BH - Biglari Holdings

[Parsad]

Biglari is building a global brand so that it becomes easy to recognize him just like Watsa, Pabrai etc. He is going a step beyond Watsa though in that he has made his name synonymous with the brand.

 

In the short term, it will be used to justify paying him the money for branding but in the long term it is going to be quite interesting. Remains to be seen if his remaining partners will be helped or harmed by this...

 

Actual brands are built on the backs of a product, generally created, developed, distributed and then consumed in daily life...be it technology, industrial equipment, food and beverage, vice or anything else.  Biglari has created nothing!  He's taken the wheel and called it his own...he's not a shameless cloner as Mohnish would put it, but someone who clones something, or acquires it, and says he created it.  This whole "brand" thing is solely to entrench control.  Cheers! 

 

[gg]

The issue at this point (which is what sardar wanted) is that any branding by the parent co (Biglari holdings), will further entrench sardar due to the fact that he shares a name with the company. So as pessimists, we'd say he's making it seem like it's Steak n shake by sardar biglari, and optimists would say Steak n shake by biglari (holdings) 

[gfp]

 

He seems to be doing fine on the acquisition front so far. If the trend holds, soon we should be seeing Maxim by Biglari!

 

 

http://cdn2.maxim.com/maxim/sites/default/files/hot100party_2014_maxim_sl.jpg

[shalab]

GlobalFInancePartners - awesome picture!

[ukvalueinvestment]

In the comments section of that newspaper article link, it says that Biglari charged the company for the use of his name.  If true, that is a very dodgy related party transaction.  I don't like this guy at all.  He appears to be trying to enrich himself through means other than just compounding the book value of his company.

[giofranchi]

In the comments section of that newspaper article link, it says that Biglari charged the company for the use of his name.  If true, that is a very dodgy related party transaction.  I don't like this guy at all.  He appears to be trying to enrich himself through means other than just compounding the book value of his company.

 

Yet there were many leading Romans of the elder generation who could not forget that this seemingly admirable reconstitution of the State had only been made possible by the military defeat, secret murder or public execution of almost every person who had defied the power of this energetic pair.

--Robert Graves “I, Claudius”, describing Emperor Augustus and his wife Livia, after the Civil Wars

 

WOW… after all, it seems there had been in history at least one very successful person, who was a bigger rogue than Mr. Biglari!! ;D ;D ;D

 

No, seriously: I understand all the skepticism about Mr. Biglari… but, as I have always said, I will take the evidence as it comes. If and when his behavioral eccentricities start getting in the way of his business judgment and acumen, I will reconsider my view about BH. Now I still think it is one of the best platform for doing business I know of.

 

Gio

 

PS

Whoever has not read “I, Claudius” yet, please do so! Very highly recommended!! :)

 

[ragu]

In the comments section of that newspaper article link, it says that Biglari charged the company for the use of his name. 

 

Ah, the comments section of a newspaper article link. It's where every serious investor goes for his due diligence.

 

It might be useful to go read the actual filing to understand the licensing agreement before sounding off, you know.

 

I don't like know this guy at all, but I thought I'd sound cool sitting on top of my moral high horse.

(edited for accuracy)

 

Best,

Ragu

[redskin]

In the comments section of that newspaper article link, it says that Biglari charged the company for the use of his name. 

 

Ah, the comments section of a newspaper article link. It's where every serious investor goes for his due diligence.

 

It might be useful to go read the actual filing to understand the licensing agreement before sounding off, you know.

 

I don't like know this guy at all, but I thought I'd sound cool sitting on top of my moral high horse.

(edited for accuracy)

 

http://www.4-traders.com/BIGLARI-HOLDINGS-INC-6118554/news/Biglari-Holdings-Inc--Licensing-deal-stirs-up-Sardar-Biglaris-critics-17880580/

Best,

Ragu

[ukvalueinvestment]

Hey dude.  I'm not investing in his vehicle so no due diligence required.

 

  I caveated it by saying "if true".

 

Do you rush off to read filings every time you scan some article of middling interest?

 

Moral high horse?  Not really.  In general, am I a fan of related party transactions and vanity?  Not really.

 

Have a nice day.  Enjoy your filings.

 

 

 

 

 

[Myth465]

Hey dude.  I'm not investing in his vehicle so no due diligence required.

 

I caveated it by saying "if true".

Do you rush off to read filings every time you scan some article of middling interest?

Moral high horse?  Not really.  In general, am I a fan of related party transactions and vanity?  Not really.

Have a nice day.  Enjoy your filings.

 

We have some die hard Biglari fans.

Dont take it personal, no criticism of Biglari, will be allowed on their watch.

[ragu]

Dont take it personal, no criticism of Biglari, will be allowed on their watch.

 

Heh. And here I was thinking that it might have something to do with the fact that said criticism was flippant,careless and completely at odds with the facts at hand.

