ragu

Mars, then?

Brilliant! Many thanks for sharing. Best, Ragu

Statutory warning: One year returns can be extremely skewed. In either direction. XIRR of 165.9%. Began the year with 98% in BH and ended it with 57% in FELP. Thanks to Picasso for his comment in the FELP thread about the market missing the incentives for the various actors involved there that caused me to dig deeper. Best, Ragu

I can only assume you haven't read the link to the complaint posted earlier in this thread. To recap: Net seller of APL securities until conversations with exec beginning July '10. Was provided information about upcoming asset sales and told not to trade on that info. Purchases began after first conversation, including significantly out of the money short-term call options. Attempted to influence exec when faced with a subpoena from the SEC. Seems pretty clear cut to me. Best, Ragu

Fair enough. I guess there's never really been anything, that I have seen, about him or the firm in terms of shadiness. With SAC and Cohen, for e.g., it was only a question of whether the prosecutors were going to have enough evidence. This is a surprise. To me, at any rate. Best, Ragu

Unbelievably stupid. I will never understand the motivation of something like this. And to do it at the fag end of one's career? How on earth do you turn rogue right at the end? Best, Ragu

Decent shout. Worth looking at this. Best, Ragu

"Dammed" fool?! (Pg. 37) Editorial standards, they are a slippin' at Berkshire. Best, Ragu

Gio, I didn't imply there was anything wrong with it. FWIW, I didn't have a problem with the original incentive agreement (5% hurdle and no cap). 6% hurdle for BH, 5% for other LP's. The agreement should be in the filing I linked to a couple of posts back. No need to hope:-). Sardar continues to charge the same incentive fees as the Lion Fund originally. The only change, as far as I can tell, is that these incentive fees are assessed quarterly instead of annually. Right. What matters though for the incentive calculation is not just the amount of earnings, but the equity employed to achieve those earnings. SNS' equity at the end of FY 2008 was $283.5 million. All of this equity was required to produce these operating results, whereas the investment earnings have come from a far smaller combination of equity produced by operations and debt. And, they've still outpaced operating earnings. Never said it would be negligible. Just that it'd be less (and I expect far less) than if he'd kept the Lion Fund within BH. It is a significant departure from the original agreement, IMO. As I said, it will be interesting to see what he does with the cash he receives from running the Lion Fund. Best, Ragu

gio, Re. (1), there isn't. The cap is still there, albeit tied to operating results (mostly). However, by moving the securities from BH in exchange for an LP interest in Biglari Capital, Sardar has effectively eliminated the cap on the investment side. His incentive fees via Biglari Capital are not subject to a cap of $10 million/yr. Re. (2), again it doesn't say he doesn't have to reinvest in BH stock. Think of it this way: Sardar's incentive compensation used to be determined on the entire equity of BH. His compensation is now determined with the investments committed to Biglari Capital removed from that equity. Naturally, the incentive payments to Sardar as CEO of BH will be less (far less, in fact) under the new arrangement than under the original arrangement, even if the total payment to him from BH will be roughly similar. So, even though he is still tied to the requirement to buy BH stock, it will be an amount that is far less than that stipulated by the original agreement. Hope this clarifies. Best, Ragu

gio, There is no ambiguity about this. It's pretty clear. From the filing announcing the sale of Biglari Capital back to Sardar: (emphasis supplied) and (emphasis supplied) Seeing as the amendment is filed with the SEC and is public information, I'd suggest this is an oversight rather than an attempt to mislead. I wouldn't be surprised to see the amendment make it to the website. Best, Ragu

shalab, Just got the chance to respond to this. Welcome aboard! Safe to say that I disagree with both proposals. I want Sardar in control of BH. He doesn't have the shares he needs for outright control. Neither does he have shareholders that trust him. This deal at least removes the possibility of a coup against Sardar. Re. letter to the board, here's a thought: There's much brouhaha over how the sale of the Lion Fund to Sardar effectively eliminates the compensation cap. In fact, there's a far bigger implication for BH shareholders and it's one that has been (unsurprisingly) overlooked. The vast majority of Sardar's compensation going forward is going to accrue from the fees that BH pays to Biglari Capital for investment management. This amount is not subject to the agreement that requires Sardar to buy BH stock. Given that this is a significant departure from the original incentive agreement, how does the board think about it? FWIW, I fully expect Sardar to continue to be a buyer of BH stock over time (agreement or not), but this sale removes the requirement that the original agreement enforced. Certainly worth watching what he does going forward in this regard. Best, Ragu

It was good to watch! TBF to Brazil, that wasn't handball by Hulk for the disallowed 2nd goal. Julio Cesar and the bar kept them in the game after that. I'd love a Brazil vs. Argentina final, with Messi scoring the winning goal. Would be some redemption for him in the eyes of Argentinians, that. Best, Ragu

Just saw the story behind the ad. Incredibly bad business judgement to let that ad run in the first place. Ironically, there was a similar issue at CBRL where Sardar was bemoaning their lack of judgement. Someone lost their job at Maxim over this, that's for certain! Good to see that they responded quickly and correctly. Best, Ragu

oddballstocks, Could you share the name of the company and that of the CEO? Thanks, Ragu