BH - Biglari Holdings

[OracleofCarolina]

Sanjeev,

 

You're absolutely right..maybe we should buy the domain

www.crackerbiglari.com....lol

[slkiel]

I thought the letter was pretty standard fare for an activist. Nothing unusual. We shouldnt hold him to a Buffett standard. He's done a very good job as an activist so far. Yeah, he rubs people the wrong way, but I don't think he deserves criticism for this one.

[MYDemaray]

 

I can't believe my first post on the board will be about this, but...

 

 

haha -- welcome aboard

[giofranchi]

I don’t understand why you all are so hard and negative on Mr. Sardar Biglari. Personally, I think he is a very shrewd businessman. He has structured BH exactly the way I have structured my firm, sometimes I marvel because what he says and writes about BH applies so well to the way I also try to manage my firm! There is a difference, though: despite being just a little older than me, he has already amassed a lot of resources, was able to get control of a business much bigger and much more profitable than mine (fast food vs. civil engineering), and is able to acquire stakes in public companies large enough to make him the controlling shareholder! And good for him! Given the current environment, I like control value investing very much. If I could, I would do it too! It helps mitigate market risk very effectively. Ok, while trying to get control of something, you certainly may run the risk of looking unfriendly or not being very funny… But that’s simply how it works: have you ever thought that Mr. Carl Ichan is a friendly person?! I don’t think so. But is he a great investor? Of course! Mr. Sardar Biglari has already proven himself, is still very young, and I wish him to go on compounding capital at satisfying rates of return for a very long time.

 

giofranchi

[ragnarisapirate]

I don’t understand why you all are so hard and negative on Mr. Sardar Biglari. Personally, I think he is a very shrewd businessman. He has structured BH exactly the way I have structured my firm, sometimes I marvel because what he says and writes about BH applies so well to the way I also try to manage my firm! There is a difference, though: despite being just a little older than me, he has already amassed a lot of resources, was able to get control of a business much bigger and much more profitable than mine (fast food vs. civil engineering), and is able to acquire stakes in public companies large enough to make him the controlling shareholder! And good for him! Given the current environment, I like control value investing very much. If I could, I would do it too! It helps mitigate market risk very effectively. Ok, while trying to get control of something, you certainly may run the risk of looking unfriendly or not being very funny… But that’s simply how it works: have you ever thought that Mr. Carl Ichan is a friendly person?! I don’t think so. But is he a great investor? Of course! Mr. Sardar Biglari has already proven himself, is still very young, and I wish him to go on compounding capital at satisfying rates of return for a very long time.

 

giofranchi

 

I think that the people that have issues with him, either didn't see or felt that they were misled about what would eventually happen with SNS. Then there was the whole name change thing... Personally, I see both sides of it, but tend to think about as you have outlined in regard to the whole matter.

 

My only gripe was that I thought he would be willing to work for close to free profit or not (he about was working for free for a while), which is why I sold my shares after the pay package went through. After that, my shares felt pretty close to fully valued, so I sold them and moved on to what I thoguth were greener pastures. Nothing personal though.

[ragnarisapirate]

http://finance.yahoo.com/news/biglari-holdings-responds-cracker-barrels-225800934.html

 

You guys are going to love Biglari's response....ah man, this guy cracks me up!

 

But he raises good points. I mean, owning over 17% of a company's stock is a pretty good reason to get a board seat....

 

Yes, I would have to agree.  He does douchy things, but he's correct here.  They should have corrected the credentials, and he should get a board seat.  But the problem is...you give him one seat, and that's it...he's going to eventually whittle away the board and take over the company.  It'll be called "Cracker Biglari" shortly thereafter.  ;D  Cheers!

 

I actually laughed out loud at this. Thanks for that!

 

We should start an intrade market and game show for this. Call it "The Biglari Games" or something like that and have various cameras in the board rooms that he is going activist on. Then, have the confession booths like in all the reality shows. It would be entertaining, educational, and enriching.

