LRE.L - Lancashire Holdings Ltd

[muscleman]

Gio, I wonder what did you buy after you sold out LRE?  ;)

 

I have bought more ALS, more BH, more TPRE, more GLRE, more VRX, more ENDP, and more LMCA. I have also increased a bit my cash position. :)

 

Gio

 

I added more to my TPRE as well.

How would you compare TPRE vs GLRE? I think both investors have good skills, but GLRE's underwriting may not be as great as John Berger?

The reason that I put in a major position for TPRE is because I want 15-20% of my portfolio invested in event driven situations. TPRE provides this opportunity with a tax advantageous way.

GLRE seems more like a traditional value investing, so I would rather invest the rest of my money myself using traditional value approach.

[giofranchi]

GLRE seems more like a traditional value investing, so I would rather invest the rest of my money myself using traditional value approach.

 

All I can say is I judge Mr. Einhorn to be among the best investors of our times, if not ever. :)

 

Gio

 

[WhoIsWarren]

http://otp.investis.com/clients/uk/lancashiregroup/rns/regulatory-story.aspx?cid=326&newsid=416677

 

2.1m (owners') warrants have been exercised and are now included in ordinary shares outstanding -- see company press release.

 

It's not current management but it looks like it could be Brindle?  If true, I know he's left the company and all that, but it doesn't show much confidence in the business he's left behind (especially given the fall in the share price).

 

Alternatively, I recall that a sizeable number of those owners' warrants were sold into the market -- it could be that they were exercised and sold.

 

Anyone any insights?

[thefatbaboon]

Warren,

 

It also looks like roughy 4m  shares were sold (and bought I guess ;) ) on the 23rd May in two blocks, 2.33m shares @590 and 1.715m @614

[fareastwarriors]

 

Lancashire Holdings Limited Price Target Cut to GBX 800 by Analysts at Credit Suisse (LRE)

 

http://www.intercooleronline.com/stocks/lancashire-holdings-limited-price-target-cut-to-gbx-800-by-analysts-at-credit-suisse-lre/18866/

 

 

Equities research analysts at Credit Suisse dropped their target price on shares of Lancashire Holdings Limited (LON:LRE) from GBX 860 ($14.64) to GBX 800 ($13.61) in a research note issued to investors on Wednesday. The firm currently has an “outperform” rating on the stock. Credit Suisse’s target price would indicate a potential upside of 22.14% from the company’s current price.

 

Lancashire Holdings Limited (LON:LRE) opened at 653.50 on Wednesday. Lancashire Holdings Limited has a 1-year low of GBX 590.00 and a 1-year high of GBX 823.4999. The stock has a 50-day moving average of GBX 650. and a 200-day moving average of GBX 713.9. The company’s market cap is £1.190 billion.

 

Several other analysts have also recently commented on the stock. Analysts at Westhouse Securities reiterated an “add” rating on shares of Lancashire Holdings Limited in a research note on Thursday, June 12th. Finally, analysts at Barclays reiterated an “underweight” rating on shares of Lancashire Holdings Limited in a research note on Monday, June 2nd. They now have a GBX 589 ($10.02) price target on the stock. Two equities research analysts have rated the stock with a sell rating, seven have assigned a hold rating and six have given a buy rating to the company. Lancashire Holdings Limited presently has a consensus rating of “Hold” and a consensus target price of GBX 766.38 ($13.04).

 

Lancashire Holdings Limited (LON:LRE), along with its subsidiaries is engaged in the provision of global specialty insurance and reinsurance products.

 

[Guest ajc]

 

ValueX 2014 Presentation On LRE

 

http://www.scribd.com/doc/231184679/Porter-ValueX-2014-Presentation-Final

 

 

 

[Ian L]

Lancashire holdings Q2 earnings http://www.lancashiregroup.com/media/releases/2014/24-07-2014.aspx:

 

LANCASHIRE HOLDINGS LIMITED

GROWTH IN FULLY CONVERTED BOOK VALUE PER SHARE, ADJUSTED FOR

DIVIDENDS, OF 2.4% IN Q2 2014, 6.4% YEAR TO DATE

COMBINED RATIO OF 74.6% IN Q2 2014, 70.6% YEAR TO DATE

INTERIM DIVIDEND OF 5 CENTS PER COMMON SHARE

FULLY CONVERTED BOOK VALUE PER SHARE OF $7.67 AS AT 30 JUNE 2014

 

Elaine Whelan says:

The Group produced an RoE of 2.4% for the quarter with a combined ratio of 74.6%. Richard Brindle's retirement package and warrant exercises reduced RoE for the quarter by 1.3%. Excluding that impact, our RoE would have been 3.7% for the quarter.

