ragnarisapirate

I don't think that he sold short above 50, just that he sold... He certainly didn't build his entire position in the last 60 days (which is what was reported), thought.

Oh... My bad. I mistakenly thought that David was referring to BH (with my capital lease obligation comment)... yeah, the debt a CBRL is kind of daunting, but, likely not company wrecking. Anyways, sorry for being dumb. :)

the long term debt consists of a lot of capital lease obligations... the company actually has very little outstanding debt.

It looks like he sold puts rather than shorted. Additionally the lion fund presently owns over $75 million in BH stock... it's in the treasury stock section; they own something like 207K shares, which are presently valued on the market at $371/share. It is carried at cost, though, since it is part of the fund, I believe. Additionally, they didn't make a filing that they sold shares, which, I am under the impression they have to do, though, there could have been enough lag in the required filing dates. As of the last quarterly filing, the company had enough cash to have holdings in Penn, Fremont, CCA and CBRL... but almost nothing else. I talk about the specifics of it here: http://ragnarisapirate.blogspot.com/2011/06/biglari-holdings-takes-crack-at-cracker_13.html These issues pretty much exemplify why I wouldn't own BH unless it was trading at something like 1/2 what it is presently trading at. It is just a bit too hard to understand. If anyone sees anything too factually horrendous in anything that I say in the post, please feel free to shoot me an email so that I can correct it.

And if there is anything to learn from the economic situation in the late 70s, we didn't survive. So it is blatantly obvious that there was, and presently is, no need to go long any stock, of any kind... ;)

Wow... What the Hell is wrong with you people up in Canada!? (tongue in cheek)

If you're never wanting to meet the tenants, that's probably pretty reasonable. Your insurance and taxes may be a bit high. My taxes are 1% of the property value, with insurance on a house with a reconstruction cost of 80ishK being something in the neighborhood of $375/year.

well put.

That's pretty attractive, especially if you have a financing package you like. I do have a question though. Are you able to find any $60K houses that are worth, say, $85K? The operating costs seem a bit high. Here, you can find a management company for a month's rent, though, repairs will be tacked on to that. You would have to find some REALLY bad tenants to have $6K in expenses! Additionally, one thing to remember is that your rents may fall. When a lot of other people start getting the deals you discuss, they will be willing to cut their margins to keep the places occupied. As more and more people lose their houses, this will continue to be the case. Though, you would have to screw up pretty badly to make a 60 month rent house not work.

A lot of the stuff being discussed here depends on where you are located. Where I am, if I really want to, I can go through the court system and get a tenant out of a house in less than 2 weeks. Often, they will just leave on their own. Even if a place is trashed, it is easy to fix stuff, and isn't that expensive (if you know good/cheap contractors or have developed a good system). Additionally, if you know much about property maintenance, you can do things a lot cheaper too... For example: I literally just walked in the door from fixing an air conditioning system, at a cost of under $50 bucks, all because I know certain things to look for. Had I needed a contractor, it would have been hundreds, at a minimum, AND they probably would have told me I needed a new system. Additionally, if you buy right, you can get well over 10%+ returns, even when you pay cash (leverage, at present rates, will increase returns.) For example: I have a house that had I paid cash on it, would have generated over 33% annualized; in rent, less expenses . I recently paid cash for another one, that if I keep as a rental, will conservitavly generate above 18% in returns, net of all expenses. Again, that doesn't include the appreciation in the price, from where I got a hell of a deal on it; it was a 60 cent dollar. In both of these cases (like the rest of my houses) I work a lot less than anyone I know, have decent income, and can focus on other pursuits (like stocks). What I am getting at is this: Rentals are just like stocks: you generally need to do a ton of research to invest in them and do well. Selectivly, there are great deals out there; you just have to be patient and try to not do anything stupid. Additionally, as it was mentioned, if there are any people on this board that are hard money lenders (or know people that are), drop me a line. I'd love to talk to you about terms, rates, and such, as I always like to see what is available in comparison to the banks (and potentially, some local hard money guys) that I have talked to.

Buffett once said that too much of a good thing is absolutely wonderful. I think that is pertinent in this situation.

this one might compete: http://finance.yahoo.com/banking-budgeting/article/112709/buffett-berkshire-marketwatch;_ylt=AlqRzDLBEclan3xF6pta_827YWsA;_ylu=X3oDMTE1Z3BmdXI3BHBvcwM4BHNlYwN0b3BTdG9yaWVzBHNsawN3aHliZXJrc2hpcmU-?mod=bb-budgeting&sec=topStories&pos=5&asset=&ccode=

