Parsad

I'm more concerned about these situations than I am corporate America itself. California, Michigan, Eastern Europe, Iceland...etc. Bigger systemic issues? Cheers! http://www.cnbc.com/id/31706621

Apparently, they are selling quite a few: http://www.cnbc.com/id/31708955 Cheers!

I would hate to see the current FFH share price if FFH didn't realize $2.1B on the CDS portfolio (thanks in large part to Brian) Prem's the best at giving out credit rather than ever taking any for himself, but our fearless leader also deserves significant credit, as does Francis Chou. As both Francis and Brian told the story at our dinner, they were dry for ideas at Hamblin-Watsa, and Prem asked everyone outright if anyone had any good ideas...anything! Francis and Brian sort of looked at each other and then brought up the idea of the credit default swaps. Prem was astute enough to take a shot on the idea considering what they expected to happen to the financial industry some time in the future. Then smart enough to hold on to them as they reaped just about all they could from them. Cheers!

Spending 2008 bonus? He deserves at least that. Hope he doesn't read this. ;D Yup, they do. Brian will probably ask for a bigger bonus now next time. ;D Cheers!

While long-term I think Buffett can still beat the S&P500 by a couple of percentage points, size really is starting to be an issue, as is the permanent ownership of more and more companies. Still far better than owning the index thought! Cheers! http://www.cnbc.com/id/31670203

Hi Folks, Please have all your questions in by Friday, as I will be compiling them and setting up the interview over the weekend. Thanks very much!

I would wait to see what this quarter looks like and how the operations are doing as we run up to the AGM before jumping to any conclusions. There is no way Sardar would accept such a salary unless the operations had improved enormously. - He was very particular in pointing out the previous managements deficiencies relative to their compensation. - He was adamant about making money with shareholders, not off of them. - He took an initial salary that was far under market value when he took the helm to prove that he could turn it around. - He still takes no salary from Western Sizzlin, thus the optics of his own compensation are important to him. Let's wait and see what the results are like. I can see a collegial compensation committee granting him such a salary to keep him happy, but I don't see Sardar accepting something like that unless there is something significant there for shareholders. We are only a few days away from this quarter's release. Cheers!

Totally agree Crip! If he really does want to turn over a new leaf, stopping others is probably the best place to start. Albeit, not like Sam Antar's bullshit reformation. Anyone else notice Sam hardly posts about Overstock anymore? Cheers!

Globe & Mail has a story on what Madoff's life will now be like: http://www.globeinvestor.com/servlet/story/RTGAM.20090629.wmadoffjail0629/GIStory/ While he won't be allowed conjugal visits, I suspect he will now be the boytoy of some guy named "Butch" in cellblock D. Cheers!

Maybe they can keep him on a respirator and heart/lung machine, but hopefully Madoff lives long enough to serve at least half that sentence! ;D Cheers! http://www.bloomberg.com/apps/news?pid=20601087&sid=aCaVUDaGGcAY

What are they talking about...that BHRG cut capacity in the 2nd Q? In the 1st Q, revenues at BHRG were up three fold, so I don't understand exactly what they are referring to. Cheers!

Hi Omagh, Nice picture! I just noticed it now. In regards to the charts you show, they aren't comparable quarters. Use these two: OSTK: http://finance.yahoo.com/q/cf?s=OSTK SNS: http://finance.yahoo.com/q/cf?s=SNS And you can really only examine the last two quarters on each chart, and perhaps another half of the quarter previous, since that's when Biglari really took over. It's no comparison, look at Biglari's numbers from operating cash flows and cash equivalents. If you examine the same quarters for the income statement, it's equally impressive: OSTK: http://finance.yahoo.com/q/is?s=OSTK SNS: http://finance.yahoo.com/q/is?s=SNS Look at the operating income/loss and the trend in Steak'n Shakes income statement. Huge strides in operating profits and I would expect another significant jump this quarter with more efficiencies and increased revenues. Don't get me wrong...I love both these guys. I'm one of the biggest defenders of Wacky Patty as some idiots call him. But the business model at OSTK is a tough one. The areas where you can cut costs while not cutting revenue in an online business, are fewer than at a brick and mortar retail business. People who like Steakburgers at Steak'n Shake, are going to eat Steakburgers only at Steak'n Shake because of the taste and nostalgia. But people who want something from Overstock, can likely find it at Amazon or even Ebay. We've owned Overstock in the past solely because of Patrick. We own plenty of Overstock debt at the moment. But it is a tough business model. Cheers!