[ASTA]

Finally something happening :D lets see how long it lasts.

[gfp]

Looks like Brindle sold out of all his shares - from insurance insider:

 

"

Lancashire's founding CEO Richard Brindle has sold out of the company completely and will be free to return to the market as soon as 2 January 2015, Lancashire told The Insurance Insider.

Brindle presided over a period of sector-leading performance at the London-listed business.

 

On a morning that Lancashire's share price surged 5.8 percent following its H1 results (as of 12pm BST, 24 July), chief risk officer Charles Mathias said he expected that "Richard [brindle] will re-emerge in the market".

 

Lancashire's head of investor relations Jonny Creagh-Coen added: "Richard will do what Richard does. He doesn't like being in the public domain and he'll probably come up with something. Good luck to him."

 

Brindle, who founded Lancashire in 2005, resigned in April and left the company inside of a month. Until a challenging period over the last 12 months, Lancashire has consistently been the sector's top performer on total value creation.

 

Public company CEOs typically have six or, more often, 12-month notice periods, with a significant non-compete period after that.

 

Mathias explained: "If you're looking at non-competes you get into all sorts of issues around enforceability if you try and make them too long.

 

"I'm guessing what the board wanted to do is to make sure that he wasn't in the market to compete with us on the big renewal date [1 January] next year."

 

The chief risk officer insisted that Lancashire is unconcerned by the prospect of a privately owned Brindle start-up. "I don't think there is anyone here who is losing any sleep about the idea of having to compete with Richard.

 

"There's plenty of other people out there who we're competing with every day. One more, one less doesn't really change the landscape of our market."

 

Rumours surfaced in the broking community during April that Brindle was working on a start-up company already. However, a friend of Brindle told The Insurance Insider earlier this year that although a return was likely in time, market conditions are currently unconducive and the outgoing executive had charitable and family commitments.

 

Creagh-Coen echoed this view: "I also know Richard well and he's not someone who is going to charge into a market that's tough anyway."

 

Mathias and Creagh-Coen confirmed that Brindle had exercised and sold his warrants during the second quarter and disposed of all of his substantial shareholding - something which is likely to explain some of the underperformance of the company's share price.

 

Including restricted stock shares that have vested, Brindle held 8.15 million Lancashire shares at 31 December. He also held 3.72 million warrants with an exercise price of $5.00.

 

If Brindle sold his shares at the lowest closing price in the quarter - 611p - he would have made £49.8mn ($84.6mn). Sold at the same price his warrants, netting out the $5.00 per share exercise price, would have been worth circa £12mn.

 

Lancashire also paid a severance package to Brindle believed to be in the region of $11mn. CFO Elaine Whelan explained in the company's results that this payout, combined with the exercise of the warrants, had depressed the insurer's return on equity by 1.3 percent in the quarter. On an annualised basis, the hit would have been 5.2 percent.

 

Creagh-Coen explained that nothing was given to Brindle on an ex gratia basis, with the salary, stock and dividends he received in accordance with his "good leaver" status.

 

"Everything is as it should be," he said.

 

Mathias also told The Insurance Insider that the company had explained that 18 percent+ returns on equity are "probably not achievable in the current market".

 

"But we still think we can produce returns of 10-12 percent to low teens."

 

He argued that this, combined with a yield that could see 100 percent of earnings paid out to shareholders and the reduced volatility from increased outwards reinsurance purchasing, made the company's shares an attractive buy."

[giofranchi]

Looks like Brindle sold out of all his shares - from insurance insider:

 

Sold all his shares?? Really??

 

Ok… So, I have a question for all of you who go on repeating Biglari is unethical: how do you judge Mr. Brindle's behavior?

No… actually I have two questions for you. And the second one is: would you invest with Mr. Brindle in a new company, were he to found one in the not too distant future?

 

My answer to the first question is: I don’t judge Mr. Brindle’s behavior.

My answer to the second question is: of course I would, if I think I understand how and why he will be successful with his new company, like he has been in the past.

 

Cheers,

 

Gio

 

[giofranchi]

Lancashire also paid a severance package to Brindle believed to be in the region of $11mn. CFO Elaine Whelan explained in the company's results that this payout, combined with the exercise of the warrants, had depressed the insurer's return on equity by 1.3 percent in the quarter. On an annualised basis, the hit would have been 5.2 percent.