 

Biglari would likely be an expensive bet- the guy is impressive and I don't think many would want to bet against him.

[giofranchi]

After that, my shares felt pretty close to fully valued, so I sold them and moved on to what I thoguth were greener pastures. Nothing personal though.

 

The valuation of BH goes along the same line as the valuation of LRE. Mr. Biglari, just like Mr. Brindle, is compounding at 20% per annum. If he can go on outperforming, 1,3xBV is absolutely not a high price to pay. BRK was trading at 1,3xBV in the ‘70s, and it is almost trading at that level even today. So, a person, who had invested in BRK at 1,3xBV in the ’70, would have achieved a compounded annual return equal to the CAGR in BRK’s book value per share. The real question is: will Mr. Biglari go on outperforming for a very long time? Imo:

1) He has a proven track record,

2) He is still very young and is very driven,

3) BH’s capital is still relatively small,

4) Control value investing is the way to go,

5) Selling franchises of a fast food business is a wonderful way to keep generating cash.

 

giofranchi

 

[racemize]

After that, my shares felt pretty close to fully valued, so I sold them and moved on to what I thoguth were greener pastures. Nothing personal though.

 

The valuation of BH goes along the same line as the valuation of LRE. Mr. Biglari, just like Mr. Brindle, is compounding at 20% per annum. If he can go on outperforming, 1,3xBV is absolutely not a high price to pay. BRK was trading at 1,3xBV in the ‘70s, and it is almost trading at that level even today. So, a person, who had invested in BRK at 1,3xBV in the ’70, would have achieved a compounded annual return equal to the CAGR in BRK’s book value per share. The real question is: will Mr. Biglari go on outperforming for a very long time? Imo:

1) He has a proven track record,

2) He is still very young and is very driven,

3) BH’s capital is still relatively small,

4) Control value investing is the way to go,

5) Selling franchises of a fast food business is a wonderful way to keep generating cash.

 

giofranchi

 

Seems like he'll have trouble compounding BVPS at 20% for shareholders if he's taking significant amounts of book though, right?

[giofranchi]

Seems like he'll have trouble compounding BVPS at 20% for shareholders if he's taking significant amounts of book though, right?

 

Maybe… but if I look at page 4 of the most recent 10-q (Q3 2012), I find that total equity on July 6, 2011 was $275,206,000, while on July 4, 2012 it was $332,186,000, a $56,980,000 increase, which is 20,7% of total equity value on July 6, 2011. Pay for performance is fine with me! It is exactly what I do every day at my firm too. If and when increase in equity value falters, then it will be an entirely different situation. But my guess is, if that really comes to pass, it will be for entirely different reasons than Mr. Biglari’s compensation…

 

giofranchi

[bargainman]

First, the reason people are so visceral towards Biglari these days is because of expectations, and perceived betrayal (although that might be too strong a word).  It might interest you to know there was a time where, in addition to the sacred BRK and FFH sections on this message board, there was a, then named, Steak n Shake section!  Then Biglari could do no wrong!  But there were signs of course.  There were signs that he was opinionated and arrogant, that he would listen to no one but himself, that he, in his own words was 'supremely insensitive to criticism', or advice it would seem.  So the expectation then was that he was following in the steps of BRK, Buffet, Watsa, that he was going to get rich *with* the shareholders, not *off* the share holders.  He said he would not take any money from SNS shareholders, but then he did!  Not only that, he took a lot of money!  So the sense was that he betrayed those who thought he was the next coming of Buffet, and that's why some are so negative.  Personally I always saw the signs, and never bought into his 'next Buffet' persona.  He always seemed like a smart, ambitious, arrogant prick who would do things his way, everyone else be damned, but still with a keen understanding of business, investing and capital allocation well beyond his years.  As such I still own some BH and will hold until he reverse splits me out like he almost did a while back!  Oh yeah the reverse splits!  That was something else that pissed people off :-)

 

Anyway now that we're done with the history...  Remember his compensation package.. Last I remember he's paid 900K a year.  Also he takes 25% off the top of book value growth after the 6% hurdle.  So if he does increase book value by 20%, he gets 20-6=14* (0.25) = 3.5% of that book value into his wallet.  Meaning that the other shareholder(us) only gets 20-3.5% = 16.5% book value growth.  That's not bad, but still that's a pretty big headwind for the rest of us, and very different from investing in BRK when it was small since that would have been unencumbered by the headwind.  It sure takes a lot off of the present fair value calculation that's for sure...

