Parsad

The son of one of our partners in the MPIC Funds has earned a full scholarship to UCLA. He's a terrific. intelligent, young man named Zach Kiefer. He's also a value investor, and he and his father Carl were my guests at the Pabrai Funds AGM last year. Wow, what a start this kid has to his life. The stuff he will know at his age, I can only wish I had known! The Kiefer's also have a wonderful daughter named Alexandra who is a competitive swimmer. Great kids! Congratulations to Zach and the whole Kiefer clan! Cheers! http://www.simivalleyacorn.com/news/2009/0710/schools/041.html

Cereberus said that they still will not let investors out of their fund. Cheers! http://www.cnbc.com/id/31831437

Here was the old clip from his upcoming movie about his life. Phhhhhppphtttt! Cheers!

Commentary by Patrick Byrne on the Dendreon story. Cheers! http://finance.yahoo.com/news/Overstockcom-Comments-on-prnews-3022803841.html?x=0&.v=1

A $300M fund company from Canada won the lunch last week. Cheers! http://www.reuters.com/article/marketsNews/idCAN0838940520090708?rpc=44

John Meriwether, who ran LTCM into the ground, is closing his latest hedge fund due to losses. Wow, only 15-1 leverage this time and it didn't work as well! ::) Cheers! http://www.bloomberg.com/apps/news?pid=20601087&sid=a5QBxVSIpVuA

I agree Packer. I think he's a very good researcher, but not so good when it comes to the practical application of his research. Cheers!

They are a comparison with the same fiscal quarter of the previous year....and that's important here. These comps are against a period when the business was in free fall and so by definition the Q in 2008 as a benchmark is an "easy comp" as they say. I think that is a bit of a cop-out...no offense. The fact that same store sales increased, as well as customer traffic during the quarter, regardless of whether the business was in freefall or not is the relevant point. I think the same argument was used last quarter...that it was an easy comparison. This is what SNS reported in the 2nd Q of 2008: Fiscal Second Quarter 2008 Results Total revenues for the fiscal 2008 second quarter decreased 5.8% to $190.5 million compared to $202.2 million in the comparable period last year. During the second quarter, same store sales declined by 6.3% versus a decline of 9.5% in the first quarter. This is what you quoted from the 3rd Q 2008: "Net sales decreased 6.2% from $152,700 to $143,303 in the current quarter primarily due to the decline in same store sales. Same store sales decreased 5.8% due to a decline in guest traffic of 8.5%". Which is worse? Same store sales had declined more in 2nd Q 2008 compared to 3rd Q 2008. Steak'n Shake only improved their same store sales by 2.4% and customer traffic by 7.8% in the 2nd Q 2009 compared to 2nd Q 2008. This quarter they've increased same store sales by 5.0% and customer traffic by 13.4%! Extraordinary anyway you slice it! So far, they've handled every concern shareholders might have had regarding improvement of store operations. The argument last October was that it was unlikely that Steak'n Shake would be even able to meet all the new tighter covenants added by their creditors, yet it looks like they'll meet them all. Infact, I expect the company to be completely debt-free at this same time next year, simply by using excess cash flow and the disposal of some of the assets for sale. We've had less than one full year under new management and the entire operation has not only stabilized, but growth has finally returned to the business. The only concern is cash flow from the business. I'm quite certain that we are going to see a quarter that had very respectable growth in free cash flow. I watched Jim Cantalupo turn McDonald's around in a very short period...this is completely comparable to that event...the speed, the urgency, the results. Obviously, one is like turning around a supertanker, while the other is an 80-foot yacht, but Steak'n Shake was also in a far more precarious position when Biglari took over. At some point, it's ok to say that the circumstances have changed, and perhaps the outcome is different than what people originally expected. Cheers!

I sent Sardar another email: Hi Sardar, I'm guessing that those "pointed questions for the compensation committee" will be significantly less pointed at the next AGM. Superb work this quarter...absolutely superb! All the best, Sanjeev Parsad Corner Market Capital Corporation Suite 1620, Box 36 1140 West Pender Street Vancouver, BC V6E4G1 Cheers!

