Jurgis Posted June 7, 2018 Share Posted June 7, 2018 the returns are great! The returns are great if the business is done right. Which maybe it will be, maybe it won't. I guess the argument is that with 85% still being held by original owners, they should have motivation not to screw the business. Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted June 7, 2018 Share Posted June 7, 2018 Google tells me....the Solomon family co-founded and (probably) controls the business. I count at least 5 members of the family on the board. The family appears to have deep pockets and deep roots in New Orleans. The patriarch Teddy Solomon built a Louisiana movie theater empire, while his son co-founded and Crescent and continues to serve as CEO. Since they are just minority investors here, Boston Omaha must think that the Solomon's are good operators. Anyone know how the below compares to how Credit Acceptance operates? https://www.cbtno.com/auto-dealers/program-overview/ Link to comment Share on other sites More sharing options...
Spekulatius Posted June 7, 2018 Share Posted June 7, 2018 the returns are great! The returns are great if the business is done right. Which maybe it will be, maybe it won't. I guess the argument is that with 85% still being held by original owners, they should have motivation not to screw the business. These business attract managers that are as scummy than their customers. In addition, you probably have to deal with bribery, corrupt police, mafia of sorts etc., which makes it difficult for a public company to keep the books straight. Or you can invest in countries like Russia, where all the above is more or less legal. Stocks there are cheap too. Link to comment Share on other sites More sharing options...
MrB Posted June 8, 2018 Share Posted June 8, 2018 the returns are great! The returns are great if the business is done right. Which maybe it will be, maybe it won't. I guess the argument is that with 85% still being held by original owners, they should have motivation not to screw the business. These business attract managers that are as scummy than their customers. In addition, you probably have to deal with bribery, corrupt police, mafia of sorts etc., which makes it difficult for a public company to keep the books straight. Or you can invest in countries like Russia, where all the above is more or less legal. Stocks there are cheap too. America's Car-Mart -- decent returns and certainly not scummy. On another note; I think these guys are invested in Nicholas Financial, so they probably have a certain understanding of the industry. Link to comment Share on other sites More sharing options...
cubsfan Posted June 8, 2018 Share Posted June 8, 2018 On another note; I think these guys are invested in Nicholas Financial, so they probably have a certain understanding of the industry. Bingo Link to comment Share on other sites More sharing options...
Guest Schwab711 Posted June 8, 2018 Share Posted June 8, 2018 Isn't BOMN just buying a really high risk stock because that's what their compensation package incentivizes? I think this is the issue with jockey investing. WEB has been unique in that he was independently wealthy and was willing to accept to delayed compensation, proportional to investors. I'm not saying all managers should run the company for free (or essentially free) or even that I would do it for free, but it's tough from the investors point of view. There is certainly value to having control of the company with less than majority stake so managers receive that 'compensation' that goes unrecorded and is difficult to appreciate. Link to comment Share on other sites More sharing options...
oddballstocks Posted June 8, 2018 Share Posted June 8, 2018 the returns are great! The returns are great if the business is done right. Which maybe it will be, maybe it won't. I guess the argument is that with 85% still being held by original owners, they should have motivation not to screw the business. These business attract managers that are as scummy than their customers. In addition, you probably have to deal with bribery, corrupt police, mafia of sorts etc., which makes it difficult for a public company to keep the books straight. Or you can invest in countries like Russia, where all the above is more or less legal. Stocks there are cheap too. Plus it's in New Orleans, where all of this stuff is the status quo... So yes... Link to comment Share on other sites More sharing options...
Spekulatius Posted June 8, 2018 Share Posted June 8, 2018 On another note; I think these guys are invested in Nicholas Financial, so they probably have a certain understanding of the industry. Bingo Owning a passive stake in a business does not mean one knows how to run it. Link to comment Share on other sites More sharing options...
Tim Eriksen Posted June 8, 2018 Share Posted June 8, 2018 On another note; I think these guys are invested in Nicholas Financial, so they probably have a certain understanding of the industry. Bingo Owning a passive stake in a business does not mean one knows how to run it. You lost me. The investment is a passive stake like Nicholas was. They aren't running the business. Link to comment Share on other sites More sharing options...
Munger_Disciple Posted June 8, 2018 Share Posted June 8, 2018 It seems to me that this company has been continuously raising new capital at large premiums to book and this fund raising has been the main reason for the increase in book value, not anything to do with operations so far. Seems very "un-Berkshire" like to me. Link to comment Share on other sites More sharing options...
benhacker Posted June 8, 2018 Share Posted June 8, 2018 On another note; I think these guys are invested in Nicholas Financial, so they probably have a certain understanding of the industry. Bingo Owning a passive stake in a business does not mean one knows how to run it. You lost me. The investment is a passive stake like Nicholas was. They aren't running the business. While not saying they have any insight into subprime. Calling the NICK stake passive seems wrong by a mile. Link to comment Share on other sites More sharing options...
Munger_Disciple Posted June 8, 2018 Share Posted June 8, 2018 Warrren and Charlie both raised money but for their hedge funds with were private entities, these guys are doing it here through a public entity but it is still just fundraising - as Warren and Charlie and Ben Grahamonce had to do. The part of it that gets me is the significant premium considering that it is just cash. That means that a high level of investment success is already baked into this - and I'm surprised that many value investors would be interested in that type of situation. As far as I know Warren, Charlie and Graham never raised capital from their LPs at a premium to NAV of their respective investment vehicles. Link to comment Share on other sites More sharing options...
