BH - Biglari Holdings

[DanielGMask]

"The Incentive Agreement was amended on March 26, 2019 to remove the $10,000,000 annual limitation on Mr. Biglari’s incentive compensation and the requirement of Mr. Biglari to use 30% of his incentive payments to purchase shares of the Company"

 

No more limits on his compensation.  It's almost like he wanted to gain control of the company only to fleece the outside shareholders.  No one saw this coming. If only there was a way this could have been predicted.

 

 

You're kidding right! This is an extract from one of my posts from 2015:

 

 

 

 

I don't like the guy, I don't like the incentives the way they are and I think that when management's trustworthiness and the incentives are not perfect (yep, perfect), I should not risk my money. I'd rather pass on a good thing than get on the wrong train. Good luck to those who think this is the beginning of an amazing story as that of Buffett, my guess is that you are about to get dissapointed.

 

Yes forgot smiley face

 

I thought so!

[Gregmal]

Theoretically, if you are gifted enough to at least at some point potentially be heralded as "the next Buffett", what would be easier, milking the shit out of that and making a fortune taking advantage of it, or actually having to live up to it?

[Spekulatius]

The cynic in me who mimics too closely the writings of Buffet with annual reports using a plain white background and Times New Roman Font is probably more likely a clever marketer than a great investor.

 

Great investors who will make many people rich are probably still around, but they won’t imitate Buffet and probably not even his methods, much less Mimik his style.

[vinod1]

 

I believe Biglari's pay is capped at $10 million.  As the equity base rises in absolute dollar amounts, the returns to equity shareholders will come closer to the actual increase in BV.

 

Here's the quote from the incentive agreement: "[P]rovided that in no event shall the Incentive Compensation Amount payable to the

Executive with respect to any fiscal year exceed $10 million."

 

I would expect Mr. BigLiar to increase the cap as the share holders equity increases. 

 

Vinod

 

Predictable surprise :)

[shalab]

+1

 

Biglari did a great marketing job.

 

Next step, transferring the BH shares into his own name.

 

The cynic in me who mimics too closely the writings of Buffet with annual reports using a plain white background and Times new Roman Fond is probably more a clever marketed than a great investor.

 

Great investors who will make many people rich are probably still around, but they won’t imitate Buffet and probably not even his methods, much less Mimik his style.

[abitofvalue]

 

I was curious - anyone know what the catch is here? Invest 10k to get franchise rights and guaranteed 100k in yr 1? Yes you have to work there but i suspect there is more to it than this.  What's the catch and why would SNS do this?

 

http://www.steaknshakefranchise.com/

 

[arcticfox]

I have not run the numbers but my guess would be the following.

 

Transitions the company to "asset light " fee generating business which has faster growth and lower cost than company owned stores. Higher multiple

 

I expect that if the store does well, the company does very well and if the store does ok or just ok, they do fine and the franchise partner is working quite hard for minimum wage. Believe the model works well with high volume stores like chick fil a and probably not very well with units doing $1mm.

[awindenberger]

 

I was curious - anyone know what the catch is here? Invest 10k to get franchise rights and guaranteed 100k in yr 1? Yes you have to work there but i suspect there is more to it than this.  What's the catch and why would SNS do this?

 

http://www.steaknshakefranchise.com/

 

The $100k minimum compensation for the first year is interesting. That certainly should make it attractive for reasonable operators to get involved. My guess is that this allows BH to pick from a bigger pool of better qualified candidates, which they can assign to reasonably performing stores and hopefully see improvements.

[Orchard]

There is a *. Franchisors have a long history of making big statements and burying the reality in a footnote.

[JJR]

It took me a few days to read all the ​posts on this thread. ​ 

 

A few years ago, giofranchi wrote ,"20% is not a number I invented...it is simply Biglari's track record since the inception of the Lion Fund.  Biglari generated great results."

 

giofranchi and others used a lot of bandwidth defending Sardar Biglari, and since I haven't seen any recent posts from him, I assume he, like many other BH shareholders finally threw in the towel.

 

Sardar Biglari's carried interest (performance fee) is not accounted for in his TLF Partnership Letters.  His stated performance record is also not a GAAP-approved standard, but since he started reporting his results that way, he decided to just continue.  In the early years, he claimed 20% annualized returns, but they were not 'net' returns to his LP's.