Hey I said: Then again, if the company is earning $5-6M per quarter again by the AGM, I don't think too many people are going to care. Most will realize how much work this turnaround really took and the amazingly short span of time he did it in. Cheers! And I don't have a problem with Sardar's salary. If the company is turning around as early progress is showing, paying him $900K a year would be a hell of a lot cheaper than any future bonuses the compensation committee could have granted him going forward. I remember when Prem added the dividend, there was a huge outcry on the MSN Board over it. That he was already getting $600K a year! Today, everyone on this board would agree that Prem Watsa is significantly underpaid, dividend or not. So, I don't have a problem with Biglari's salary, because I also agree with a previous comment that this guy is unreal. I have alot of confidence in my own investment abilities, and the MPIC Fund I, LP has blown the lights out in such a tough period for the investment industry. But the mix of investment ability, determination and entrepreneurship in Biglari is rare. Something I can only dream of! That being said, I would have preferred if the compensation committee had brought on the raise in a gradual fashion, along with improvements in the business. For example, they could have doubled his salary this year with improved numbers, and then increased it to the same level they have now set it at if next year's numbers were also improving. To spring a tripling of his salary on investors whose share price is still stuck below where Biglari himself even bought, was probably not a wise decision by the compensation committee. Let's see where the numbers are at the AGM...with this guy, if he accepts this pay package, I would think it is probably because things are improving markedly. Cheers! Those numbers are friggin' amazing. Mind-blowing actually. McDonald's hasn't reported June's numbers yet, but Steak'n Shake's same store sales are superior to McDonalds U.S. April and May sales numbers...McDonald's! I still think the optics of the salary didn't look good, and that's not entirely Sardar's fault. I put the blame primarily on the compensation committee. They are there to use their judgement to decide what is fair compensation, as well as weighing that compensation against shareholder and public opinion. They were correct on the first part, but missed on the second. Cheers!

No, I'm not talking about Madoff. In Mark Mitchell's piece on Dendreon, there was a link to a 1985 WSJ article on short-selling, which throughly discusses some of Jim Chanos strategies back then. Nothing has changed! Here is just a sampling of what Chanos was doing back then...sound familiar to Fairfax shareholders? http://www.deepcapture.com/wp-content/uploads/2009/06/Market-Hardball-Aggressive-Methods-Of-Some-Short-Sellers.pdf In recent interviews with this newspaper, Mr. Chanos referred to Coleco Industries Inc.'s management as "liars," called a recent First Executive transaction "fraudulent" and stated matter-of-factly that Integrated Resources "won't be around in five years." Because such comments usually are spoken, shorts rarely are held accountable if their exaggerations don't materialize. You really should also read about his actions around First Executive and E.F. Hutton, which were abhorently unethical. Disgusting pig of a man! Perhaps he does have two horns and spreads syphilis. Cheers!

Wow, as I mentioned that Chapter 3 is where it starts to get interesting, Chapters 4 and 5 continue to illuminate the interconnections within the web of Wall Street's powerful hedge fund managers. While the writing needs work, the details are fascinating! A while ago, I tried to challenge Sam Antar, Gary Weiss and Tracey Conen regarding their bashing articles on Overstock.com. Out of the blue, I received a friendly warning by a well-known investment manager that I should be careful. This manager was very sincere and said that these guys are very well connected. I'm starting to find out exactly who they are connected to now! Cheers! Chapter 4: http://www.deepcapture.com/michael-milken-60000-deaths-and-the-story-of-dendreon-chapter-4-of-15/ Chapter 5: http://www.deepcapture.com/michael-milken-60000-deaths-and-the-story-of-dendreon-chapter-5-of-15/ Chapter 6: http://www.deepcapture.com/michael-milken-60000-deaths-and-the-story-of-dendreon-chapter-6-of-15/ Chapter 7: http://www.deepcapture.com/michael-milken-60000-deaths-and-the-story-of-dendreon-chapter-7-of-15/ Chapter 8: http://www.deepcapture.com/michael-milken-60000-deaths-and-the-story-of-dendreon-chapter-8-of-15/

Fortune article about economist Robert Schiller...some interesting points about Shiller in it. I have a lot of respect for his research. http://money.cnn.com/2009/07/06/real_estate/robert_shiller_housing_market.fortune/index.htm?postversion=2009070710 I'm kind of flabbergasted by his comments on his company hedging all sorts of risk. Surprised that he believes he can do so, especially after how their original hedge against oil prices had to be shut down and examples we've seen of LTCM and other hedge funds. Cheers!

Here's an Indianapolis Star article on the pay raise. Cheers! http://www.indystar.com/article/20090706/BUSINESS09/907060307/1109/BUSINESS09/CEO+s+cash-only+deal+best+for+him+or+company

Is this a good contrarian indicator?? Almost certainly! Cheers!

Folks, please keep the language as clean as possible. Also, debate but don't get personal. Thanks very much! Cheers!

