Parsad

Hi Ragnar, $20-23M in net profit. With modest increase in traffic going forward, they should be able to make about $5M a quarter...excluding the acquisition of Western Sizzlin and it's subs. That also excludes any profits made from all the cash he has on hand. Over the next couple of years, I think he'll be able to get it back to the previous highs in net income of $30M or so...just Steak'n Shake restaurants. Cheers!

No, I think it was completely necessary to bring capex down so drastically. The company was bleeding out each quarter before Sardar took over, and there was a distinct possibility they could run out of cash over time if things weren't done quickly. With their debt convenant tightening, they had to get the cash level up and quick while reducing debt. With so much cash in the holding company, half the debt load before he took over and about $20-23M more that will end up in the holding company in 2010, things are far different. Capex now can be added back into the business slowly as traffic and revenues continue to climb. Sardar will probably continue refranchisiing opportunistically, and that will reduce the total capex the company will require over time. Most of the future build-out costs, maintenance, etc. will be covered in new stores by franchisees, not the company. Cheers!

Bloomberg article on the use of checklists by Mohnish and Atul Gawande's book. Cheers! http://www.bloomberg.com/apps/news?pid=20601088&sid=a88b_yggIXDc

For those that have read "The Snowball", Buffett's experience as a director at Coke was most unpleasant. Fortunately, this time he's not a director and can freely say what's on his mind. Cheers!

At least they're only paying 7%! Cheers!

Looks like some of us were bang on $10 US /Share Payable Jan 26 When aren't you guys right! Many of you know the company as well as Fairfax's management...hell, some of you called the acquisition of ORH well before anyone else got wind, especially the media. I still think they were going to pay out $13 Smazz, but when they read some of your guys posts, Prem got scared and changed it to $10. ;D Cheers!

He's dead on, and you would think the Kraft board would take heed. Cheers!

Yup! Biglari's model gives the company more flexibility and a diversified stream of income, where every dollar will be reinvested within the most optimal opportunities as they present themselves. Cheers!

Indianapolis Business Journal article on Steak'n Shake. Focus of the article is on low capital expenditures and future of restaurant business. http://www.ibj.com/steak-n-shake-slashes-restaurant-spending-as-biglari-hoards-cash/PARAMS/article/15482 Of course the quote from the former SNS executive isn't flattering. I think the point the critics miss is that much of the future capital expenditures will come out of franchisee revenues as some existing company-owned stores are refranchised. Also as same store sales continue to increase, Biglari will be able to allocate a greater percentage of revenues and nominal dollars to refurbishing restaurants. The problem was that much of the past capital expenditures were spent on new restaurants, when most of that cost will now be absorbed by the new franchisees who open restaurants. Cheers!

I think one of the things that we forget about the dividend is that it is a form of compensation for many of the managers, including Prem. As most have fixed salaries, with limited bonuses and no options or stock grants, the dividend is their primary form of compensation for a job well done. While it isn't very tax-efficient, it's a much better alternative to the managers selling any stock they own. As well, for many managers, Fairfax is their largest asset outside of their home, and the dividend over time allows them to diversify a bit as the stock price continues to go up. Cheers!

I have no idea exactly how the market will do in the future, but I think the next decade will be fine as we've experienced a decade with no gain. Expect more modest growth and corporate profits though. Cheers!

I think they'll almost double the dividend this year...probably $13-15/share and about a 3.25-3.5% yield. They've got some pretty regular income now from their muni portfolio and dividend paying stocks. They've got ample cash, everything is in-house and now 100%-owned, and they've got no run-off expenses going forward. They'll also probably dividend up excess surplus from ORH on an annual basis, and they're listing costs for Northbridge and Odyssey have been eliminated. I'm guessing G&A going forward will be a little less also, since they have lower legal costs from the SEC business being resolved. Cheers!

Article by Whitney Tilson and John Heins. As I've said before, I don't think we will see hyperinflation. I think once the stimulus is removed at some point, things will be precarious and subdued...stagflation is more likely...elevated inflation with slow growth. We have all the hallmarks - elevated oil and commodity prices, fragile economy, high unemployment, protectionist behavior, government printing money...it's a "damned if you do, damned if you don't" scenario for any administration. Cheers! http://www.washingtonpost.com/wp-dyn/content/article/2009/12/31/AR2009123103282_pf.html

This is getting interesting! Cheers!

Curtis Jensen, Marty Whitman's protege, will take over the helm at Third Avenue. Cheers! http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=OBR&data-ipsquote-timestamp=20100104&id=10953858

Good Bloomberg article on the last decade in U.S. equities. Cheers! http://www.bloomberg.com/apps/news?pid=20601087&sid=azRby9JhxPH0&pos=1

I would say that the other call up there for "call of the decade", should be Buffett & Munger's warnings on derivatives as early as 2002. Cheers!

Apparently, Goldman Sachs call to buy BRIC economies was the call of the decade, but I would put either Prem's or Paulsen's call on the mortgage industry the call of the decade. Cheers! http://www.bloomberg.com/apps/news?pid=20601109&sid=adQVT5VaMAiE&pos=15

And those investments helped the John Wood's ministry: http://johnwoodsministries.org/ Yikes! Cheers!

Oh, here we go...found their own description of these investments: http://www.lifepartnersinc.com/about/community.html Cheers!

LOL! You're effing kidding me! Wow...red flag galore. Cheers!

I have no interest in this company, but Harry's question intrigued me. I can't find any real disclosure for "Artifacts/Other" going back as far as 2003. Back in 2003, it was only valued at $87K, but today it's $871K! What do they have back there Harry? I tried calling Investor Relations but the office is closed for the holidays. Do they have troy ounces of gold, or a lock of Elvis' hair? Or is this a mysterious asset that doesn't really exist? Cheers!

Hi Harry, Are you talking about their recently formed Life Settlement LP that they are offering as an exempt security to the general public? That they are attempting to add the LP as an alternative investment class to equities, bonds or commodities? Cheers!

Possibly, but I'd put my money on them going to trial. I don't think this is just an attempt at a moral victory for Prem...it's all about reputation, and he will want alot of what happened to go on the record and be out in the public. Cheers!

Story about Eric Sprott, who continues to remain extremely bearish...certainly far more than myself. ;D Cheers! http://www.bloomberg.com/apps/news?pid=20601087&sid=aa85k1XdhVlg&pos=5