Parsad

+1!

+1! Remember Buffett was a fan of Phil Fisher as well. He also tried technical analysis when he was younger. I think the best way to view any investment manager is as an amalgam of their readings, life experiences and circle of knowledge they've developed over time. They may be heavily influenced by a handful of people, but they are far more than just that. Cheers!

Hi Parsad, Your unique insights are always appreciated since you've had "hands on" contact with Sardar. When I first joined the board I saw the archives with all the Sardar posts which were enlightening, since I hadn't read about some of that stuff in news or my own research. I sure hope I'm not emotionally attached to my BH investment, b/c to be honest, it's my first substantial investment in a stock. (I'm an honest guy, so, it's actually my only single stock holding, rest of money is in mutual funds. But my time is limited on reading/researching other companies, so when I get the chances I do look at other companies that meet my criteria). I like to call myself a numbers guy, and view investments solely on what is my educated prediction of its value, possible returns, etc. (to leave out emotions), but I have fully gotten engrossed in valuing the management team as well (which is certainly a large item to consider at BH) because as we are seeing, it is equally as important in some cases. In short, I guess BH has been a good company to cut my teeth on. And not to prove a point or get political, but on my ethics scale, when I saw the license agreement go through (w/o shareholder approval) I was livid and thought it was very unethical. Same when BCC was sold back to Sardar. (To further confuse my ethical compass, is it a coincidence that BCC has received massive compensation for investment results only after Sardar took back ownership? I realized that's when BH & TLF heavily invested in CBRL and it's price skyrocketed, but.....was it a play on his part (b/c of the cap)....?) It contradicts my earlier long post, but I (might) have forgone my ethical standards on BH (see emotion attachment above lol) to give Sardar a chance because I see how unique he is in todays environment. I still stand behind my thesis for investing in BH, I just hope it's not a costly lesson... Again, time will tell. And thanks to each poster on the board. Seeing people's comments that are smarter and more experienced than myself is beneficial. Thanks again for everyone's input. Looking forward to NBL's analysis. I might write mine out as well to share. Anyone here going to annual meeting in NYC in a few weeks? Take care, FC Hi frugalchief, There is nothing wrong with what you are doing. If there is anything I hope that readers take away from my comments, because unlike many others, I've been on both sides of the coin with Sardar...is that shareholders don't become complacent. Hold him accountable! Whether it's an issue today or some time in the future. Hold him accountable! With Buffett, partners were treated like partners. There was no need to hold him accountable, because essentially he and Munger did that for shareholders. That is a rare sight in corporate governance! Cheers!

It's an unfortunate securities loophole he's exploiting. For example, in Canada the exchanges will not let you issue shares, even via convertible debt, below $0.05 a share. So, you cannot do this. It would be very easy for U.S. securities regulators to stop this practice. Cheers!