[Greg]

A major issue that I see here is that when the incentive compensation agreement was approved the stated book value of the company was about $250 million, I think that the economic value exceeded $650 million. The difference was appreciation of assets over decades, a lot of it because of inflation, not real appreciation.

 

This transferred very significant value from the existing shareholders to Biglari.

 

25% of the $400+ million difference is $100+ million. This is easy for Biglari to take even though had had nothing to do with that appreciation (inflation). He can get a lot of money even if he creates no value, even if he destroys value.

[giofranchi]

First, the reason people are so visceral towards Biglari these days is because of expectations, and perceived betrayal (although that might be too strong a word).  It might interest you to know there was a time where, in addition to the sacred BRK and FFH sections on this message board, there was a, then named, Steak n Shake section!  Then Biglari could do no wrong!  But there were signs of course.  There were signs that he was opinionated and arrogant, that he would listen to no one but himself, that he, in his own words was 'supremely insensitive to criticism', or advice it would seem.  So the expectation then was that he was following in the steps of BRK, Buffet, Watsa, that he was going to get rich *with* the shareholders, not *off* the share holders.  He said he would not take any money from SNS shareholders, but then he did!  Not only that, he took a lot of money!  So the sense was that he betrayed those who thought he was the next coming of Buffet, and that's why some are so negative.  Personally I always saw the signs, and never bought into his 'next Buffet' persona.  He always seemed like a smart, ambitious, arrogant prick who would do things his way, everyone else be damned, but still with a keen understanding of business, investing and capital allocation well beyond his years.  As such I still own some BH and will hold until he reverse splits me out like he almost did a while back!  Oh yeah the reverse splits!  That was something else that pissed people off :-)

 

Anyway now that we're done with the history...  Remember his compensation package.. Last I remember he's paid 900K a year.  Also he takes 25% off the top of book value growth after the 6% hurdle.  So if he does increase book value by 20%, he gets 20-6=14* (0.25) = 3.5% of that book value into his wallet.  Meaning that the other shareholder(us) only gets 20-3.5% = 16.5% book value growth.  That's not bad, but still that's a pretty big headwind for the rest of us, and very different from investing in BRK when it was small since that would have been unencumbered by the headwind.  It sure takes a lot off of the present fair value calculation that's for sure...

 

 

bargainman,

I understand what you say, and basically I already knew that. Anyway, the truth is I couldn’t care less about the “next Buffett” persona. I know from the start that any person I decide to partner with has his or her strengths and his or her weaknesses. I am fine with that, no problem. Is Mr. Biglari opinionated and arrogant? Well, those are his weaknesses. The question is: given his strengths, can those weaknesses be tolerated? Or are they likely to significantly hinder future financial performance? In my experience, a lot of very successful businessmen are opinionated and arrogant… Mr. Biglari isn’t the first, and won’t certainly be the last! Luckily, I don’t have to live with them, I just have to do business with them, and make sure that they go on performing well. I’d rather rely on the opinionated and the arrogant, than on the superficial (see, for instance, the Cracker Barrel management) and the ignorant (look almost wherever you want in the business world…). Also the 'supremely insensitive to criticism' thing should be put into context: for instance, do you think Mr. Watsa could be able to invest the way he does, if he weren’t 'supremely insensitive to criticism'? 'Supremely insensitive to criticism' might mean that you have a strong reliance in your work and analysis and that you are able to back it with an iron will. And that is exactly what I look for in the people I decide to partner with.