 

Congratulations on living up to that handle of yours, btw.

 

Best,

Ragu

[adesigar]

In the comments section of that newspaper article link, it says that Biglari charged the company for the use of his name. 

 

Ah, the comments section of a newspaper article link. It's where every serious investor goes for his due diligence.

 

It might be useful to go read the actual filing to understand the licensing agreement before sounding off, you know.

 

I don't like know this guy at all, but I thought I'd sound cool sitting on top of my moral high horse.

(edited for accuracy)

 

Best,

Ragu

 

Here is the actual filing

 

http://www.sec.gov/Archives/edgar/data/93859/000092189513000091/form8k07428_01112013.htm

 

http://www.sec.gov/Archives/edgar/data/93859/000092189513000091/ex101to8k07428_01112013.htm

 

Lets hear Ragu's and Gio's spin on what the reason is for this "Trademark License Agreement ". 

 

 

[giofranchi]

Lets hear Ragu's and Gio's spin on what the reason is for this "Trademark License Agreement ".

 

Well, of course I give the same interpretation Sanjeev gives about this trademark license agreement: it probably is all about control.

But I don’t understand who really cares… I want him to feel comfortably in charge and to have full control… That way it will be easier for him to think and to plan for the long run, won’t it?

One thing I know for sure: if I hadn’t full control over my company, I wouldn’t be able to do half the things I am doing… which might be a very good outcome, after all!! But that’s another story!! ;D ;D ;D

 

Gio

 

[giofranchi]

We have some die hard Biglari fans.

Dont take it personal, no criticism of Biglari, will be allowed on their watch.

 

When it comes to business, I don’t think I am a fan of anything. As I have often repeated: “just show me something better, and I am gone in a second!” ;)

The fact, when it comes to BH, is that all the criticism I hear and read about always concern Mr. Biglari’s character peculiarities… I know them by now… and sincerely, I don’t care… at least until there is some evidence those peculiarities start hindering his business acumen.

If you think they already do, then I would really like to know why and how: until now the arguments I have heard against BH business model are very weak indeed (actually, I would say they are non-existent!).

 

Gio

 

[ukvalueinvestment]

Dont take it personal, no criticism of Biglari, will be allowed on their watch.

 

Heh. And here I was thinking that it might have something to do with the fact that said criticism was flippant,careless and completely at odds with the facts at hand.

 

Congratulations on living up to that handle of yours, btw.

 

Best,

Ragu

 

Flippant and careless?  Perhaps. 

 

Completely at odds with the facts?  Having read those links, I don't think so.

 

Good luck living up to that handle?  Er, well I am British and am an investor and do so based on value .... So not much luck required!

[APG12]

Enjoy your filings.

 

The CoBF way of saying, F off!  ;D

[wachtwoord]

We have some die hard Biglari fans.

Dont take it personal, no criticism of Biglari, will be allowed on their watch.

 

When it comes to business, I don’t think I am a fan of anything. As I have often repeated: “just show me something better, and I am gone in a second!” ;)

The fact, when it comes to BH, is that all the criticism I hear and read about always concern Mr. Biglari’s character peculiarities… I know them by now… and sincerely, I don’t care… at least until there is some evidence those peculiarities start hindering his business acumen.

If you think they already do, then I would really like to know why and how: until now the arguments I have heard against BH business model are very weak indeed (actually, I would say they are non-existent!).

 

Gio

 

Don't you think this the typical guy that will enrich himself (further) over the backs of his shareholders?

 

You always talk about people you like to do business with. Do you think this guy's trustworthy? (and why?)

[Parsad]

Lets hear Ragu's and Gio's spin on what the reason is for this "Trademark License Agreement ".

 

Well, of course I give the same interpretation Sanjeev gives about this trademark license agreement: it probably is all about control.

But I don’t understand who really cares… I want him to feel comfortably in charge and to have full control… That way it will be easier for him to think and to plan for the long run, won’t it?

One thing I know for sure: if I hadn’t full control over my company, I wouldn’t be able to do half the things I am doing… which might be a very good outcome, after all!! But that’s another story!! ;D ;D ;D

 

Gio

 

The question is, how did you come to control your company Gio?  I'm guessing you either built the stake or bought it, correct?  You didn't entrench yourself into a company with 2% personal ownership and then start changing names, compensation, licensing, share class structure, building names, etc.  Cheers!

[giofranchi]

Don't you think this the typical guy that will enrich himself (further) over the backs of his shareholders?

 

You always talk about people you like to do business with. Do you think this guy's trustworthy? (and why?)

 

But I always just stick to business… I try to listen to what they say about their business strategy and about the process they employ to create value… I try to decide if I like what I hear, or if I don’t… Then I invest if I like it, I look somewhere else if I don’t like it… That’s all!