Yes, exactly. That was the point of it, the license agreement is just a poison pill. It is no more and no less than that. Any corporate lawyer with a client who was an activist and a public company would implore their client to have as meaty of a poison pill as they could have. This was the board of BH's attempt to do it without calling it that and to do it as quietly as possible and thus without requiring shareholder approval. The interesting thing about it is that Biglari had no poison pill or really any other corporate protection from an activist until 2013, when this licensing agreement poison pill was adopted. I'm surprised he was involved in those previous fights (Freemont/etc.) and was over a year into his fight with CBRL's management without any of these types of protections. Anyway, this is not really a comment on the appropriateness of the licensing agreement or anything, but I know that if I were a CEO of a public company and were an activist or control investor who was engaging in proxy contests with other public companies (and I didn't own a prohibitive portion of the public company), I would want/need something similar to this. Thus, I have never found the licensing agreement that objectionable, because it is so obvious what it is. Huge difference between a rights poison pill and what Sardar put in place. Any future board could continue to institute the rights poison pill, and there is no beneficial interest for the board, it's directors or company executives, other than to deter a takeover. Sardar's licensing agreement has a compensatory benefit that goes directly to him! Cheers! I'm not here to defend SB's actions, but share my views, like others have. It is enlightening to see how others look at things, even though many of us differ in opinion. BH is an entrepreneurial company. It is like a start up, but had a great business to help jump start it. While yes, the license agreement is a poison pill, SB made it not entirely prodigious, but hurtful should it be implemented. Entrench is the wrong word. As SB has said, and WEB reconfirmed in his annual letter regarding BRK stock, if you don't intend to hold BH stock for at least 10 years, you're the wrong type of owner for the company. Fluctuations occur and should be evaluated in 5 year periods, whether positive or negative. But value should start to realize around 10+ years, for a startup like BH. If you truly care about business performance, you have to invest long-term. Just sit, wait, and let (competent) management do its thing. Or, like SB has said, he could've reported extraordinary earnings by selling CBRL stock and not reinvesting capital into the SNS franchise business. Both moves would've created tens to hundreds of millions in earnings over the past 4 years......and we wouldn't be having this discussion. If you are building your business, you have a game plan and expectations on what to achieve in 1, 3, 5, 10, 20 years from when you started - both for yourself and your investors. Would you want someone to come disrupt your plan, while the results show you are making progress (above expectations IMO) towards the end result? It would be disappointing to you and your investors (who invested alongside you because they believe in you). That is all SB is asking for. He disrupted a wonderful business that was being lead by bad business people with no plan and no regards to produce greater than $1 in value for each $1 spent. BH has the structure in place with a phenomenal business, SNS, in addition to SB's great investments (see below), that help augment value and increase investable assets to start acquiring operating businesses. He has reinvigorated SNS and has made good equity investments: Western Sizzlin (benefit of TLF) - 101% in 3.5 years Friendly Ice Cream (benefit of TLF & Western shareholders - 77.4% in 1 year Fremont Michigan InsuraCorp (benefit of BH) - 77% in 2 years Penn Millers Holding Corp (benefit of TLF & BH) - 39.3% in 6 months Cracker Barrel Old Country Store (benefit of TLF & BH) - 100%+ in 4+ years (while there have been some bad equity investments, they were minor is capital loss, though most are still unrealized as of this date) And time will tell how great First Guard Insurance Co. is and Maxim. And SB's ability to acquire operating businesses that truly provide significant value to BH. The license agreement is his way of saying give me some time to build a formidable holding company. Allow me the opportunity to make you wealthy. Sure, short-term results can be great (SNS turn-around in 2009, Fremont & Penn investments, Cracker Barrel), and they can be bad, but hopefully not a significant % of net worth (CCA Industries investment, ITEX, etc.), but that is not how we value BH. I think it has what, 8 years left on it, or so. But his plan (if he has one) is working out so far. SB has my vote until I feel he is truly screwing me. I value my ethical standards as well and I weigh his decisions heavily since I have a large portion of my investable assets in BH (it's small in $$ compared to most here). But I'm an owner because I believe in my leader and think he will do the right thing. His having control will increase year-over-year, to both of our benefits b/c he will have more skin in the game. SB has more to gain in 10-20 years by running BH and building it up than by being gone, giving up, and taking the royalty on the license agreement. Maybe the times have changed (when investors compare WEB (friendly, 'ethical,' good morals) to SB (hostile, 'unethical,' etc.)). BH has good things going for it. I look up to WEB, but if SB was anything like WEB was/is today (maybe partly b/c of WEB's celebrity status and others trying to find the "new WEB"), BH wouldn't be where it is. SB is a highly focused, determined, and intelligent individual. His intellect and brashness (right word to use?) rubs people the wrong way, I get it. I see it as confidence and an un-formidable attitude to not listen to those who want to inject their opinion. SB definitely goes against the crowd which is one reason I believe he has been so successful. He isn't the folky charming WEB. But that's OK, because no two of us are alike. Today's investing environment is more competitive and hostile than ever before (my study of the 30's-70's is minuscule compared to most, but I believe you have more people competing for investments and many un-informed investors in the marketplace) who get persuaded by misguided "activist" investors like Groveland. I appreciate you lending an eye to reading my thoughts. I'm sure something will be taken out of context. But this is part of the thesis on my investing in BH. I know it isn't for everyone....and that is perfectly OK. I know there are a small handful of us who believe BH is a fantastic investment. These are small issues to the bigger picture of what will BH look like 30 and 50 years from now (my personal investment timeline). We might laugh a few decades from now about the license agreement and learn something about being able to implement a plan without it being disrupted. But until I don't make any money for a long stretch of time, or like Gio said, "If and when I think shareholders get to pay more than they receive, I will act accordingly," I will remain invested and continue buying more BH. But we haven't had to pay anything ridiculous compared to the value received yet. So I won't fret or worry about SB continuing to make me money and increase BH's wealth, and therefore, my wealth. Cheers! (Disclosure: Long BH, 26 yrs old, not in investing industry. Just been studying, reading, and investing in BH since 2009.) Great post frugalchief! I have no doubt that Sardar will make plenty of money over time...it's why I owned Western Sizzlin, then Steak'n Shake and eventually Biglari Holdings. I actually interviewed Sardar back in 2002 when no one knew who he was. I also owned as much of Steak'n Shake (through call options and equity) as Sardar did before it became Biglari Holdings. I was also one of the few people to speak to him extensively about the compensation plan the weekend it was announced...for two hours in Omaha...several years ago! And I was the only person to actually send a letter to the board voting against the name change to Biglari Holdings when it was announced. So, I know Sardar and his abilities as well as anyone on here! Sardar making money has never been a doubt! That is a certainty that he would be very rich one day, and naturally shareholders alongside him would also be wealthy. But there is far more to life than making money...especially how you make the money! We would not compromise our ethics on these issues. But many have and will continue to do so to justify how they are making that wealth. From the name change, compensation plan changes, share structure changes, buying and then selling back Biglari Capital, etc...these are ethical lapses. But people naturally have to draw the line where they believe a line should be drawn. Perhaps, ours is too conservative...or yours is too liberal. I don't know the answer to that. In terms of some of the posters questioning how Buffett conducted himself, well that is a different cup of tea. When shareholders became involved with Berkshire, they knew he had a very large controlling shareholder stake...but Buffett still took everything to a vote, including changes in share structure, etc. He fixed his compensation, so that was never an issue. All in all, Berkshire shareholders were treated like partners, even though Buffett was calling the shots. This was not the case at Biglari Holdings. He never had a controlling stake. If votes did not pass, find another way...be it buying back Biglari Capital and then moving BH assets into it. This is not the same at all when compared to Berkshire and corporate governance. Again, perhaps we are too conservative and others are too liberal in their stance on these issues. All I know is if it doesn't feel right, you can't stand behind it. Cheers!

