...there's ALWAYS another opportunity. It may be better or worse, but they always show up. Cheers!

No, we finally started buying a few things today...more signficant nibbling rather than anything else, but some things are priced a bit more reasonable. Overall, the markets are still overpriced relative to risk, and it is possible that we could see more downside. When investors start to get fearful, it takes a while for the unsophisticated to join the herd. Usually the so-called "sophisticated" are the first ones to lead the pack...they don't know what they are doing, and are prone to making decisions rapidly because they are managing alot of other people's money. They are panicking! But the unsophisticated haven't yet. But I can hear them starting to worry...and if they do, then you've got trouble. While other people will have trouble, we won't because we're damn liquid. ;D Cheers!

It's very smart...the merchandising should help strengthen the cult following. Good selection of merchandise as well. Cheers!

Proxy fights are not cheap. I would think this fight cost the committee a minimum of $250K and from the number of filings on EDGAR, I would think the cost was closer to $400-500K! If they had won, they could have recouped the cost from Denny's, but now they have to eat this. It was a tough battle from the start, since Denny's wasn't in a precarious position, whereas Steak'n Shake was. While Denny's management could have done a better job, they certainly weren't anywhere near running the company into the ground. They could always go after Steak'n Shake instead! ;D Cheers!