 

I've never seen a person's writings contrast so much with his actions.  SB talks a great game, but he's ethically-challenged.  BH shareholders also originally thought he was the second coming of Warren Buffett, and slowly but surely almost all have abandoned him.  This thread is a time capsule in how shareholder attitudes have changed.  He is no longer referred to in reverential terms, but many now consider him to be a delusional psychopath.  The record is very clear, SB is a greedy narcissist but he's also smart in a cunning sort of way (on some future date, I'll spell out how I think it all eventually plays out.)

 

He now repeats the following in every letter,"Judge our results against the S&P 500 — our benchmark — over a period of no less than ten years."

 

Unbelievably, even to this day, TLF partners have been told that the Partnership has significantly outperformed the S&P 500 over the life of the fund by a whopping 3.8 percentage points annually (a life-of-fund cumulative return that is 2.66x the S&P 500).  They have heard that outperformance refrain year after year.  They have also heard what really matters is intrinsic value, and not the market's mark-to-market assessment of value.  That may very well work for a few years when stock prices aren't cooperating, but after a certain period of time, TLF investors also want to see that intrinsic value reflected in their statements, which has not been the case.

 

Like Lion partners, in the 2018 letter, BH shareholders are also told the same thing.

 

"To judge how one will behave in the future, it is logical to evaluate how one has behaved in the past. After all, a reputation is earned, not bought.  Over the past decade we believe Biglari Holdings’ gain in per-share intrinsic value has far outstripped the S&P 500."

 

SB appears tone deaf to his actual past poor behavior and how that behavior has impacted the share price of BH.  And like the Lion LP's, at some point BH shareholders want to see the 'intrinsic value' reflected in the BH stock price.

 

It's important to recognize who the original investors in TLF are.  SB stated that he and his wife had virtually their entire net worth in The Lion Fund.  TLF also included his mother, father, uncle, father-in-law, mother-in-law, friends of his, and friends of his relatives.  So how have they done?

 

Well let's look at a few time periods, with emphasis on the longer term record.  They are adjusted in 2 major ways compared to how the results are reported to TLF LP's.  First, I eliminated the 50.8% return claimed in the year 2000 in the official record.  SB started with $85,000 in that year and registered TLF on Oct 26th, 2000.  TLF did not officially commence operations until Jan 2001, so I think it silly to include the year 2000 in his long term performance numbers.  In the very early years he levered tiny capital, but the Partnership didn't officially start until 2001.

 

The second adjustment is what LP's actually earned in the fund, so these are 'net' numbers, what LP's received every year, which adjusts for all expenses including SB's carried interest.

 

The 18-year life-of-fund performance (2001-2018) produced a 4.1% net annualized return, under-performing the S&P 500. 

 

The 10-year record produced 2.1% net to LP's.  And in case anyone thinks these time periods are cherry picked, the 10-year record started after the GFC, when he put up a 52.6% net return in 2009.  If you look at the 11-year record which included 2008, LP's lost money in that time period and annualized -1.1%.

 

The 5-year TLF record is an abysmal -13.4% annualized.  Someone who invested $1M at the start of 2014, had less than half that amount at the end of 2018.  And if one uses a money-weighted average, with the last 5 years having far more AUM then the first 5 years, he has badly underperformed.

 

He went from a decent long term record to a poor record primarily because of last year where he lost 46.2% in TLF. 

 

TLF partners and BH shareholders haven't done well because of the stock price of BH.  It's understandable that most investors want nothing to do with SB, so there is little interest in BH, notwithstanding the value inherent in that company.    When you've been screwed over so many times, nobody wants to be involved with a greedy CEO who has gone off the rails and is all about enriching himself.  Last year, he eliminated the $10M cap on his incentive bonus for the operating side of the business, so now there are no limits on his carried interest for both the portfolio and operations.

 

SB has coasted on his putative performance.  BH shareholders and Lion partners have reluctantly put up with his arrogance as long as they believed he was delivering the goods.  They have since voted with their feet because you can't spend 'intrinsic value'. His shareholder-unfriendly actions are the reason the BH stock price has tanked. 

 

Sardar Biglari has an ego the size of Texas, however, and it has to stick in his craw how badly he has performed over every time period.  The annual meeting may provide more fireworks than usual.

[gfp]

Excellent post - couldn't agree more.  The company is worth more dead than alive.  CEO is delusional

[Cevian]

JJR, great post.

 

I have to admit that I was one of those early adherents. I admit that I made a mistake, lost money and got out. I learned a valuable lesson which I hope to prevent in the future: there is only one Buffett...stop chasing or looking for "the next Buffett". Also, "intelligent, energy, integrity". If someone has the first two but doesn't have the last one, you lose.