Finally, on the compensation front, I admit I would have liked a 10% hurdle better than the actual 6% hurdle. But that is not a sufficient reason to dismiss a business that I understand and like, a very capable management, and a fair price. Because those three are the things we are all looking for, and they are not easy to find at all!

 

giofranchi

[giofranchi]

He can get a lot of money even if he creates no value, even if he destroys value.

 

Greg,

if and when increase in equity value per share falters (Mr. Biglari won’t be able to go on creating value) for whatever reason, I will part ways with Mr. Biglari. I hope that moment will be as far in the future as possible!

 

giofranchi

[enoch01]

He can get a lot of money even if he creates no value, even if he destroys value.

 

Greg,

if and when increase in equity value per share falters (Mr. Biglari won’t be able to go on creating value) for whatever reason, I will part ways with Mr. Biglari. I hope that moment will be as far in the future as possible!

 

giofranchi

 

Do you believe you can project growth in book value per share reasonably better than other options in the universe of stocks, given that Biglari has a history of turning on his shareholders so egregiously?  I don't, which is why this would have to trade probably at a very large discount to book for me to be interested.

[premfan]

Bottom line is he was appointed the next coming of buffet. Due to copying buffet in website and letters. People fell for this including myself. He was using buffet's philosophy and celebrity status as a way of marketing himself. Anyone saying i'm doing a bufffet like partnership or writes a long letter preaching value investing. is trying to trigger trust by leveraging buffets success. Actions always louder than words. Results are the name of the game.

[Kraven]

I will say this for Biglari.  At the Berkshire meeting earlier this year I found myself standing next to him and he is a snappy dresser.  I don't know much about clothes, but even I could tell his suit was perfectly tailored and very expensive.  Additionally, as Warren Zevon said, "and his hair was perfect".

[Parsad]

Also the 'supremely insensitive to criticism' thing should be put into context: for instance, do you think Mr. Watsa could be able to invest the way he does, if he weren’t 'supremely insensitive to criticism'? 'Supremely insensitive to criticism' might mean that you have a strong reliance in your work and analysis and that you are able to back it with an iron will. And that is exactly what I look for in the people I decide to partner with.

 

Oh, you've got it completely wrong here...completely!  Prem is absolutely adamant in his investment thesis and analysis...the ideas...but he is incredibly sensitive to criticism.  He deeply cares for his employees, shareholders, board of directors, associates, colleagues and even those who simply write to him.  In fact, it was because shareholders weren't getting adequate information during 2003, that he started reading the posts by shareholders here.  He takes alot of notice on things that are of particular interest to shareholders. 

 

He is lowest man on the totem pole in terms of compensation at Fairfax...whereas Biglari is by far the highest.  The bulk of Prem's compensation comes from dividends he receives just like any other shareholder.  He has no bonus plan, no stock options, no loans and has not changed the compensation structure since his salary increased about 8-9 years ago...or was it nearly a decade!  No executive has left Fairfax other than for retirement in the last decade.  Whereas how many people have fled Biglari Holdings?  The way you treat your team, your shareholders and the people around you has no immediate benefit...but it shows over the long-term in standing, reputation and loyalty.  Cheers!

[giofranchi]

Also the 'supremely insensitive to criticism' thing should be put into context: for instance, do you think Mr. Watsa could be able to invest the way he does, if he weren’t 'supremely insensitive to criticism'? 'Supremely insensitive to criticism' might mean that you have a strong reliance in your work and analysis and that you are able to back it with an iron will. And that is exactly what I look for in the people I decide to partner with.

 

Oh, you've got it completely wrong here...completely!  Prem is absolutely adamant in his investment thesis and analysis...the ideas...but he is incredibly sensitive to criticism.  He deeply cares for his employees, shareholders, board of directors, associates, colleagues and even those who simply write to him.  In fact, it was because shareholders weren't getting adequate information during 2003, that he started reading the posts by shareholders here.  He takes alot of notice on things that are of particular interest to shareholders. 