All wonderful answers, but unrelated to my questions: Was there a shareholder vote and resolution to move the assets from BH to TLF? Or was this done solely by the CEO with/without board consent? Simply put, did shareholders vote on this change? Cheers!

Another question comes to mind here in terms of the whole TLF and BH situation. One that I'm more than happy to bring up and have Gio and Ragu answer: Was there a shareholder vote and resolution to move the assets from BH to TLF? Or was this done solely by the CEO with/without board consent? BH shareholders, who own the underlying assets contributed to TLF, are now paying Sardar a huge incentive fee through TLF. BH shareholders would probably do better by investing that capital into Fairfax Financial, Markel, Dhandho or several other stocks that will do as well as Sardar over the next 15-20 years, but with more of the profits being retained in shareholder equity, rather than lining Sardar's pockets! This would be like me moving Premier's assets that we raised in the private placement, and putting them into the MPIC Funds. A completely unethical endeavour if there was one and what should make what happened at BH a bit disturbing to shareholders! Cheers!

Guy Spier and Mohnish will be speaking to MBA students at The Stanford Graduate School of Business in a joint session on Monday, March 16 from 12:15 to 1:15 PM (Room C106, 655 Knight Way, Stanford, CA). If you'd like to attend, please drop a note to nickii_karen@pabraifunds.com. They have very limited seats for non-Stanford students. First come; First served! And then they are on to TED 2015 in Vancouver!!! Cheers!