 

This would make for a great case study (or book) though on how someone who started with x dollars or capital, ended up controlling 51% of a company with a s/h equity of $570mil without really forcing anyone. It may point to some of the inherent flaws in the system. Since you have taken some time to analyse the situation, I wonder if you have any thoughts or insight on this point?

[shalab]

Great post!

 

The annual letter is a great marketing material to sell the story of Biglari. As some fund manager(s) have mentioned, parlaying Buffett quotes is extremely profitable.

 

Investment management is a very profitable business, even with the 4% return noted below; the actual return to the shareholder would be lower because of taxes. So their effective return may have been 1-2% or lower.

 

It took me a few days to read all the ​posts on this thread. ​ 

 

A few years ago, giofranchi wrote ,"20% is not a number I invented...it is simply Biglari's track record since the inception of the Lion Fund.  Biglari generated great results."

 

giofranchi and others used a lot of bandwidth defending Sardar Biglari, and since I haven't seen any recent posts from him, I assume he, like many other BH shareholders finally threw in the towel.

 

Sardar Biglari's carried interest (performance fee) is not accounted for in his TLF Partnership Letters.  His stated performance record is also not a GAAP-approved standard, but since he started reporting his results that way, he decided to just continue.  In the early years, he claimed 20% annualized returns, but they were not 'net' returns to his LP's.

 

I've never seen a person's writings contrast so much with his actions.  SB talks a great game, but he's ethically-challenged.  BH shareholders also originally thought he was the second coming of Warren Buffett, and slowly but surely almost all have abandoned him.  This thread is a time capsule in how shareholder attitudes have changed.  He is no longer referred to in reverential terms, but many now consider him to be a delusional psychopath.  The record is very clear, SB is a greedy narcissist but he's also smart in a cunning sort of way (on some future date, I'll spell out how I think it all eventually plays out.)

 

He now repeats the following in every letter,"Judge our results against the S&P 500 — our benchmark — over a period of no less than ten years."

 

Unbelievably, even to this day, TLF partners have been told that the Partnership has significantly outperformed the S&P 500 over the life of the fund by a whopping 3.8 percentage points annually (a life-of-fund cumulative return that is 2.66x the S&P 500).  They have heard that outperformance refrain year after year.  They have also heard what really matters is intrinsic value, and not the market's mark-to-market assessment of value.  That may very well work for a few years when stock prices aren't cooperating, but after a certain period of time, TLF investors also want to see that intrinsic value reflected in their statements, which has not been the case.

 

Like Lion partners, in the 2018 letter, BH shareholders are also told the same thing.

 

"To judge how one will behave in the future, it is logical to evaluate how one has behaved in the past. After all, a reputation is earned, not bought.  Over the past decade we believe Biglari Holdings’ gain in per-share intrinsic value has far outstripped the S&P 500."

 

SB appears tone deaf to his actual past poor behavior and how that behavior has impacted the share price of BH.  And like the Lion LP's, at some point BH shareholders want to see the 'intrinsic value' reflected in the BH stock price.

 

It's important to recognize who the original investors in TLF are.  SB stated that he and his wife had virtually their entire net worth in The Lion Fund.  TLF also included his mother, father, uncle, father-in-law, mother-in-law, friends of his, and friends of his relatives.  So how have they done?

 

Well let's look at a few time periods, with emphasis on the longer term record.  They are adjusted in 2 major ways compared to how the results are reported to TLF LP's.  First, I eliminated the 50.8% return claimed in the year 2000 in the official record.  SB started with $85,000 in that year and registered TLF on Oct 26th, 2000.  TLF did not officially commence operations until Jan 2001, so I think it silly to include the year 2000 in his long term performance numbers.  In the very early years he levered tiny capital, but the Partnership didn't officially start until 2001.

 

The second adjustment is what LP's actually earned in the fund, so these are 'net' numbers, what LP's received every year, which adjusts for all expenses including SB's carried interest.

 

The 18-year life-of-fund performance (2001-2018) produced a 4.1% net annualized return, under-performing the S&P 500. 

 

The 10-year record produced 2.1% net to LP's.  And in case anyone thinks these time periods are cherry picked, the 10-year record started after the GFC, when he put up a 52.6% net return in 2009.  If you look at the 11-year record which included 2008, LP's lost money in that time period and annualized -1.1%.

 

The 5-year TLF record is an abysmal -13.4% annualized.  Someone who invested $1M at the start of 2014, had less than half that amount at the end of 2018.  And if one uses a money-weighted average, with the last 5 years having far more AUM then the first 5 years, he has badly underperformed.