If you want to be one of the best, then undoubtedly you have to be able to take criticism. I think Sardar will make up his own mind on things, but he is open to criticism because he wants to be one of the best. I think there were alot of issues that people had questions about before last year's AGM, and he took the time to answer most of them. People left having a better understanding of what was happening. He'll probably address some of these issues at the AGM, if not sooner. Then we can all come to a reasonable conclusion. Cheers!

Signs seem to point to the uptick rule being brought back. Cheers! http://www.cnbc.com/id/31719408

We believed Sardar was a good and thrifty manager and it is difficult to recognize he is either very maladroit or hard on his employees, or both. Could be, but I prefer to get all the facts before jumping to any conclusions. We have not heard any of the reasoning behind the salary increase or if Sardar will even accept it. We have not heard Steak'n Shake's answer to the employee hours issue, nor if they plan on rectifying the situation if they were at fault. Which bias is it that makes people base their opinions on partial arguments, because I think that is the bias that we are currently facing? It's kind of like the media saying that Buffett has made huge bets using derivatives and suffered losses. Is that the whole story? Of course not. What the comment should be is that Buffett has made huge bets using derivatives and has suffered losses, but that those losses would only be realized if the S&P500 stayed where it is for 15-18 years. We should never base our judgement on a circumstance without having all the facts. Cheers!

I think the consistency bias is the other way actually. I think our perception of Buffett is probably held an unhealthy level. Thus in turn, we hold other executives to such a level who try and emulate his philosophy or culture...slapping their backs when they do well...then kicking them in the groin when the do something less noteworthy. Think about it...Bill Miller is suddenly out of everyone's good graces...Mohnish is now suddenly human in investor's eyes...Sardar is deemed to be a greedy wannabee...Tilson is a marketing genius who would sell his mother for publicity...the list goes on and on. Right now everyone is patting Prem on the back...yet three years ago they wanted to lynch him. I think we are completely unrealistic in what we expect of Buffett, and then in turn we are equally unrealistic when it comes to those that he has influenced. I didn't like the Snowball, and that probably had more to do with the tone of the book and how Schroeder shattered our impressions of Buffett. We all have these innocuous glowing ideas of what Buffett is like, yet the truth is he is just a human being, who went through his own challenges to get to where he is. He did many things right and he did many things wrong. Now going back to Sardar, I think he set the bar relatively high with Western Sizzlin. He didn't do anything wrong there. He didn't even take a salary. His original salary at Steak'n Shake, was also well below market value. Thus I think our expectations of him are based primarily on what he has done in the past and not what he has done relative to Buffett. Cheers!

You know this may sound crass but working at a fast food joint for 25 years for no money is not noble, its a summer job that got taken way too far. I was just reading the other day that the average Family plan costs companies north of 12,000$ a year, it is insane to think that a business can afford to provide someone with benefits equal to their entire base salary. Its the state that is failing these people, not Steak and Shake. I agree with you Oldye, but I think the matter is made much worse by the optics of the raise. I think Sardar will prove to be worth far more than the raise they gave him...in fact, many of these employees are fortunate to have jobs right now, as the business was close to going under with previous management at the helm...but the timing was wrong for the raise. And I hate curly fries! So no curly fries. Either thicker straight cut, or keep'em thin. I like Red Robin's thick wedge cuts as well! Cheers!

Let's not overreact. We don't know if this lady worked for a franchised store or company-owned. It could very well be that an overeager franchise-owner was trying to cut costs and the company is completely unaware of exactly what happened. I would say that the optics of the salary combined with the situation of this employee was exactly what I was afraid of. How out of touch is SNS' compensation committee to raise the salary like this and create a situation that puts the CEO in this light? I think it was a mistake. Not that Sardar doesn't deserve the salary for his efforts, but the timing was completely wrong for such a signifcant raise. Cheers!

I emailed Sardar. He said that the new website is temporary and that it "will get a lot better." With all the changes and new products at the restaurant level, they probably had to get a new profile up online. I'm sure the changes with the advertising companies delayed things a bit as well. But I like the focus of the new commercials and website...value for your money, and taste matters! Cheers!

Great ads! That's the best those Steakburgers have ever looked in a commercial. I really want to try one now! Smart, quick clips that focus on price, value, taste and freshness. The homepage looks great as well. I hope they update the rest of the site, or at least match the colors. Cheers!

What happens when people refuse to accept the IOU's? Will the government then step in? They are already beginning to cut services...I would imagine property taxes will go up if Prop 13 is repealed? What if they can't repeal Prop 13, as they need a two-thirds majority? Do commercial taxes go up...but businesses will relocate head offices. So many possibilities. This is not a situation I have any comfort with! Cheers!