 

A severance package of $11 million is not bad… for someone who could be thought of letting his shareholders down… with just a 1 month notice period… Isn’t it?!

Still, my own answers to both questions I have asked don’t change.

 

Gio

 

[WhoIsWarren]

 

A severance package of $11 million is not bad… for someone who could be thought of letting his shareholders down… with just a 1 month notice period… Isn’t it?!

Still, my own answers to both questions I have asked don’t change.

 

Gio

 

It's not as bad as it looks.  Dividends accruing to his RSS awards amounted to $9.8m out of a total $11.6m severance package.

 

I also don't think that the 1 month notice period made much of a difference. Yes, optically it looked bad.  Had he stayed on 'til the end of the year, but mentally have been switched off, shareholder's would probably have gotten false comfort, but nothing more.  Given there's no need for a hand-over period -- Alex, Paul, Charles, Elaine....they've been running the show for a while -- probably best thing was for Brindle to go quickly.

 

The more important question for me is why Brindle sold all his shares......at what would seem like a cheap price?  Doesn't he trust the guys he's leaving behind?  Doesn't he trust the ethos / culture he created will endure?  Or perhaps, as per the company, he just wanted a clean break?

 

We'll probably never know what was truly going through Brindle's mind.  But time will shed light.....

[Ross812]

Looks like Brindle sold out of all his shares - from insurance insider:

 

Sold all his shares?? Really??

 

Ok… So, I have a question for all of you who go on repeating Biglari is unethical: how do you judge Mr. Brindle's behavior?

No… actually I have two questions for you. And the second one is: would you invest with Mr. Brindle in a new company, were he to found one in the not too distant future?

 

My answer to the first question is: I don’t judge Mr. Brindle’s behavior.

My answer to the second question is: of course I would, if I think I understand how and why he will be successful with his new company, like he has been in the past.

 

Cheers,

 

Gio

 

Whatever happened, a founding CEO up and leaving a company inside a month doesn't smell right.

 

1- He planned on leaving but didn't disclose this to shareholder which I would judge to be unethical. If he starts a competing company inside of a year, he is extremely unethical.

 

2- He knew at the completion of the Cathedral acquisition he would forced out and didn't want the headlines. If this was the case, Brindle made a mistake that cost him his job with his acquisition. He still could have arranged for a more orderly departure, which would have been the ethical thing to do by his shareholders, but in the end it is a judgement call. 

 

3- He was forced out and could not arrange for an orderly departure. What happened to cause him to leave in that fashion? Was it something he did? Something the company did that he didn't want to hurt his reputation? Both would be unethical. 

 

If I thought 1 or 3 were the case, I would not invest with Brindle.

 

I tend to believe it was number 2 because of the timing with the Cathedral acquisition. I think he probably read the writing on the wall and decided to take his money and start a new company as quickly as possible. This reminds me of Udvar Hazy of ILFC who started Air Lease. Hazy started a competing company across the street from ILFC and hired ILFC's management. Ethical? No. But as an investor you can make a lot of money with a good entrepreneur with a chip on their shoulder. Keep in mind at least in the previous example that a lot of value still existed once Hazy left ILFC; take a look at Air Cap Holdings. I believe AL is a good investment as well.

 

 

 

     

 

 

[giofranchi]

If I thought 1 or 3 were the case, I would not invest with Brindle. 

 

Well… Instead, I would! Actually, 1 reminds me of Mrs. B!! ;) And I don’t think Buffett ever spoke about Mrs. B’s competing habits as extremely unethical…

My point: business is business… so many shades of grey… if you want something completely white, look for it somewhere else!

 

Cheers,

 

Gio

 

[racemize]

Warning, pretty much everything below is speculation:

 

Could it be that he just wanted to leave with a 1.5 BVPS valuation, given that the insurance market is at the worst place it has been since LRE's inception?  A soft market and a relatively high valuation to book makes for hard work and not a lot of clever tactics to implement, it seems to me.  Perhaps it stopped being interesting to him.

 

Secondly, if he elected to leave the company, it seems straight-forward that he would sell the shares.  If he wanted to maintain an economic interest, then he would also want to be involved, I would assume.  Putting myself in his place, if I were leaving, I'd sell everything too.  If I were interested in having my money involved, I'd also want to remain in a leadership position.

 

He might also need the money for whatever he is going to do next.

[Gamecock-YT]

 

He might also need the money for whatever he is going to do next.

 

That would be my guess.

[twacowfca]

It's good to be back on the board after travel and bicycle treking.

 

Lancashire is having a great year. This becomes clear after normalizing their reported earnings.  Earnings would have been about $75M this quarter after deducting $20M in charges associated with Richard's retirement. Adding back one off charges in Q1 including the sizeable amortization charge for  the finite life asset from the Cathedral acquisition, lifts adjusted H1 earnings above $140M or above $150M if the late filed claim associated with Q4 2013 is also backed out.

 

The solid team that Richard built has been calling their own plays during the last two years as Richard realized it would be foolish to micromanage them and spent time on the sidelines while they ran the ball.  The Lancashire team continues to do what they have done so very well.  :)

[WhoIsWarren]

Welcome back -- I had noticed you were a bit quiet alright..... ;D

 

Lancashire is having a great year.....

 

Absolutely.  However it's been a relatively light period in terms of (Cat) losses, so underlying profits / RoE has to be seen in that light. 

 

More important than current earnings though is how well they'll fare when big events / numerous events / unusual events occur.  It's only when the wolf comes knocking (and he will come knocking!) that we know who's made their house from straw, sticks and bricks!  ;)

 

Incidentally, Lancashire quotes their PMLs relative to total (tangible) capital, which includes long term debt (currently c.$330m).  While that's useful information as far as clients / brokers / regulators are concerned, unless this is loss-sharing debt (not likely!), as an equity holder I'm interested in PMLs relative to tangible equity.

 

So for example, based on the figures we got today, a 1-in-100 year GoM loss as % of tangible equity is 19% versus 15% as % of tangible capital.

 

Just to be clear, I'm not saying management is trying to mislead shareholders, it's just the way they present the figures; if you weren't careful you might underestimate the loss potential.

 

The company has stated that they maintain sufficient capital such that they expect to be able to write their current book after suffering.....(I could have this wrong, but it's something like this)......a 1-in-100 year wind or a 1-in-250 year quake.  Therefore this implies that they are carrying c.20% surplus capital.

 

Just some random thoughts......

[twacowfca]

Welcome back -- I had noticed you were a bit quiet alright..... ;D

 

Lancashire is having a great year.....

 

Absolutely.  However it's been a relatively light period in terms of (Cat) losses, so underlying profits / RoE has to be seen in that light. 

 

More important than current earnings though is how well they'll fare when big events / numerous events / unusual events occur.  It's only when the wolf comes knocking (and he will come knocking!) that we know who's made their house from straw, sticks and bricks!  ;)

 

Incidentally, Lancashire quotes their PMLs relative to total (tangible) capital, which includes long term debt (currently c.$330m).  While that's useful information as far as clients / brokers / regulators are concerned, unless this is loss-sharing debt (not likely!), as an equity holder I'm interested in PMLs relative to tangible equity.

 

So for example, based on the figures we got today, a 1-in-100 year GoM loss as % of tangible equity is 19% versus 15% as % of tangible capital.

 

Just to be clear, I'm not saying management is trying to mislead shareholders, it's just the way they present the figures; if you weren't careful you might underestimate the loss potential.

 

The company has stated that they maintain sufficient capital such that they expect to be able to write their current book after suffering.....(I could have this wrong, but it's something like this)......a 1-in-100 year wind or a 1-in-250 year quake.  Therefore this implies that they are carrying c.20% surplus capital.

 

Just some random thoughts......

 

Good points.

 

Management's main concern is PMLs related to tangible capital and the liquidity and ratings  of that capital because that's the way ratings agencies view capital. PMLs related to equity is important for seeing how lumpy shareholders returns may be, but total tangible capital gives them more solvency cushion than equity alone would contribute.  :)

 

The big news in the last several months is how much PMLS have come down.  This means that Lancashire has refused to reach for yield in their underwriting in the soft market just as they have refused to reach for yield with the high quality and low duration of their financial assets.

[WhoIsWarren]

The big news in the last several months is how much PMLS have come down.  This means that Lancashire has refused to reach for yield in their underwriting in the soft market just as they have refused to reach for yield with the high quality and low duration of their financial assets.

 

Precisely right with the PMLs.  There's an element of trust here though.  Lancashire's PMLs are based on inputs from the external cat models, with internally-calculated adjustments.  So it depends how conservative and honest they want to be.  Which of the modelers' loss estimates do they use?  On average, do they adjust up or down (and if so, by what magnitude)?