 

He went from a decent long term record to a poor record primarily because of last year where he lost 46.2% in TLF. 

 

TLF partners and BH shareholders haven't done well because of the stock price of BH.  It's understandable that most investors want nothing to do with SB, so there is little interest in BH, notwithstanding the value inherent in that company.    When you've been screwed over so many times, nobody wants to be involved with a greedy CEO who has gone off the rails and is all about enriching himself.  Last year, he eliminated the $10M cap on his incentive bonus for the operating side of the business, so now there are no limits on his carried interest for both the portfolio and operations.

 

SB has coasted on his putative performance.  BH shareholders and Lion partners have reluctantly put up with his arrogance as long as they believed he was delivering the goods.  They have since voted with their feet because you can't spend 'intrinsic value'. His shareholder-unfriendly actions are the reason the BH stock price has tanked. 

 

Sardar Biglari has an ego the size of Texas, however, and it has to stick in his craw how badly he has performed over every time period.  The annual meeting may provide more fireworks than usual.

[muscleman]

I used to be a BH shareholder but I got out after I realized what a mistake I made buying this sucker.

 

[Spekulatius]

JJR, great post.

 

I have to admit that I was one of those early adherents. I admit that I made a mistake, lost money and got out. I learned a valuable lesson which I hope to prevent in the future: there is only one Buffett...stop chasing or looking for "the next Buffett". Also, "intelligent, energy, integrity". If someone has the first two but doesn't have the last one, you lose.

 

This would make for a great case study (or book) though on how someone who started with x dollars or capital, ended up controlling 51% of a company with a s/h equity of $570mil without really forcing anyone. It may point to some of the inherent flaws in the system. Since you have taken some time to analyse the situation, I wonder if you have any thoughts or insight on this point?

 

Yep, there is only one. People probably should pin this on the wall. The second comings PDH, FFH, SYTE and BOMN probably won’t work out.

 

The issue with investing as an LP and investment fund is the 2/20 (or whatever it is) carry. In the Long run, it will lead to a huge underperformance. I have seen calculations where if Buffet had chosen 2/20, the returns for LP would be so far less shareholders, it isn’t even funny and Buffet would own the majority of BRK by a wide margin. That’s another reason why BRK is great, it’s a very low cost way to invest.

 

There will be many great managers out there, which will perform well in he future, but I am willing to bet that they look like the second coming of Buffet, or BRK - they will do it in their own way.

[NBL0303]

 

He went from a decent long term record to a poor record primarily because of last year where he lost 46.2% in TLF. 

 

The 18-year life-of-fund performance (2001-2018) produced a 4.1% net annualized return, under-performing the S&P 500. 

 

 

Thank you for posting - really interesting post. I was especially interested to know the Lion Fund I's performance in 2018 - so thank you for including that. How did you find the exact return? I had tried to estimate it - but unlike in previous years when the Lion Fund I gets out - I haven't seen the letter and so did not know the exact return. Have you seen the letter? I'd be really interested in knowing what he said to his partners after such a poor year for the fund?

 

One of the enduring mysteries of this is - who is still investing in the Lion Fund I? It has been baffling to me for a while - why outside investors would invest in Lion Fund I. Could the only outside investors that are left just be those relatives that you mentioned?

[intothebreach]

JJR,

 

If after reading the whole thread you still have appetite for more, you may want to read the Archives section of this forum which mostly covers earlier events related to the same story including, if memory serves, the change of name.

 

Back in 2015, I posted what follows in this thread but received no response, so am not any better informed on this than I was back then. I repost in case you find it useful to your analysis:

 

Some of the members of this board may be able to help me understand something with regard to Biglari's investment performance in the early years of the Lion Fund. The 2003 AR of the LF presents annual performance as follows (consistent with 2001 and 2002 AR for the applicable years):

Year 2001 : 14.0%

Year 2002 : (7.8%)

Year 2003 : 22.0%

 

Then in 2006 and 2007, the results for these same years appear as:

Year 2001 : 30.4%

Year 2002 : (10.1%)

Year 2003 : 28.0%

 

Now I would expect this change to have been explained in either the 2004 or 2005 AR, to which I unfortunately do not have access. The only information I could find is the following language at the bottom of the results page :

 

Starting in 2001, performance was calculated for the partnership as a whole and has been measured by dividing the total increase or decrease in net assets, after expenses, into the weighted average partners’ capital measured at the end of each month. The calculation of returns for the current year as required by GAAP was modified. Nonetheless, we have continued to present our returns consistent with the methodology used in the past. [emphasis added]

 

I suspect the change to have been a required correction due to GAAP or similar, but the last phrase of the above paragraph throws me off.