The answer imo is very easy: nothing has changed! But I would have done the same anyway. Let me explain: In my company I am the one entitled to have the last word on any truly important matter. As it should be! Because I am the one who built it from scratch, I am the one who is at the office each day at 7.00 am, I am the one who knows how the money flows in and out (to the last Euro!), I am the one who think about it 24 hours a day, each day of the week, and therefore I am the one who truly knows what’s in the best interest of my company for the long term. In other words, it is my brainchild, and no one cares about it like I do. Not even close! Now, let me say that, if I hadn’t control over my company, I would be just furious… The same is true for Biglari, I guess. And that forces him to find other solutions… that most people don’t like and judge unethical. I might not like them as well, but I understand the rationale behind most of them: for instance, what would happen if Biglari got ousted as CEO during the next AM and the LF still were owned by BH? Of course, Biglari would find himself with nothing to manage! Instead, with the LF in his hands, he would still suffer the greatest business defeat of his life so far, but at least he could go on managing money and could have a base from which to start anew. An entity he truly controls 100%. Why shareholders are against a double class share? Imo the simple act of introducing a double class share would solve all our issues with Biglari! ;) Cheers, Gio Gio, You have full control of your company, as the owner, thus you can do as you please. Sardar is not in control of his company, and is not the owner, but an executive who is directly responsible to and reports to the board of directors. The owners of BH are its shareholders not Sardar! You completely disregard the fact that Sardar bought back BCC because he could not get the cap removed...it was as simple as that. Nothing about control, but compensation...and rightfully so if he felt that he deserved more compensation. But this is why people on here get rude (unfortunate), because you openly deny the true reason why the action was undertaken, and make whatever excuse you can to justify the behavior. And he spins it in his own letters as well...there was no "financial and regulatory" reasons...they just couldn't get shareholders to remove the cap, and he would be getting compensated less than if those assets were within TLF alone and he was eligible for an incentive fee. The corollary argument shareholders could make is that TLF would also not have as much assets under management now, if it weren't partly due to all of the capital raised from shareholders...thus Sardar would only be entitled to a portion of those incentive fees...less than he is taking. Again, the question of ethics and double-dipping come to mind here. Cheers!

From 2010 BH Annual Letter: Entering fiscal 2010, I was concurrently managing three separate businesses whose ownership was divergent: (1) Steak n Shake Operations, Inc., (2) Western Sizzlin Corp., a former NASDAQ-listed company whose main businesses lie in investment management and franchising/operating restaurants, and (3) Biglari Capital Corp., general partner to The Lion Fund, L.P. Exiting fiscal 2010, these three businesses became wholly-owned subsidiaries of BH. Resultantly, all my business affairs have been centralized into BH. Furthermore, the acquisitions of Western and BCC are small but important steps for BH’s morphing into a diversified holding company.... ...The next transaction also involved a related business, Biglari Capital Corp. (“BCC”), general partner to The Lion Fund, L.P. (“TLF”), a hedge fund. This purchase was consummated on April 30. Concern for valuation was irrelevant because BCC was folded in for $1. The transaction was contingent upon a compensation arrangement that I will discuss shortly. This unifying of BH and TLF was significant given our strategy of purchasing interests in other companies, espousing the unlocking of value. Removing potential conflicts allows me to invest freely for the benefit of TLF partners and BH shareholders without concern for divergent interests because now, not I, but BH, is the sole beneficiary of incentive fees amassed through its position as general partner. Additionally, because BH is in the business of obtaining other businesses in whole or in part, an investment arm will assist, mainly in facilitating and expediting the partial ownership of other companies. The partners of TLF are receiving advantages from the resources of BH, and BH shareholders will gain because of their access to capital as well as to the incentive fees that over time should build. From 2013 BH Annual Letter: Building an enterprise is messy — the last five years should attest to that. As an entrepreneurial company, we are constantly experimenting with and adjusting to situations. As a consequence of this approach, in July 2013 we adapted our structure in an important and vital way: BH transferred most of its marketable securities to The Lion Fund, L.P. and The Lion Fund II, L.P. (together referred to as The Lion Fund), managed by Biglari Capital Corp., the general partner. As part of the transaction, I once more became the sole shareholder of the general partner. For regulatory and financial reasons, BH divested itself of the investment management business. However, under the new arrangement, BH continues to maintain its economic interest in the transferred marketable securities but without the burdens associated with owning an asset management firm within a public company. Moreover, I continue to hold full capital allocation responsibility for both entities, Biglari Holdings and The Lion Fund. As an entrepreneurial investor and operator, I will continue to adjust and manage the organization to fit the circumstances. Gio or Ragu, From the 2010 Letter, it is clear that merging BCC into BH was beneficial to all parties involved and removed conflicts of interest...these were Sardar's own words. What changed in 2012 and what were the financial and regulatory reasons to divest BCC from BH? Also, what burdens did BH become encumbered with by managing an asset management company that aren't faced by Sardar managing BCC? Cheers!