How can a board full of value investors miss (or at least not point out) that the return isn't necessarily 0% over the long haul? IT DEPENDS ON HOW MUCH YOU PAY FOR THE HOUSE PEOPLE!! As an example, I came across a distressed seller who was needing to sell her home ASAP. I was in a position to pay cash, but got a mortgage on it (having the cash made for an effective bargaining tool since it was spring of 09!), and literally bought it for 1/2 of what it was worth. If the thing doesn't appreciate at all, I could sell it in 30 years (while letting it sit vacant) and make money. However, I have rented it out, and received rents for nearly what I paid for it... All with under a grand in net repairs (I even replaced the oven with that). There are exceptions to every rule, and if anyone uses this as a reason for not investing in real estate, they are insane. A lot of what I am seeing in the real estate market here, is that a few bad houses are pulling prices down for the nice ones, which is absurd. I have also noticed, in certain areas, a nice house pulls up the bad ones (in terms of asking price). It is pretty absurd how some people come to value real estate assets... They should be viewed in much the same way that we view stocks (price, to value). Other points that the article doesn't make: While home ownership does reduce workforce mobility, it also makes for stronger family ties. For example, since I, my brother and his family, my parents, and other family members all own real estate in Kentucky, we have stronger ties than other families I know, who have moved away (largely in part to the fact that they didn't have a house tying them down.) There is certainly a human cost of mobility, which, when economists don't focus much on utility, is forgotten, despite the fact that it is VERY important.

To be fair, many deals could have been done for less than 30% of sticker... Look at Dollar Thrifty Auto! Not saying that these 2 are good deals, but, everything looks like a good deal 2 years ago, when compared to now.

And how much do we value and the market value that 7% at?

AHA!

For micro caps, Bruce at Pink Sheets never disappoints (but he rarely posts) and John at shadow stock is brilliant.

Are we now betting on an ESL takeover of the remaining SHLD stock?

As total number spent on R&D, Apple spends much more, as they have over 4x the revenue of RIMM. With revenue approaching 90 Billion, Apple is spending well over 2 BILLION a year on R&D! It's not the amount they spend on R&D that's so important. It's the return on that investment. And that continues to be huge for Apple. Oh no doubt... just compare the return on invested capital of AAPL to that of MSFT, or even to a pharmacuetical (a lot of them spend well over 10% of revenue on R&D!) last year, MRK spent nearly a quarter! Phil Fisher talks a lot about R&D spending; I should prolly go brush up on that, as it's been a few years and is getting kinda fuzzy!

As total number spent on R&D, Apple spends much more, as they have over 4x the revenue of RIMM. With revenue approaching 90 Billion, Apple is spending well over 2 BILLION a year on R&D!

I had always assumed that the way it would work would be a kin to a unit of electricity floating around on the grid. You have the right to use it, but, there will still be a little bit of counterpart risk. Only with broadband, I guess you would be getting a set amount of information, say, $100 dollars is backed by 3 grams of gold, a gallon of oil, ounce of copper, bushel of corn, and a terabyte of downloaded information via broadband (obviously, my numbers are arbitrary, but, you get the idea).

Oh, yeah, there is no doubt that broadband is important... The only problem that I could see with it is the whole redeemability of it. I can't redeem a dollar for broadband per se. I can do that with oil, gold, or sea shells. The broadband only works if there is power and such for it. I really like the idea of a basket of goods for backing a currency, in large part, to protect from currency black swans; for example what happens if an alchemist finally can turn sand into gold? While it seems far fetched, a similar thing happened with aluminum in the 1800s (read some stuff on wikipedia about the cap on the washington monument.). Regardless, I can not fathom a monetary system that could be much worse than ours (I am talking in terms of structure, not application)

Ron Paul is the man... I am guessing that since you want broad band as part of backing a currency, you are long level 3? ;P Anyway, Ben Graham did some really cool stuff back in the day. I am starting on these, even though from what I gather, it has been something talked about on this board and something that I have already thought about. :) http://www.amazon.com/Commodities-Currency-Benjamin-Graham-Classics/dp/0070248060 http://www.amazon.com/Storage-Stability-Original-Benjamin-Graham/dp/007162631X/ref=pd_sim_b_2

From a person who has worked in the jewelry industry, Buffett is absolutely right... The economics are killer; you add in good sales people, who are friendly, and make you think that they care about you, then, you are doing even better. Helzeberg is really good at this sort of thing. With that said, if you buy your jewelry from virtually any place other than a pawn shop, you are 99% of the time, going to pay WAY too much- which is probably quite the opposite of what a person would normally think.

Hmm.. maybe, Eddie Lampert should go to the least competitive landscapes and pummel the competition. Having said that, do you think it's only a matter of time, where the "game" is stepped up by Walmart/Target and other competitors? The comment above say the business model is still flawed, but it's like in the land of the blind, the one-eye man is king. It's only a matter of time before great competition comes to Canada, right? Don't Warren and Charlie have something to say about this? Something to the effect of upgrading plants or making a product line more efficient doesn't do much for a competitive advantage in the long run, since competitors can come in and do the same thing? Don't get me wrong, I'm not writing sears off, just saying that they will probably never be wmt or tgt; if purchased at the right price, every company can be a good deal.