I try to judge people on how clearly and effectively they think and communicate their business goals, and the means to achieve them.

 

I know very well that “being full of oneself” is a warning sign… But why? Because it might cause someone to lose clearness of vision and to start making bad business decisions! Yet, until there is the evidence someone full of himself like Mr. Biglari truly is beginning to misjudge business opportunities, it is just extremely difficult and uncertain to predict it will happen. That’s why I said that I will take the evidence as it comes: until now I like what I see (from a business point of view) very much! When and if my business point of view changes, I will revaluate BH.

 

I think of it this way:

 

The evidence: Mr. Biglari has built a platform for doing business following the example of BRK, while also trying to follow in Mr. Icahn's footsteps as an activist investor, putting together the best of both worlds.

The speculation: it is going to end badly, because Mr. Biglari is an arrogant fellow.

 

The evidence: since the inception of his Lion Fund, Mr. Biglari’s shareholders have made tons of money.

The speculation: he will enrich himself over the backs of his shareholders, because Mr. Biglari is an arrogant fellow.

 

Well, I just stick with the evidence… And…

When the facts change, I change my mind

 

Gio

 

[giofranchi]

The question is, how did you come to control your company Gio?  I'm guessing you either built the stake or bought it, correct?  You didn't entrench yourself into a company with 2% personal ownership and then start changing names, compensation, licensing, share class structure, building names, etc.  Cheers!

 

Yeah! Sanjeev, of course you are right! But I think we are missing something very important here… SIZE!!

 

Mr. Biglari is my age and already runs a company that is orders of magnitude larger than my own… I think it is simply impossible for him to get control over it by the means you have suggested: by building it, or by purchasing it. No way someone as young as him (without a spectacular inheritance from his family…!!) could have gotten control over such a large company simply buying a majority stake! Also building it is out of the question: those are stories that might happen in the high-tech realm… not in fast food franchising!

 

Therefore, here we have a dilemma: either manage the company without true control over it (which I think is dangerous, because shareholders interests might sometimes be very short term…), or get control over the company in some non-traditional ways (which has its own dangers, because shareholders, who instead are long-term oriented, might not like it at all…).

 

It is not an easy choice… but I guess by now it is clear what I prefer! ;)

 

Gio

 

[wachtwoord]

Don't you think this the typical guy that will enrich himself (further) over the backs of his shareholders?

 

You always talk about people you like to do business with. Do you think this guy's trustworthy? (and why?)

 

But I always just stick to business… I try to listen to what they say about their business strategy and about the process they employ to create value… I try to decide if I like what I hear, or if I don’t… Then I invest if I like it, I look somewhere else if I don’t like it… That’s all!

I try to judge people on how clearly and effectively they think and communicate their business goals, and the means to achieve them.

 

I know very well that “being full of oneself” is a warning sign… But why? Because it might cause someone to lose clearness of vision and to start making bad business decisions! Yet, until there is the evidence someone full of himself like Mr. Biglari truly is beginning to misjudge business opportunities, it is just extremely difficult and uncertain to predict it will happen. That’s why I said that I will take the evidence as it comes: until now I like what I see (from a business point of view) very much! When and if my business point of view changes, I will revaluate BH.

 

I think of it this way:

 

The evidence: Mr. Biglari has built a platform for doing business following the example of BRK, while also trying to follow in Mr. Icahn's footsteps as an activist investor, putting together the best of both worlds.

The speculation: it is going to end badly, because Mr. Biglari is an arrogant fellow.

 

The evidence: since the inception of his Lion Fund, Mr. Biglari’s shareholders have made tons of money.

The speculation: he will enrich himself over the backs of his shareholders, because Mr. Biglari is an arrogant fellow.

 

Well, I just stick with the evidence… And…

When the facts change, I change my mind

 

Gio

 

Gio,

 

You're completely right that it doesn't matter he's arrogant. In fact, I'm more inclined to go with people the world perceives as arrogant (remember: arrogance is an unjustifiably high believe in your own abilities. If that belief is high but justifiable it's not arrogance but excellence). For some reason I get a bad feeling when someone is trying to entrench himself with techniques anyone could employ (put your name on everything) and seems to not respect his shareholders (some of the notes of the meeting I saw). All of that give me the feeling (yes this is coming from a beta guy) he's going to fuck me over and I should not trust him. I could be completely wrong and I probably have to dig further (one oft he reasons I'm asking) but that is what it is.

 

You are always talking about a business partnership. As a rule I try to avoid doing business with people I don't trust (hence my post).

 

I'm curious how this will play out.

[skanjete]

The question is, how did you come to control your company Gio?  I'm guessing you either built the stake or bought it, correct?  You didn't entrench yourself into a company with 2% personal ownership and then start changing names, compensation, licensing, share class structure, building names, etc.  Cheers!

 

Yeah! Sanjeev, of course you are right! But I think we are missing something very important here… SIZE!!

 

Mr. Biglari is my age and already runs a company that is orders of magnitude larger than my own… I think it is simply impossible for him to get control over it by the means you have suggested: by building it, or by purchasing it. No way someone as young as him (without a spectacular inheritance from his family…!!) could have gotten control over such a large company simply buying a majority stake! Also building it is out of the question: those are stories that might happen in the high-tech realm… not in fast food franchising!

 

Therefore, here we have a dilemma: either manage the company without true control over it (which I think is dangerous, because shareholders interests might sometimes be very short term…), or get control over the company in some non-traditional ways (which has its own dangers, because shareholders, who instead are long-term oriented, might not like it at all…).

 

It is not an easy choice… but I guess by now it is clear what I prefer! ;)

 

Gio

 

Gio, maybe an example to the contrary : FNG group, listed on the free market.

 

The company was started by 3 engineers (a couple and a friend). They are now 39 years old.

 

They bought a small retailer of child clothing in 2004 for 100.000€.

The acquisition was a disaster and they had to start all over again. But they were quick learners and applied some engineering concepts to the retailing sector which provided them a competitive advantage.

 

From 2008 on things started to get better and there was no risk of going out of business anymore.

Now, after some acquisitions, they employ 900 people, have revenue of 135m€ with an EBITDA margin of 17% (nothing like Inditex yet, but growing) and the latest equity issue was based on an equity value of 125m€.

They still own 60% of the company.

 

I agree, Biglari has still greater size, but their equity investment is a lot bigger than his.

Besides, they get richer mainly by growing the value of the company, not by siphoning off chunks of value.

 

I would rather bet on such a story than on a type as Biglari. (Actually, I haven't bet on neither one of them.)

 

[giofranchi]

Gio, maybe an example to the contrary : FNG group, listed on the free market.

 

The company was started by 3 engineers (a couple and a friend). They are now 39 years old.

 

They bought a small retailer of child clothing in 2004 for 100.000€.

The acquisition was a disaster and they had to start all over again. But they were quick learners and applied some engineering concepts to the retailing sector which provided them a competitive advantage.

 

From 2008 on things started to get better and there was no risk of going out of business anymore.

Now, after some acquisitions, they employ 900 people, have revenue of 135m€ with an EBITDA margin of 17% (nothing like Inditex yet, but growing) and the latest equity issue was based on an equity value of 125m€.

They still own 60% of the company.

 

I agree, Biglari has still greater size, but their equity investment is a lot bigger than his.

Besides, they get richer mainly by growing the value of the company, not by siphoning off chunks of value.

 

I would rather bet on such a story than on a type as Biglari. (Actually, I haven't bet on neither one of them.)

 

Good example, indeed! ;)

The fact is what I said in my previous post: I think I understand how Mr. Biglari is going to create value and what’s his strategy to achieve worthy business goals.

Instead, I don’t know anything about those very talented engineers at FNG Group…

Whenever I read stories like the one of FNG Group, 100k that have turned into 100 million in a few years, without clearly understanding how the stars behind those great stories think about and do business... well, they just could be lottery tickets to me…

 

Gio

 

[skanjete]

Gio, maybe an example to the contrary : FNG group, listed on the free market.

 

The company was started by 3 engineers (a couple and a friend). They are now 39 years old.

 

They bought a small retailer of child clothing in 2004 for 100.000€.

The acquisition was a disaster and they had to start all over again. But they were quick learners and applied some engineering concepts to the retailing sector which provided them a competitive advantage.

 

From 2008 on things started to get better and there was no risk of going out of business anymore.

Now, after some acquisitions, they employ 900 people, have revenue of 135m€ with an EBITDA margin of 17% (nothing like Inditex yet, but growing) and the latest equity issue was based on an equity value of 125m€.

They still own 60% of the company.

 

I agree, Biglari has still greater size, but their equity investment is a lot bigger than his.

Besides, they get richer mainly by growing the value of the company, not by siphoning off chunks of value.

 

I would rather bet on such a story than on a type as Biglari. (Actually, I haven't bet on neither one of them.)

 

Good example, indeed! ;)

The fact is what I said in my previous post: I think I understand how Mr. Biglari is going to create value and what’s his strategy to achieve worthy business goals.

Instead, I don’t know anything about those very talented engineers at FNG Group…

Whenever I read stories like the one of FNG Group, 100k that have turned into 100 million in a few years, without clearly understanding how the stars behind those great stories think about and do business... well, they just could be lottery tickets to me…

 

Gio

 

Of course you're right about the lottery tickets.

 

I was just suggesting an example of how some people succeed in a) building a company from scratch, b) in a mundane sector and c) while maintaining control.

 

[OracleofCarolina]

Grand opening this week in Ibiza