 

Thanks in advance!

[shalab]

You can add PGNT to this list also.

 

 

 

...

 

Yep, there is only one. People probably should pin this on the wall. The second comings PDH, FFH, SYTE and BOMN probably won’t work out.

 

...

[Parsad]

You can add PGNT to this list also.

 

 

 

...

 

Yep, there is only one. People probably should pin this on the wall. The second comings PDH, FFH, SYTE and BOMN probably won’t work out.

 

...

 

Feel free to throw me and everyone else under the bus, but you jackasses should probably remove FFH from that list...Prem's given you nearly 35 years of outperformance. 

 

Yeah there have been periods where he has under performed...even long stretches...but he's walked the walk and talked the talk better than anyone else other than Buffett.  Even Buffett had a tough time the last few years, and he's as close to perfect in the industry as anyone has ever seen!

 

So if your bar is Buffett and only Buffett, then that is a statistical population of one!  If your bar is ethical, honest investment company CEO's that you can trust your money with and have a good chance of outperforming for the long-term with interest aligned, it may be nominally higher and Prem would be in that group.  Cheers!

[EricSchleien]

Well said, Parsad!

 

You can add PGNT to this list also.

 

 

 

...

 

Yep, there is only one. People probably should pin this on the wall. The second comings PDH, FFH, SYTE and BOMN probably won’t work out.

 

...

 

Feel free to throw me and everyone else under the bus, but you jackasses should probably remove FFH from that list...Prem's given you nearly 35 years of outperformance. 

 

Yeah there have been periods where he has under performed...even long stretches...but he's walked the walk and talked the talk better than anyone else other than Buffett.  Even Buffett had a tough time the last few years, and he's as close to perfect in the industry as anyone has ever seen!

 

So if your bar is Buffett and only Buffett, then that is a statistical population of one!  If your bar is ethical, honest investment company CEO's that you can trust your money with and have a good chance of outperforming for the long-term with interest aligned, it may be nominally higher and Prem would be in that group.  Cheers!

[JJR]

"This would make for a great case study (or book) though on how someone who started with x dollars or capital, ended up controlling 51% of a company with a s/h equity of $570mil without really forcing anyone. It may point to some of the inherent flaws in the system. Since you have taken some time to analyse the situation, I wonder if you have any thoughts or insight on this point?"

 

 

Cevian, I've never seen anything like this before.  Really, I think it's unique in the investment world.  SB has skirted the rules and I found what he has done to be totally unethical and at least in my eyes, borderline illegal.  He walks a very fine line and the language he uses belie his actions.  It would be comical if it wasn't so sad, as real money has been lost here.  Aside from the incentive compensation scheme, I found the $8M+ service payments between BH and Biglari Capital more than a little excessive and they are destined to go higher.  How much does it cost to hold BH and CBRL in the Lion portfolios? 

 

Having said the above, I also could not help but be perversely impressed in how this pipsqueak went from nothing to growing something quite sizable.  It was like watching a bank robbery in slow motion, as he carted off the loot.

 

 

 

 

"Have you seen the letter? I'd be really interested in knowing what he said to his partners after such a poor year for the fund?  One of the enduring mysteries of this is - who is still investing in the Lion Fund I? It has been baffling to me for a while - why outside investors would invest in Lion Fund I. Could the only outside investors that are left just be those relatives that you mentioned?"

 

 

NBL, I have seen the letter.  I invest in a lot of special situations and I saw a BH post last year that grabbed my attention, so it went on my watchlist and I became increasingly more interested as the price tanked throughout the year. 

 

I've had no dealings with SB, but 4 friends have bumped into him at one time or another.  My only tangential dealing was a few years ago when he did a rights offering but used sloppy language in the prospectus.  I called several of my brokers and eventually their legal departments and they agreed with me that I only had to exercise one right vs. five to take part in the offering.  It was the first time I looked into the guy and felt obvious pleasure when friends and family took advantage in many accounts.  It was small money overall and a friend mentioned this move to SB at the Berkshire meeting and he was not at all amused and mumbled something about it not being possible.