 

He is lowest man on the totem pole in terms of compensation at Fairfax...whereas Biglari is by far the highest.  The bulk of Prem's compensation comes from dividends he receives just like any other shareholder.  He has no bonus plan, no stock options, no loans and has not changed the compensation structure since his salary increased about 8-9 years ago...or was it nearly a decade!  No executive has left Fairfax other than for retirement in the last decade.  Whereas how many people have fled Biglari Holdings?  The way you treat your team, your shareholders and the people around you has no immediate benefit...but it shows over the long-term in standing, reputation and loyalty.  Cheers!

 

 

Well, it is obvious that I have not expressed my thought properly… And for that I apologize! I had already said that Mr. Biglari has evident weaknesses: he clearly is opinionated and arrogant, and those weaknesses lead him to behave poorly with his employees, shareholders, board of directors, associates, colleagues, etc.. That is a big minus, no doubt about it! And I clearly know that Mr. Watsa is the exact opposite! As you have rightly pointed out. That’s why my firm has a huge position in FFH, and a small position in BH.

What I was trying to say, though, is a completely different thing. I was remarking that, after you have examined all the facts and you have reached some conclusions, you must posses the will to stick to your ideas, even if people don’t agree with you for a very long time, at least until new facts are brought to light, which disprove your thesis. That’s the meaning I gave to “insensitive”: not to be blind or deaf, but to show a strong will. That’s also why I made the comparison with Mr. Watsa: because Mr. Watsa possesses one of the strongest will I know of!

I really hope now I have clarified what I meant.

 

Regarding Mr. Biglari, I know that the way he treats his team and shareholders will have a negative impact on BH financial results. But he looks to me like a hedge fund manager with a lot of his savings in the fund: as of last July 4, 2012, Mr. Biglari personally owned 10,073 shares (and he keeps on buying), while the Lion Fund owned 98,339 shares. So I just don’t see how it could be possible that he doesn’t really care to maximize value per share… Maybe, his weaknesses will prevent him from maximizing value per share as much as he could have, given his capabilities as a businessman and investor. But, to say that he will on purpose fail to maximize value per share, seems an exaggeration to me! I tend to think of it this way: BH has the potential to be an outstanding business: it has permanent capital, it controls a very dependable business that generates a lot of new cash, and it has the capabilities to invest wherever it makes the most sense. Whereas, “to thrive at the expense of shareholders” is notoriously a poor business: it almost always ends badly. Why should Mr. Biglari, who by the way is a significant shareholder and is increasing his stake in the company, choose the second alternative? BH is a much better business than a hedge fund, even a successful one: just because Mr. Biglari pretends to be remunerated like a hedge fund manager, does it mean that BH can not be a worthwhile investment?

 

Parsad, I am just asking. Maybe you have known Mr. Biglari personally for a long time, and you know many things that I ignore. So, your opinion will be greatly appreciated!

 

Thank you,

 

giofranchi

 

[twacowfca]

Also the 'supremely insensitive to criticism' thing should be put into context: for instance, do you think Mr. Watsa could be able to invest the way he does, if he weren’t 'supremely insensitive to criticism'? 'Supremely insensitive to criticism' might mean that you have a strong reliance in your work and analysis and that you are able to back it with an iron will. And that is exactly what I look for in the people I decide to partner with.

 

Oh, you've got it completely wrong here...completely!  Prem is absolutely adamant in his investment thesis and analysis...the ideas...but he is incredibly sensitive to criticism.  He deeply cares for his employees, shareholders, board of directors, associates, colleagues and even those who simply write to him.  In fact, it was because shareholders weren't getting adequate information during 2003, that he started reading the posts by shareholders here.  He takes alot of notice on things that are of particular interest to shareholders. 