 

I think I remember reading an earnings call transcript from a while back where they described their approach to PML modeling.  In essence they try to be conservative in their loss estimates -- with a lot of the "switches on".  This may not be the case for some 3rd party capital, who will want to present attractive (net of loss) but unrealistic expected returns to prospective investors, which allows them price cheaply.

[twacowfca]

The big news in the last several months is how much PMLS have come down.  This means that Lancashire has refused to reach for yield in their underwriting in the soft market just as they have refused to reach for yield with the high quality and low duration of their financial assets.

 

Precisely right with the PMLs.  There's an element of trust here though.  Lancashire's PMLs are based on inputs from the external cat models, with internally-calculated adjustments.  So it depends how conservative and honest they want to be.  Which of the modelers' loss estimates do they use?  On average, do they adjust up or down (and if so, by what magnitude)?

 

I think I remember reading an earnings call transcript from a while back where they described their approach to PML modeling.  In essence they try to be conservative in their loss estimates -- with a lot of the "switches on".  This may not be the case for some 3rd party capital, who will want to present attractive (net of loss) but unrealistic expected returns to prospective investors, which allows them price cheaply.

 

They have performed relatively well compared to peers after catastrophes.  This suggests that their modeling is conservative.  Monte Carlo simulations for vehicles like Saltire , and probably Kinesis, have shown  significant but low probability of total wipeout for their investors in the various bundles of risk they accept, balanced by high returns on average. Those investors are highly sophisticated, and are willing to take the occasional catastrophe loss on a risk not correlated with most financial risks, in exchange for average returns that are high but lumpy.  A total loss on something the size of a Kinesis bundle is a drop in the bucket for most of them.

[rjstc]

Welcome back TWACOWFCA. Missed your comments.

 

"The solid team that Richard built has been calling their own plays during the last two years as Richard realized it would be foolish to micromanage them and spent time on the sidelines while they ran the ball.  The Lancashire team continues to do what they have done so very well."

 

I agree with your statement here.

[peter1234]

Looks like Brindle sold out of all his shares - from insurance insider:

 

Sold all his shares?? Really??

 

Ok… So, I have a question for all of you who go on repeating Biglari is unethical: how do you judge Mr. Brindle's behavior?

No… actually I have two questions for you. And the second one is: would you invest with Mr. Brindle in a new company, were he to found one in the not too distant future?

 

My answer to the first question is: I don’t judge Mr. Brindle’s behavior.

My answer to the second question is: of course I would, if I think I understand how and why he will be successful with his new company, like he has been in the past.

 

Cheers,

 

Gio

 

Whatever happened, a founding CEO up and leaving a company inside a month doesn't smell right.

 

1- He planned on leaving but didn't disclose this to shareholder which I would judge to be unethical. If he starts a competing company inside of a year, he is extremely unethical.

 

2- He knew at the completion of the Cathedral acquisition he would forced out and didn't want the headlines. If this was the case, Brindle made a mistake that cost him his job with his acquisition. He still could have arranged for a more orderly departure, which would have been the ethical thing to do by his shareholders, but in the end it is a judgement call. 

 

3- He was forced out and could not arrange for an orderly departure. What happened to cause him to leave in that fashion? Was it something he did? Something the company did that he didn't want to hurt his reputation? Both would be unethical. 

 

If I thought 1 or 3 were the case, I would not invest with Brindle.

 

I tend to believe it was number 2 because of the timing with the Cathedral acquisition. I think he probably read the writing on the wall and decided to take his money and start a new company as quickly as possible. This reminds me of Udvar Hazy of ILFC who started Air Lease. Hazy started a competing company across the street from ILFC and hired ILFC's management. Ethical? No. But as an investor you can make a lot of money with a good entrepreneur with a chip on their shoulder. Keep in mind at least in the previous example that a lot of value still existed once Hazy left ILFC; take a look at Air Cap Holdings. I believe AL is a good investment as well.

 

Thanks for your good thoughts, Ross.

 

I agree with your thinking. Seeing him monetizing his venture to the tune of 100 million, it might be a combination of issues. Being independently wealthy means he does not have to put up with things he does not like/ agrees with. Maybe he misjudged board dynamics?

 

Similarly to you and other posters, I am still puzzled by the way and timing of his departure.

 

;)

 

 

[twacowfca]

It's good to be back on the board after travel and bicycle treking.

 

Lancashire is having a great year. This becomes clear after normalizing their reported earnings.  Earnings would have been over $65M this quarter after deducting $20M in charges associated with Richard's retirement. Adding back one off charges in Q1 including the sizeable amortization charge for  the finite life asset from the Cathedral acquisition, lifts adjusted H1 earnings above $140M or above $150M if the late filed claim associated with Q4 2013 is also backed out.