Munger_Disciple Posted June 8, 2018 Share Posted June 8, 2018 This isn't like Biglari stuffing all of his comapny's money into his hedge fund without shareholder approval. That is a pretty low bar to compare any company to, and of course BOMN is not in the same category. But raising money from willing shareholders at high premium to book repeatedly doesn't make them Berkshire like. We can agree to disagree on this. Link to comment Share on other sites More sharing options...
NBL0303 Posted June 8, 2018 Share Posted June 8, 2018 But raising money from willing shareholders at high premium to book repeatedly doesn't make them Berkshire like. Fair play. I actually agree with you that this does not track Berkshire's playbook or anything like that but it seemed that you were implying that their fundraising was distinctly opposed to Berkshire values and that sort of thing and I do not see it that way. Link to comment Share on other sites More sharing options...
Hielko Posted June 8, 2018 Share Posted June 8, 2018 But raising money from willing shareholders at high premium to book repeatedly doesn't make them Berkshire like. Fair play. I actually agree with you that this does not track Berkshire's playbook or anything like that but it seemed that you were implying that their fundraising was distinctly opposed to Berkshire values and that sort of thing and I do not see it that way. I think it is. One of Berkshire's core values is treating new shareholders, exiting shareholders and current shareholders in a fair way and not to enrich one class at the expense of another class. Why do you think this was never part of the Berkshire playbook. Exactly because these kind of game have winners and losers. If Warren would wanted to have done stuff like this he could have done plenty of things like this. He didn't. That isn't juts a coincidence. Link to comment Share on other sites More sharing options...
Spekulatius Posted June 9, 2018 Share Posted June 9, 2018 In my opinion, raising funds above NAV is a good idea. It does not really matter that Buffet never did so. Raising funds above NAV is a rational decision, just as buying back shares below NAV is. Link to comment Share on other sites More sharing options...
CorpRaider Posted June 9, 2018 Share Posted June 9, 2018 Of course, as you all know, they bought the vast majority of the shares issued, via private placement with their funds. Link to comment Share on other sites More sharing options...
gfp Posted June 9, 2018 Share Posted June 9, 2018 Yeah, and Warren and Charlie sort of did it too http://www.berkshirehathaway.com/news/jun1998.html Obviously Warren and Charlie appreciate rational capital decisions and have preached that price matters for decades. Warren likes to take it to extremes by feeling guilty about buying out his partners "too cheap" and vice versa, but I'm sure everyone can agree that if BOMN is trading substantially above intrinsic value it is a lot better to be selling new shares than repurchasing shares. In my opinion, raising funds above NAV is a good idea. It does not really matter that Buffet never did so. Raising funds above NAV is a rational decision, just as buying back shares below NAV is. Link to comment Share on other sites More sharing options...
Cigarbutt Posted June 9, 2018 Share Posted June 9, 2018 Just to build on the above, in 1996, with the sale of B shares to prevent the formation of look-alikes, Mr. Buffett quite clearly said that he felt the issued shares were likely to be overvalued (!). The prospectus was quite atypical: https://www.sec.gov/Archives/edgar/data/109694/0000898430-96-001695.txt Around that time, he said (referring to valuation and price paid): "Investors making purchases in an overheated market need to recognize that it may often take an extended period for the value of even an outstanding company to catch up with the price they paid." However in 1997 and around the time leading to shares being issued again for the Gen Re acquisition, he publicly mentioned that, in his assessment, the price had become "more appropriate" (Geico and others were doing well). Interestingly, here is what would have happened to an investment in BRK: -shares bought in May 1996 when shares were "not undervalued": +/- 10-bagger -shares bought in 1997 when annual report came out: +/- 7-bagger -shares bought in 1998 when Gen Re was being acquired: +/- 4 bagger Then they say markets are efficient. Conclusion, the issuer has to be transparent and report facts in a reliable way (and does not need to go as far as Mr. Buffett in terms of transparency) and the buyer should do due diligence. My assessment of Boston Omaha Corporation is that they did their part of the contract. Rational decisions should be rewarded. Link to comment Share on other sites More sharing options...
mwtorock Posted June 11, 2018 Share Posted June 11, 2018 i am fine to pay above NAV as long as the cash is in good hands that will make enough returns in future periods. looking at what and how they made the investments, i think it makes a lot of sense. Link to comment Share on other sites More sharing options...
cubsfan Posted August 23, 2018 Share Posted August 23, 2018 Good to see these guys putting their new money to work: https://linkmediaoutdoor.com/link-media-aquire-tammy-lynn-outdoor/ https://linkmediaoutdoor.com/2076-2/ Link to comment Share on other sites More sharing options...
Jurgis Posted March 1, 2019 Share Posted March 1, 2019 http://www.bostonomaha.com/documents/165/21c2c6114f08e2fed05e3cbc9bc26e4b.pdf - 2019 annual meeting, June 8, Boston Link to comment Share on other sites More sharing options...
AJB96 Posted March 1, 2019 Share Posted March 1, 2019 There was a very good video interview published a week ago of Jim McLaughlin, the CEO of Link Media Outdoor: https://linkmediaoutdoor.com/2266-2/ Link Media Outdoor has made a few tuck in acquisitions recently: https://linkmediaoutdoor.com/link-media-outdoors-newest-acquisition/ Link to comment Share on other sites More sharing options...
AJB96 Posted March 19, 2019 Share Posted March 19, 2019 The 2018 Boston Omaha shareholder letter just came out and it's a great read. http://www.bostonomaha.com/documents/180/139294ffcdeaf829368d52deb1db0d76.pdf Link to comment Share on other sites More sharing options...
Jurgis Posted March 19, 2019 Share Posted March 19, 2019 Did they acquire three billboards outside Ebbing, Missouri? Link to comment Share on other sites More sharing options...
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