I agree with you Smazz, but Prem and Sardar never said that they were only going to get paid what Buffett & Munger got. I guess it comes down to a personal choice for CEO's. I think we all are more critical simply because Buffett set the bar. So if Buffett only takes $100K, then we don't expect others to take significantly more. At the time when Buffett's salary was set at $100K, that would have been a pretty significant sum in today's dollars. To him, he didn't spend more than a $100K a year, so what the hell would he need more for. The guy pretty much hoarded his dollars until the donation to the Gates Foundation. Perhaps, Prem and other CEO's plan on utilizing more of their wealth for outside activities, rather than wait till late in life. We don't know. But at least the dividend was the same for all shareholders, and the increases gradual. I'm not sure too many people begrudge Biglari getting paid more, but the optics of a tripling of the salary is what got to people. Especially since the stock price is still relatively stagnant to where it was before he took over. As I said, let's see what happens over the next couple of quarters before the AGM. He's been pretty aware of what things look like from the shareholder's perspective, so I would assume things are humming along relatively well for this to all come about now. Cheers!

Big stakes by management are important, and you can make comparables regarding salary. But ultimately share price is based on increases in intrinsic value. So far Biglari has stabilized deterioriation, and strengthened the balance sheet. He's cut costs, increased efficiencies and the business should now be profitable each quarter...in other words intrinsic value is on the upswing. I'm not sure you can say this about Overstock or Level 3. The economics are changing for Level 3, but they have yet to do anything to decrease cash burn. Overstock had one profitable quarter, but they need to show that the business can sustain itself without burning through cash. Both Level 3 and OSTK have to show that they can increase intrinsic value without going back out to the capital markets for injections. Sardar has improved operations with existing assets and cash flows. There was no injection of capital. The business is now self-sustaining...the next step is growth. As I said, two different business models in different positions, but clearly SNS has a model that is already increasing intrinsic value. Cheers!

No slight to Patrick, but Biglari in one quarter has made as much as OSTK's total earnings. Two different businesses, and one was having a complete heart attack. The turnaround at SNS has been incrediby impressive by anyone's standards. The last company I saw turn around like this was ironically McDonalds under Jim Cantalupo. Even the turnaround at Fairfax which was spectacular in itself, took a few years to get going. Cheers!

Story on Zhao Danyang, the fellow who bought last year's "Lunch With Buffett" auction. Cheers! http://money.cnn.com/2009/06/26/magazines/fortune/lunch_buffett_danyang.fortune/index.htm?postversion=2009062610

We normally stick to value-investing related topics, but I thought this story of a woman in New Jersey, who uses the power of capitalism to assist small business owners was a great story. Cheers! http://www.cnn.com/2009/LIVING/worklife/06/18/cnnheroes.alfa.demmellash/index.html

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!

Completely off-topic, but because he was such a huge influence on pop-culture and music, I thought I would mention it. Michael Jackson has died of a heart attack at age 50. Sadly, a girl I had a crush on as a young boy, Farrah Fawcett, also passed away today. Should probably wait till CNN has said it, but these guys are pretty good when it comes to this stuff: http://www.tmz.com/

Wabuffo, I didn't even read the filing and went simply by your quote, but the other half of that filing was this: On June 24, 2009, the Company closed on a transaction repaying in full all sums due and owing under, and terminating, the Amended and Restated Note Purchase and Private Shelf Agreement between the Company and The Prudential Insurance Company of America originally dated as of September 20, 2002, as amended. The Company’s payment included $12.1 million in principal and interest and $0.5 million of yield maintenance premium. So either they've sold some properties or used some of the cash hoard, but SNS has no long-term debt any longer other than lease obligations. They still have the remaining $17M on their line of credit. Cheers!

I wonder if this issue impacted any institutional investors from buying FFH or ORH? Almost certainly to a degree. I'm sure the ones who also bailed once most of the CDS gains had been reaped, paid particular attention to that paragraph. Cheers!

I sent him an email: Hey Sardar, Congratulations on the raise, and I'm sure you deserve it, but be prepared for some pointed questions by shareholders for the compensation committee. And no, Buffett's salary with inflation doesn't come to $900K per year. :) All the best, Sanjeev Parsad Corner Market Capital Corporation Suite 1620, Box 36 1140 West Pender Street Vancouver, BC V6E4G1 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!

What is left of the thesis anyway? - Excessive leverage - Nope - Lack of Liquidity - Nope - Underreserved - Nope - Unethical Management - Nope - Offshore Accounts Hiding Problems - Nope - Investment Returns Can't Be Maintained - Nope - Debt At Subs Is High - Nope - Insurance Businesses Are Crap - Nope - Runoff Will Require Capital Over Time - Nope - SEC Investigation Into Reinsurance Activities - Nope What's left? - So-called "Warren Buffett of the North" - Well, he one-upped the master in 2008 - Jim Chanos Says "This Thing Is Going To Zero" - Priceless! Cheers!

So does the SEC now refund all of our legal costs? ;D I expect a minimum of a pint of blood when Fairfax goes to trial against the hedgies! Cheers!

Looks like everyone caught the news right away! About friggin' time. Cheers!