 

He is lowest man on the totem pole in terms of compensation at Fairfax...whereas Biglari is by far the highest.  The bulk of Prem's compensation comes from dividends he receives just like any other shareholder.  He has no bonus plan, no stock options, no loans and has not changed the compensation structure since his salary increased about 8-9 years ago...or was it nearly a decade!  No executive has left Fairfax other than for retirement in the last decade.  Whereas how many people have fled Biglari Holdings?  The way you treat your team, your shareholders and the people around you has no immediate benefit...but it shows over the long-term in standing, reputation and loyalty.  Cheers!

 

 

Well, it is obvious that I have not expressed my thought properly… And for that I apologize! I had already said that Mr. Biglari has evident weaknesses: he clearly is opinionated and arrogant, and those weaknesses lead him to behave poorly with his employees, shareholders, board of directors, associates, colleagues, etc.. That is a big minus, no doubt about it! And I clearly know that Mr. Watsa is the exact opposite! As you have rightly pointed out. That’s why my firm has a huge position in FFH, and a small position in BH.

What I was trying to say, though, is a completely different thing. I was remarking that, after you have examined all the facts and you have reached some conclusions, you must posses the will to stick to your ideas, even if people don’t agree with you for a very long time, at least until new facts are brought to light, which disprove your thesis. That’s the meaning I gave to “insensitive”: not to be blind or deaf, but to show a strong will. That’s also why I made the comparison with Mr. Watsa: because Mr. Watsa possesses one of the strongest will I know of!

I really hope now I have clarified what I meant.

 

Regarding Mr. Biglari, I know that the way he treats his team and shareholders will have a negative impact on BH financial results. But he looks to me like a hedge fund manager with a lot of his savings in the fund: as of last July 4, 2012, Mr. Biglari personally owned 10,073 shares (and he keeps on buying), while the Lion Fund owned 98,339 shares. So I just don’t see how it could be possible that he doesn’t really care to maximize value per share… Maybe, his weaknesses will prevent him from maximizing value per share as much as he could have, given his capabilities as a businessman and investor. But, to say that he will on purpose fail to maximize value per share, seems an exaggeration to me! I tend to think of it this way: BH has the potential to be an outstanding business: it has permanent capital, it controls a very dependable business that generates a lot of new cash, and it has the capabilities to invest wherever it makes the most sense. Whereas, “to thrive at the expense of shareholders” is notoriously a poor business: it almost always ends badly. Why should Mr. Biglari, who by the way is a significant shareholder and is increasing his stake in the company, choose the second alternative? BH is a much better business than a hedge fund, even a successful one: just because Mr. Biglari pretends to be remunerated like a hedge fund manager, does it mean that BH can not be a worthwhile investment?

 

Parsad, I am just asking. Maybe you have known Mr. Biglari personally for a long time, and you know many things that I ignore. So, your opinion will be greatly appreciated!

 

Thank you,

 

giofranchi

 

 

I agree with Sanjeev on this one.  Many on the board used to be enthusiasts for Mr Big.  I was not one for reasons I had a hard time expressing at the time other than a strong impression that he wasn't someone I would like to partner with.  Then he overreached Big time at the expense of his junior partners on this board and his other stockholders.

 

Laura Rittenhouse has written a number of books on Buffett style management, including one titled, Do Business With People You Trust.  She shows how to analyze communications to spot phonies, and she has found a very high correlation of high future returns for companies whose CEOs communicate with their shareholders in an honest, trustworthy way.  Buffett, Watsa, and Brindle meet her test as controlling CEO shareholders.  Many other CEOs don't.

[giofranchi]

Laura Rittenhouse has written a number of books on Buffett style management, including one titled, Do Business With People You Trust.  She shows how to analyze communications to spot phonies, and she has found a very high correlation of high future returns for companies whose CEOs communicate with their shareholders in an honest, trustworthy way.  Buffett, Watsa, and Brindle meet her test as controlling CEO shareholders.  Many other CEOs don't.