 

The solid team that Richard built has been calling their own plays during the last two years as Richard realized it would be foolish to micromanage them and spent time on the sidelines while they ran the ball.  The Lancashire team continues to do what they have done so very well.  :)

Looks like Brindle sold out of all his shares - from insurance insider:

 

Sold all his shares?? Really??

 

Ok… So, I have a question for all of you who go on repeating Biglari is unethical: how do you judge Mr. Brindle's behavior?

No… actually I have two questions for you. And the second one is: would you invest with Mr. Brindle in a new company, were he to found one in the not too distant future?

 

My answer to the first question is: I don’t judge Mr. Brindle’s behavior.

My answer to the second question is: of course I would, if I think I understand how and why he will be successful with his new company, like he has been in the past.

 

Cheers,

 

Gio

 

Whatever happened, a founding CEO up and leaving a company inside a month doesn't smell right.

 

1- He planned on leaving but didn't disclose this to shareholder which I would judge to be unethical. If he starts a competing company inside of a year, he is extremely unethical.

 

2- He knew at the completion of the Cathedral acquisition he would forced out and didn't want the headlines. If this was the case, Brindle made a mistake that cost him his job with his acquisition. He still could have arranged for a more orderly departure, which would have been the ethical thing to do by his shareholders, but in the end it is a judgement call. 

 

3- He was forced out and could not arrange for an orderly departure. What happened to cause him to leave in that fashion? Was it something he did? Something the company did that he didn't want to hurt his reputation? Both would be unethical. 

 

If I thought 1 or 3 were the case, I would not invest with Brindle.

 

I tend to believe it was number 2 because of the timing with the Cathedral acquisition. I think he probably read the writing on the wall and decided to take his money and start a new company as quickly as possible. This reminds me of Udvar Hazy of ILFC who started Air Lease. Hazy started a competing company across the street from ILFC and hired ILFC's management. Ethical? No. But as an investor you can make a lot of money with a good entrepreneur with a chip on their shoulder. Keep in mind at least in the previous example that a lot of value still existed once Hazy left ILFC; take a look at Air Cap Holdings. I believe AL is a good investment as well.

 

Thanks for your good thoughts, Ross.

 

I agree with your thinking. Seeing him monetizing his venture to the tune of 100 million, it might be a combination of issues. Being independently wealthy means he does not have to put up with things he does not like/ agrees with. Maybe he misjudged board dynamics?

 

Similarly to you and other posters, I am still puzzled by the way and timing of his departure.

 

;)

 

Jonny, Alex, and Charlie have told it like it is: "Richard is Richard".

 

Having finished playing the game , he picked up his marbles and went home.  :)

 

This situation reminds me of a story one of Warren's jewelry retailers told about getting a critical call from Warren a few years ago.  Warren asked why he was absent from the office in the weeks before Christmas when that company had entered the the make or break season when it made most of its annual sales. 

 

The CEO replied that he had done all he could do by that time. Inventory had been ordered and delivered to hundreds of units, and advertising had been placed.  After that, it was up to the store managers to roll up their sleeves and put in 80 hour weeks to maximize sales before Christmas.  The CEO explained that bothering the managers during that critical sales period would not be helpful and in fact harmful by taking them away from what was critical for the company's success. 

 

The CEO went on to tell Warren that his period of working very long hours to see that the stores had everything they needed had ended when the Christmas sales season began.  At that point in time, he was available by cell phone if needed, and visited many of their stores to see how things were going, but otherwise got out of the managers way.

 

I suspect that Richard was in much the same situation.  Having put in very long hours to build the company up to a very high level of performance,  it was no longer appropriate to micromanage them, but merely to be available if needed. Warren and some private equity owners would understand when being hands off is appropriate.  However, that 's not what's expected from the CEO  of a public company.

 

Richard doesn't like being in a fishbowl.  I would be surprised if he jumped back into the public arena.  He would rather work for an understanding Private Equity group if he gets bored with his current interests than face analysts and reporters with their short term focus.

[giofranchi]

Welcome back TWACOWFCA. Missed your comments.

 

"The solid team that Richard built has been calling their own plays during the last two years as Richard realized it would be foolish to micromanage them and spent time on the sidelines while they ran the ball.  The Lancashire team continues to do what they have done so very well."

 

I agree with your statement here.

 

+1!!

 

And it is great to hear from you again, twacowfca! :)

 

Gio