-- Prem Watsa 2014 AL Am I wrong if I say The Lion Fund might be even cheaper for BH shareholders? Because BH shareholders don't pay the 1 1/2% fixed fee? Gio Nope, you would be correct! And MPIC Funds and Pabrai Funds are even cheaper for BH's shareholders because our hurdle is 6%, not 5% like Prem's entity or Lion Fund up until November 2010. The arrangement with the Lion Fund was updated when BH bought Biglari Capital, and it was changed to a 6% hurdle. I'm not sure what the current arrangement is after Biglari bought back Biglari Capital from BH. Cheers!

Yes, exactly. That was the point of it, the license agreement is just a poison pill. It is no more and no less than that. Any corporate lawyer with a client who was an activist and a public company would implore their client to have as meaty of a poison pill as they could have. This was the board of BH's attempt to do it without calling it that and to do it as quietly as possible and thus without requiring shareholder approval. The interesting thing about it is that Biglari had no poison pill or really any other corporate protection from an activist until 2013, when this licensing agreement poison pill was adopted. I'm surprised he was involved in those previous fights (Freemont/etc.) and was over a year into his fight with CBRL's management without any of these types of protections. Anyway, this is not really a comment on the appropriateness of the licensing agreement or anything, but I know that if I were a CEO of a public company and were an activist or control investor who was engaging in proxy contests with other public companies (and I didn't own a prohibitive portion of the public company), I would want/need something similar to this. Thus, I have never found the licensing agreement that objectionable, because it is so obvious what it is. Huge difference between a rights poison pill and what Sardar put in place. Any future board could continue to institute the rights poison pill, and there is no beneficial interest for the board, it's directors or company executives, other than to deter a takeover. Sardar's licensing agreement has a compensatory benefit that goes directly to him! Cheers!

+1! I can tell you exactly why I'm fat and overweight. It has nothing to do with sugar, gluten, etc, but the fact that I do not eat a balanced diet and do not get enough exercise. You eat too many calories and don't exercise at least three times a week, your body will slowly, if not over years, become unbalanced and your health will deteriorate. It's as simple as that! Not that sugar is toxic, or whatever smoke people are blowing up your ass these days. Anything in a large enough dose will kill you...even water! Your body is self-regulating and a prime piece of technology...to call it a marvel of engineering is an understatement. Yes, processed foods over the years have increased the amount of sugar and sodium levels in them. But it all still comes down to a balanced diet, watching your total caloric intake and a moderate amount of exercise. Those three things will take care of a whole host of other ills. 15 years ago, scientists and doctors said you shouldn't consume more than a few eggs a week. Now, doctors and scientists are saying that eating a couple of eggs a day isn't an issue. Red meat, coffee, sugar, salt, butter, alcohol, and whatever else go in and out of favour every decade. The real problem isn't sugar or fat, but the sheer size of the portions we get these days. It all started with Big Gulps and Supersized...7/11, Costco and McDonalds should all get the same amount of blame! If you went to a restaurant 20-30 years ago, their dinner plate is today's appetizer plate, and today's dinner plate can hold twice as much food as back then. A Big Mac used to be the biggest burger you could eat when I was a teenager...today it's about the same size as a fully-loaded "L'il Buddy Burger" at Five Guys! That's the little burger at Five Guys...the one children order these days! Even if you order something healthy at a restaurant, the portion size is huge. So while you may be eating a nice salad, the total caloric value of that salad may be well over 1,000 calories. A 7 oz steak, with vegetables and mashed potatoes is healthier and less than 2/3rds of the calories. You could add a Coke and still come in under the salad. And then you have all of the food porn that people love! Inundated with food culture, and the fact that acquiring food gets easier and easier, while lifestyles are more and more sedentary, you can easily see why the world is becoming fat...and it isn't due to the sugar, salt, fat or gluten. Cheers! Sanjeev, You are right about your circumstances and what we should be doing to trim down, but in a strange way we may be unwitting victims of an alien invasion. No, this isn't about spooky invasions of aliens from other planets or graveyards, but about aliens all around us and even inside us. Yikes! That sounds even weirder, but it's true! We all have hundreds of species of bacteria living inside us in our digestive tracts and especially in our colons. These are continuously fighting against each other for living space and dominance. When we eat a diet that is mostly wholesome whole grains, vegetables and fruits, an amazing thing happens after a period of time. Certain types of bacteria will take over most of the space in our colons. These are the ones that like to feed on the fiber and larger molecules of resistant starch that are part of a mostly plant based diet. When that happens, there is an amazing transformation. The products of that beneficial biome release substances that are absorbed through the gut and have great health benefits throughout the body. One of those benefits is to suppress excessive appetite and to predispose us to enjoy the same whole grains, fruits and vegetables those types of bacteria like. If we continue to eat those foods the undesirable competitors of the good bacteria won't have available the different type of food from our diet that they need to mount a counterattack and re conquer the territory. Then, we are in the sweet spot. We now like and enjoy those foods that are good for us as we benefit from the positive feedback loop from the colon with the good bacteria that release beneficial substances throughout our bodies. The diet that once seemed so hard to transition to is now very easy. But wait, there is more! We have lost a lot of extra weight, and it is easy for us to get up out of our chairs and move around. We realize we have begun to enjoy taking walks; so we walk a little farther. That nagging pain we used to have in our feet is getting better as our feet don 't have to bear as much weight. Then, we may do something we haven't done in years: we begin to jog a little bit. And the feedback loop goes around and around as we get more and more healthy. I totally understand the bioflora residing in our colon and how that affects our health. But my main point was a lot of the problems with the car can be fixed by simply making sure the battery is charged, brakes aren't rusted out from sitting still, and the engine is revved from time to time. Everything else is the fine tuning of the engine...using better gas, oil, washes, detailing, etc. If more of us just did the basics, that would change a lot of things...I'm as guilty as anyone on this matter! :-X Cheers!