 

He pretty much told Lion LP's the same as he told BH shareholders.  We are doing great, intrinsic value is up, the BH market price is silly, then quotes Buffett in how he dealt with Berkshire (the textile mill) when price and value diverged.  WEB did not use Berkshire's stock price when assessing value for his partners, so partners adding and withdrawing received fair value according to Buffett's assessment as opposed to the market price of Berkshire. 

 

BH shareholders own the majority of TLF.  They owned more at the start of 2018 than at the end because BH stock price tanked far more than other holdings in the fund.  SB, his family, and his friends own most of the fund that BH does not own.  SB has both GP and LP interests.

 

I've wondered what a Biglari get-together looks like after the family has read their statements.  Does dad say, " Sardar, I know we are doing great because you keep telling us how great we are doing, but my statements tell me otherwise and it's been happening year after year with last year being a doozy."  Sardar replies, "Dad, intrinsic value is way up, so don't worry about it, you have to look at the long term and 18 years is just too short of a period of time, but to keep you happy, I'm increasing your pay at the company by what you lost on paper last year."

 

Lion LP's are shown every year examples that they are paying much less than what a typical asset manager charges.  He makes a very big deal out of the fact there are no management fees.  Course, TLF's ownership of BH is very expensive, not only when it loses more than half of its value in a year like last year, but even when it does well.  TLF partners are paying their share of the incentive fee at the operating level at BH, in addition to paying the 25% carried interest in the fund when it produces 6% over the HWM.  In addition, TLF has invested in Lion II, so inscrutable hidden fees are a fact of life in TLF. 

 

 

 

 

"If after reading the whole thread you still have appetite for more, you may want to read the Archives section of this forum which mostly covers earlier events related to the same story including, if memory serves, the change of name."

 

intothebreach, I'm new here, can you tell me a bit more about these archives and how I can access them.

 

Thanks

[Liberty]

You can add PGNT to this list also.

 

 

 

...

 

Yep, there is only one. People probably should pin this on the wall. The second comings PDH, FFH, SYTE and BOMN probably won’t work out.

 

...

 

Feel free to throw me and everyone else under the bus, but you jackasses should probably remove FFH from that list...Prem's given you nearly 35 years of outperformance. 

 

Yeah there have been periods where he has under performed...even long stretches...but he's walked the walk and talked the talk better than anyone else other than Buffett.  Even Buffett had a tough time the last few years, and he's as close to perfect in the industry as anyone has ever seen!

 

So if your bar is Buffett and only Buffett, then that is a statistical population of one!  If your bar is ethical, honest investment company CEO's that you can trust your money with and have a good chance of outperforming for the long-term with interest aligned, it may be nominally higher and Prem would be in that group.  Cheers!

 

"It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat."

[Gregmal]

The above quote from Liberty is great and all, but the perspective really differs depending upon where you are in these "projects"...

 

If you are the guy "getting to play Buffett" for a bit, and getting paid to do so, is this not like the greatest thing ever?

 

On the other hand, if you are the sucker(shareholder) funding this adventure with your capital... well, I'm not so sure they are typically the best investments.

 

This is just a classic case of an investor needing to do thorough DD or otherwise just stick to indexes or whatever. Feeling bad for the guys running these is like feeling bad for the fringe NHLer. Dude is living the fucking dream. Running one of these has to kind of be the geek equivalent of what it's like being a jock who dreams of playing pro sports. And then makes it. If you can pull it off, good for you. If you are an investor, think with your head, not your heart. Simple as that.

[intothebreach]

 

intothebreach, I'm new here, can you tell me a bit more about these archives and how I can access them.

 

Thanks

 

Sure thing: It’s easy enough, just go up one level. The Archives is a section at the same level as Investment Ideas or General Discussion.

[Spekulatius]

You can add PGNT to this list also.

 

 

 

...

 

Yep, there is only one. People probably should pin this on the wall. The second comings PDH, FFH, SYTE and BOMN probably won’t work out.

 

...

 

Feel free to throw me and everyone else under the bus, but you jackasses should probably remove FFH from that list...Prem's given you nearly 35 years of outperformance. 

 

Yeah there have been periods where he has under performed...even long stretches...but he's walked the walk and talked the talk better than anyone else other than Buffett.  Even Buffett had a tough time the last few years, and he's as close to perfect in the industry as anyone has ever seen!

 

So if your bar is Buffett and only Buffett, then that is a statistical population of one!  If your bar is ethical, honest investment company CEO's that you can trust your money with and have a good chance of outperforming for the long-term with interest aligned, it may be nominally higher and Prem would be in that group.  Cheers!

 

"It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat."