Sardar Investing Track Record

[ok22]

Am new to understanding SNS and this board. 

 

Am trying to determine what level of expectations are appropriate for Sardar investing the excess cash from SNS.  Would appreciate board members insight into what they think Sardar can deliver on the investing front. 

 

Why one thinks X is reasonable would be of much interest.  How does one look up Sardar's track record at investing capital?  Thanks. 

 

FYI, if anyone cares, this is my first ever post on any kind of message board ever...

[Parsad]

Welcome Ok22!  I'll leave it to others to elaborate further, but Sardar started his Lion Fund investment fund in 2000.  He's beaten the S&P500 TR by over 10%+ annually since then.  Unfortunately, access to the Lion Fund's website is restricted, but I've read all the annual reports and his record is very, very good.  

 

You can take a look at his asset allocation through Western Sizzlin's moves in public filings and decide for yourself if those positions will do well or poorly going forward.  These are control positions mostly, so he generally was paying a premium to acquire blocks of shares.  The benefit of control positions are that if you do take over, you can make sure capital is allocated to the highest return investments, and that's where he expects to make his profits long-term.  Often they were underperforming operations and he was interested in improving their businesses.  Cheers!

[ok22]

Thanks for your response Parsad.  As a new poster, am beginning to see what others must have felt when I added to the stats on the number of times viewed but never added to the number of replies stats  :)

 

BTW, think you do a great job with the board and appreciate the effort you are putting in on it.

 

Based on your response, have a couple of follow up questions and thoughts:

 

1.  When you say he has beaten the SP500tr by x%+, how would you describe his results in down years.  Am always concerned that these types of measures lead to Milleresque performance i.e. (S&P down 38% and Lion down 27%).  As you know, do that enough times and while your relative performance is great, as shareholders of SNS, we would not be doing so great.

 

2.  My other question on the track record is based on some assumptions.  Am assuming a decently large percentage of capital was deployed into Friendlys, WEST and then SNS.  How does one evaluate a track record where WEST and new money into Lion continuing to buy SNS shares may have been a contributor to SNS shares going up (given Lion/West ownership stake and market cap/volume of SNS shares especially when it was in single digits) and then that is a positive contributor to returns/track record?

 

3.  From your read of the annual reports, care to share any more color on what one would attribute to the good track record to?  Mostly SNS and Friendlys or something else? 

 

4.  What sort of qualitative "mental growth" do you sense from you read of the annual reports?

 

 

Note: I am discounting some of the Friendlys performance contribution because from my previous life in LBO land, am familiar with the company and how that transaction occurred.  Sun is not the smartest money around and there was a irrational exuberance premium/too much cheap debt available for LBOs that drove the price paid for the exit.  While I give full credit for Sardar for pushing for a sale, standing upto the family and getting a good price; am not giving full credit for buying this quality of company (Friendlys) and being able to consistently have this type of outcome.  He could just as easily become stuck in a mediocre business that was going south slowly if Sun had not had an itch that they needed to scratch.

 

 

[Parsad]

Hi Ok22,

 

I'm sure others can answer those questions, and they will.  If I answer all of those, and the SNS questions in the previous post about cash flows, there would be no reason for anyone to invest with us.  ;D  I've been told by other managers that the reason we don't raise more capital is because in the past I've put everything on here.  I'll let you do the digging with input from others.  That's the best way for people to learn and become comfortable with their own assessments.  Cheers!

[frog03]

It will be very interesting to see if he can keep 10% outperformance vs the S&P on a long term basis.  Very few managers can do this of course. Buffett and Watsa and C&S do get mentionned of course on this board. But there are quit a few others (Sprott, Lamarche, Cannell, Skagen, ...) that get hardly any mentionning.

 

Sardar is very young and has done very well so far.  One must also keep in mind his asset base was EXTREMELY small the first few years.  Pabrai also did fantastic his first couple years with minuscule assets.  The last seven or so years have been extremely disappointing.

 

[Junto]

It will be very interesting to see if he can keep 10% outperformance vs the S&P on a long term basis.  Very few managers can do this of course. Buffett and Watsa and C&S do get mentionned of course on this board. But there are quit a few others (Sprott, Lamarche, Cannell, Skagen, ...) that get hardly any mentionning.

 

Sardar is very young and has done very well so far.  One must also keep in mind his asset base was EXTREMELY small the first few years.  Pabrai also did fantastic his first couple years with minuscule assets.  The last seven or so years have been extremely disappointing.

 

 

Everyone can't pat his back too much. Remember so far the SNS investment is still underwater. I expect that he will do well with it but so far it has been a loser in the portfolio. Also if you look at the other WEST investments, ITEX and others, the 10-Q for June shows they have been negative as well.

 

I am just glad I waited to jump into SNS at much cheaper valuations.

[ragnarisapirate]

It will be very interesting to see if he can keep 10% outperformance vs the S&P on a long term basis.  Very few managers can do this of course. Buffett and Watsa and C&S do get mentionned of course on this board. But there are quit a few others (Sprott, Lamarche, Cannell, Skagen, ...) that get hardly any mentionning.

 

Sardar is very young and has done very well so far.  One must also keep in mind his asset base was EXTREMELY small the first few years.  Pabrai also did fantastic his first couple years with minuscule assets.  The last seven or so years have been extremely disappointing.

 

 

Everyone can't pat his back too much. Remember so far the SNS investment is still underwater. I expect that he will do well with it but so far it has been a loser in the portfolio. Also if you look at the other WEST investments, ITEX and others, the 10-Q for June shows they have been negative as well.

 

I am just glad I waited to jump into SNS at much cheaper valuations.

 

It isn't like they have been in ITEX and SNS for that long... His philosophy is right-even Buffet has lost money in the past (even this year!).

 

There is no doubt that Sardar has gotten great deals on great businesses, it just so happens that he got them at a time in which they were getting ready to become better businesses, with better prices! :) You can't really fault him for that, plus, he did take over SNS and turn it around... the market just has yet to realize it's full value.

[Junto]

Don't get me wrong. I think he is doing a great job, I just wanted to point out that we should not be overly excited because in realty the investments have not yet proved out to be successful.

 

Ultimately, I believe they will be.