+1! I can tell you exactly why I'm fat and overweight. It has nothing to do with sugar, gluten, etc, but the fact that I do not eat a balanced diet and do not get enough exercise. You eat too many calories and don't exercise at least three times a week, your body will slowly, if not over years, become unbalanced and your health will deteriorate. It's as simple as that! Not that sugar is toxic, or whatever smoke people are blowing up your ass these days. Anything in a large enough dose will kill you...even water! Your body is self-regulating and a prime piece of technology...to call it a marvel of engineering is an understatement. Yes, processed foods over the years have increased the amount of sugar and sodium levels in them. But it all still comes down to a balanced diet, watching your total caloric intake and a moderate amount of exercise. Those three things will take care of a whole host of other ills. 15 years ago, scientists and doctors said you shouldn't consume more than a few eggs a week. Now, doctors and scientists are saying that eating a couple of eggs a day isn't an issue. Red meat, coffee, sugar, salt, butter, alcohol, and whatever else go in and out of favour every decade. The real problem isn't sugar or fat, but the sheer size of the portions we get these days. It all started with Big Gulps and Supersized...7/11, Costco and McDonalds should all get the same amount of blame! If you went to a restaurant 20-30 years ago, their dinner plate is today's appetizer plate, and today's dinner plate can hold twice as much food as back then. A Big Mac used to be the biggest burger you could eat when I was a teenager...today it's about the same size as a fully-loaded "L'il Buddy Burger" at Five Guys! That's the little burger at Five Guys...the one children order these days! Even if you order something healthy at a restaurant, the portion size is huge. So while you may be eating a nice salad, the total caloric value of that salad may be well over 1,000 calories. A 7 oz steak, with vegetables and mashed potatoes is healthier and less than 2/3rds of the calories. You could add a Coke and still come in under the salad. And then you have all of the food porn that people love! Inundated with food culture, and the fact that acquiring food gets easier and easier, while lifestyles are more and more sedentary, you can easily see why the world is becoming fat...and it isn't due to the sugar, salt, fat or gluten. Cheers!

I'm sorry, I don't go on these boards often. Who's Sanjeev? I wouldst be Sanjeev...thy Lord of the message boards! Do not use my name in vain, lest thee be banned hence forth. What username did you want instead? Cheers!

Too early to say that. If China slows further, deflation will increase. Cheers!

+1! If anything should perturb investors, and I think to certain degree this was a royal f**k up because they were so conservative, but the hedges cost us a lot. They were just way too early with them. Equity prices were cheap, the hedges had limited upside at the time, and the only reason they needed them was because any significant drop in their equity/bond portfolio would have been magnified by the amount of asset/equity leverage they use. You can't fault them for their conservatism, as the world was falling apart...but They would have been better off holding more cash and no hedges, or maintained a lower ratio of leverage. Cheers!