 

 

I have read “Do Business With People You Trust”. I liked it and I agree. The problem here, though, is not how Mr. Biglari communicates. Imo, he communicates very well, he is very exhaustive in his letters, and expresses his thoughts with much clarity. The problem is he is not believed… “Pay attention to what he does, not what he says!” is the most frequent warning. I guess people think he is just plain dishonest. And I just have a hard time to accept that a person, who could manage and grow a very good business for a very long time, and who has a lot of skin in the game, is so “stupid” to behave dishonestly.

 

giofranchi

[bookie71]

There is a reason someone gave him the nickname of "Biglier"

[twacowfca]

Laura Rittenhouse has written a number of books on Buffett style management, including one titled, Do Business With People You Trust.  She shows how to analyze communications to spot phonies, and she has found a very high correlation of high future returns for companies whose CEOs communicate with their shareholders in an honest, trustworthy way.  Buffett, Watsa, and Brindle meet her test as controlling CEO shareholders.  Many other CEOs don't.

 

 

I have read “Do Business With People You Trust”. I liked it and I agree. The problem here, though, is not how Mr. Biglari communicates. Imo, he communicates very well, he is very exhaustive in his letters, and expresses his thoughts with much clarity. The problem is he is not believed… “Pay attention to what he does, not what he says!” is the most frequent warning. I guess people think he is just plain dishonest. And I just have a hard time to accept that a person, who could manage and grow a very good business for a very long time, and who has a lot of skin in the game, is so “stupid” to behave dishonestly.

 

giofranchi

 

I think the disconnect between what he says and what he does arose as he presented himself as modeling his future path after people like Buffett and  Watsa, treating the other shareholders as equal partners.  Then, when he got control of the Board, he forced a big change in the way he would be compensated that was extreme and very different from the vision of a an equal partnership that he had preached.

 

This is not exactly the focus Laura has on communications, but it cuts to the heart of perceived deception  which is what she seeks to uncover in a different way.  The reality is evident, his operations are not perceived to be like the fair and friendly way of  Buffett and Watsa, his supposed models.

[premfan]

The question is would you invest in biglari holdings if he didnt write exhaustive letters and preach value investing? If you take that out and look at the actions and valuation is this a business you would want to be partners in?  Any small business or large business owner knows marketing and innovation are the two drivers of business growth. Biglari is a MASTER marketer. He has marketed himself as the second coming via the website presentation, long letters, and reverse stock split. This was all premediated  hes an absolute genius using buffets cult status to trigger trust. Absolutely brillant marketing tactic.  The proof is that  buffet is a great businessman able to attract groups together to achieve a common goal. Biglari is a bully activist that forces his way on boards and enforces his will. He will never attract enough partners to grow a mini berkshire cause his repupation is ruined.  You need goodwill and trust to grow a business.  He has no goodwill and us living in the information age his actions will not be forgotten.  He is alone with his minion cooley and logical busineessman will not partner with him period. For him to be successful he has to use all his energy to bully companies to give in. This might work for awhile but omg his isnt a sustainable business plan. 

[bookie71]

I hope you folks who invest with him make tons of money, but not me, I like to sleep at night.

[Parsad]

Parsad, I am just asking. Maybe you have known Mr. Biglari personally for a long time, and you know many things that I ignore. So, your opinion will be greatly appreciated!

 

He is determined, driven, intelligent and poised. 

 

That being said, I would not be surprised to see him accidentally blow up Biglari Holdings by going "all in" into one investment and it goes bad.  With Cracker Barrel, he borrowed against Steak'n Shake to invest almost everything into this one investment.  Leverage cuts both ways. 

 

I was also immensely disappointed with the contradictions in his statements and actions when it came to compensation...the name change give it away, and that's when we started selling our stock and we also wrote a letter to the board of directors.  The compensation change was the final straw for us, and we sold the rest of our stock after that. 

 

We won't invest with him, but if he ever does blow it up, I'm more than happy to invest in Steak'n Shake.  ;D  Cheers!