Applause for Our Board's Host, Mr. Parsad!

[Junto]

Mr Biglari may get many people to invest in him - many inadvertently through various index funds/ETFs. However, his reputation is harmed for good which will make it harder for him to become a billionaire or take a controlling stake in another company.

 

In retrospect

      - the guy is not prudent with money, has taste for lavish cars/mansion

      - wants ot make money off the shareholders not with them

      - used the buffett emulation as a marketing tool

      - attract talented managers to wok for him since he is the only beneficiary of the new pay package

      - not have a sycophantic BOD around him

 

He can still do well monetarily by milking SNS and investing money in undervalued companies. He seems pretty good in spotting such opportunities.

 

Anyway, I made money off of SNS and was thinking of being a longer term holder for tax reasons if Biglari is able to compound even at reasonable rates. I wouldnt want to buy BH at these prices.

 

Just because he has nice cars and house doesn't not indicate he is not prudent with money. A pretty big leap in my opinion. I am not saying they are good investments but I think you are exaggerating. The guy makes over $900,000 per year and we have no insight into his personal financial statement...

 

This is definitely an egregious compensation agreement given his historical position on executive compensation. I am going to wait and watch how this plays out. 

[Ballinvarosig Investors]

In retrospect

       - the guy is not prudent with money, has taste for lavish cars/mansion

       - wants ot make money off the shareholders not with them

       - used the buffett emulation as a marketing tool

       - attract talented managers to wok for him since he is the only beneficiary of the new pay package

       - not have a sycophantic BOD around him

I've never been on the Biglari bandwagon, but that's not fair at all.

 

On point 1, what Biglari does with his own money is his own business. Even if he decides to blow cocaine up his nose with $1,000 bills, that's his perogative and not my concern.

 

Point 2 is fair enough.

 

On point 3, Buffett was certainly guilty of using Ben Graham as a marketing tool, when his style was anything but Graham-like for the majority of his career.

 

In point 4, Buffett has managers that work for him for less than what they could get outside of Berkshire, and we've already seen Biglari design a compensation package that was extremely generous for Western Sizzlin' CEO, so he's not completely self-serving (mention in the NFI letter to Biglari - http://www.noisefreeinvesting.com/blog/?p=112).

 

Finally on point 5, have you taken a look at the Berkshire board? It's filled with family members, old cronies and certainly a few sycophants.

 

Anyway, we're completely off-topic on this thread, maybe the Biglari stuff should be split off so we can keep this the Parsad love-in going. I certainly don't agree with everything he says, but that's probably why he's a much more successful investor than me ;D

[Parsad]

In regards to Sardar, I don't think it would be fair at all to take away from the positive and quality things he has done.  Steak'n Shake would not be around right now if it wasn't for his work and everyone else involved with Steak'n Shake after the change in control.  It's definitely one of the greatest turnarounds I've seen in such a short-period of time, regardless of the new compensation package proposal he's asked for.  I can't agree with him on this one signficant point...it's truly an ethical dilemma for me and there is no suitable resolution for me or him.  He has to decide if it is worth the impact to his reputation...we've already decided with our feet! 

 

The one thing I've always espoused when investing is never fall in love with the CEO.  You can fall in love with their actions...even their words...but they have to always back it up.  It doesn't matter if it is Buffett, Prem, Eddie Lampert, Joe Steinberg or Sardar Biglari.  Things can always change quickly, whether it is a direct result of management or a risk from the enterprise's own nature...you have to always pay attention.  If not, you can quickly become a casualty of your own emotional quotient if you aren't careful. 

 

We've made alot of money with Western Sizzlin and especially Steak'n Shake.  I don't begrudge one moment that I invested in those businesses, or the support I gave Sardar over the years...we just won't be investing alongside him going forward.  During the last few years, we've also learned alot from things he's done and we'll learn more going forward.  Hopefully, he'll also learn from other people as well.  Cheers!   

[shalab]

The one thing I've always espoused when investing is never fall in love with the CEO.  You can fall in love with their actions...even their words...but they have to always back it up.

 

Well said Sanjeev!