Ben's a terrific choice! Prem's wife Nalini would have been a good choice too. Cheers!

First of all...Prem is not Buffett. No one is Buffett, except for Buffett. It's a moot point, because there is no one like him...period! Second, Buffett no longer invests like he did when he was younger...Charlie had a lot of influence on him...he's no longer a pure Ben Graham investor. Can anyone say that BNSF was an investment Graham would have made when Berkshire bought it? Yet, it has turned out spectacularly well. Fairfax and their team are pure Ben Graham investors. They will buy out of favour, distressed assets that other people don't give a damn about. They will make 10-12 investments and 1-2 of those will go to zero or there abouts. But they will hit home runs on another 4-5, while 4-5 will be modestly higher, lower or flat. That's how they operate...average in, average out...and hopefully your analysis was correct on a good chunk of your ideas. There's nothing complex or hidden that you are missing. They have a team of people who invest the capital...some of those team members will get their analysis right on an idea, and some will get it wrong. No different than Todd Combs or Ted Weschler looking after some of Berkshire's portfolio and getting things right or wrong relative to Buffett. It's not about questioning someone who looks after your money. Everyone cares about their own money as much as you do. But I've noticed that the ones who usually say that are the ones that sell at the wrong time and buy at the wrong time. It's like mutual fund investors...they generally put capital in at the wrong times and pull it in a panic at the wrong times. The average investor's time horizon is relatively short...a couple of years at best. How much of an impact will SD have on Fairfax? We'll find out at some point in time, but I bet it is heck of a lot less than this discussion is suggesting it will be. Cheers!

Really...this is what you have to worry about? Mistake of all mistakes!? I crack up every time I hear people second guess Prem. He's not going to be right on everything, and yes they will f**k up royally on some things from time to time, but he will still be right on enough things to outperform almost all of his peers over the long-term...due to the amount of asset/equity leverage they utilize and their pure Ben Graham investing framework. What percentage of their $30B portfolio is in SD? Forget them buying at $8 down...even if they totally screwed up the valuation and understanding of the business, and then they started buying at $20 down...what is the total percentage of the $30B they put into SD...at cost, not today's valuation. They would have had to put in at least $1B at cost into SD to even begin to think it would seriously hurt shareholder equity long-term if it went to zero. I would think their total cost is probably around $400M...if that. And the assumption is that the other $24.6B of their $25B+ investment portfolio is sitting idle doing nothing. Once you get past that, then you can see why this concern is irrelevant! Cheers!

ET Now Channel in India has donated 600, 1-minute ad slots to Dakshana through March. Here is Dakshana's first television ad: Cheers!

LOL. Maybe you guys can ask him how can he lead a fairly stress free life while running one of the largest companies in USA and periodically running into near-death corporate situations (Washington Post strike in 70s, SEC investigation in 70s, Salomon Brothers debacle, Gen Re debacle, Net Jets debacle, death of all the "made in America" brands he bought, Lubrizol and Sokol, etc.). I would have killed myself multiple times during his career. "Stress free" my a** ??? ::) :-X :'( :o +1! There is nothing stress-free about Buffett's life, except that he gets to do what he loves...so the stress is there, but viewed differently than say someone who absolutely hates their job. Cheers!

The annual letter will go out with the SAGM circular to shareholders. That meeting is set for April 2nd. Once that circular is out, I will also put it on the website. Cheers!

I think that's where you've completely missed the mark Gio! It's never been about the dollar amount, but the structure and how he went about getting what he wanted. Even when I had a 2-hour conversation with him and Phil at the Omaha Marriott, the weekend when he announced his structure, I did not have a problem with it...just the hurdle and percentage of the incentive fee since it was captive capital. But what broke the camel's back was the various attempts at passing or bypassing shareholder's wishes to institute the package he wanted...sell Lion Fund then buy it back and fold BH's assets into Lion Fund. Sardar would have been a very rich man in the future regardless...he just wanted to get there a lot quicker than shareholders thought he should! Cheers!

Mohnish, Sreeni Pulavarti (UCLA Endowment) and Mihir Worah (PIMCO) fire-side chat...minus the fire and fireplace! ;D Cheers!