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Actions Speak Louder then Words, Biglari Should Take Note - MCF


Myth465
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Excellent read. I recommend everybody read it. This is the kind of company I have been looking for all the years.

 

Again, thanks for sharing!

 

This was a very good summary of the company and a good read.

 

Ken Peaks talks the talk and walks the walks. Value Pretenders could learn alot from him.

 

http://www.contango.com/investor/events/20100809/The%20Contango%20Story.pdf

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this is definitely interesting ...

 

however i am still learning and reading up on this. I skeptic in mean can't help buy wonder and try to understand the advantages of MCF's corporate structure.

 

they basically outsource everything (to say the company has only 7 employee is technically correct). So their competitive advantage is their corp structure (outsource things, and have the incentives be the potential for success of their activities). If this is the case why aren't others doing the same? Could it be because it fits the energy exploration biz, or is it because no one has thought of it or is it because something else?

 

still reading...

 

hy

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This was a very good summary of the company and a good read.

 

Ken Peaks talks the talk and walks the walks. Value Pretenders could learn alot from him.

 

http://www.contango.com/investor/events/20100809/The%20Contango%20Story.pdf

 

thanks for bringing this to the forum. fascinating stuff.

 

actually, biglari sounded & acted not too differently in the early days of western sizzlin & even sns....sns pre turn around, that is. i'm still scratching my head re his total about-face.

 

but i'm def putting mfc on my radar

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  • 4 weeks later...

http://www.gurufocus.com/news.php?id=106292

 

Mark Sellers Speech To Investors – Focus On The Downside, And Let The Upside Take Care Of Itself

 

"Sellers is likely most well known for putting almost his entire fund into Contango Oil and Gas (MCF)..."

 

I was just thinking about this. Was about to read that article after a cup of tea. My first thought was focus on the downside - Isnt this the same guy who went all in on a commodity stock when it was at an all time high, with no hedges?

 

With that said, I have learned alot from Sellers, it should be a good read.

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The cynic in me says others don't do this because they prefer to give themselves stock options, large bonuses and to get rich off of the shareholders instead of with the shareholders. It just serves as an example of what is wrong on Wall Street today. Sad that others don't follow Peaks example...

 

cheers

Zorro

 

this is definitely interesting ...

 

however i am still learning and reading up on this. I skeptic in mean can't help buy wonder and try to understand the advantages of MCF's corporate structure.

 

they basically outsource everything (to say the company has only 7 employee is technically correct). So their competitive advantage is their corp structure (outsource things, and have the incentives be the potential for success of their activities). If this is the case why aren't others doing the same? Could it be because it fits the energy exploration biz, or is it because no one has thought of it or is it because something else?

 

still reading...

 

hy

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this is definitely interesting ...

 

however i am still learning and reading up on this. I skeptic in mean can't help buy wonder and try to understand the advantages of MCF's corporate structure.

 

they basically outsource everything (to say the company has only 7 employee is technically correct). So their competitive advantage is their corp structure (outsource things, and have the incentives be the potential for success of their activities). If this is the case why aren't others doing the same? Could it be because it fits the energy exploration biz, or is it because no one has thought of it or is it because something else?

 

still reading...

 

hy

 

 

Isn't there some guy in Omaha who runs a sizeable operation with something like 13 1/2 people?  :)

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http://www.gurufocus.com/news.php?id=106292

 

Mark Sellers Speech To Investors – Focus On The Downside, And Let The Upside Take Care Of Itself

 

"Sellers is likely most well known for putting almost his entire fund into Contango Oil and Gas (MCF)..."

 

I was just thinking about this. Was about to read that article after a cup of tea. My first thought was focus on the downside - Isnt this the same guy who went all in on a commodity stock when it was at an all time high, with no hedges?

 

With that said, I have learned alot from Sellers, it should be a good read.

 

 

Yup.  He rode it up and then rode it back down, all the while maintaining that he had this huge margin of safety.  He was oblivious to the fact that commodity businesses are cyclical.  There was similar blindness about a couple of other major holdings.

 

His investors bailed out, so he closed his hedge fund because his chance of making up the deficit in his incentive fee was unlikely.  He may have consoled himself with the incentive profits he took out of the fund before it tanked because he said he was going to live off of his investments when he closed his fund.

 

There's a lesson here.  We all have our blind spots.  That's why it's important to get honest, perceptive feedback about our ideas.

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I think we all make mistakes. KSP was one of mine.

 

But I dont get it - If something is worth $100 and sells natural gas at $12, isnt it only worth $30 - $40 if natural gas goes to $5 and its unhedged.

 

Thats one hell of a blind spot.

 

 

He used to work for Morningstar and became impressed with the importance of having a moat. Therefore, in his mind, the fact that MCF was a low cost producer may have trumped the risk of investing in a commodity business at the peak of the cycle.

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I think we all make mistakes. KSP was one of mine.

 

But I dont get it - If something is worth $100 and sells natural gas at $12, isnt it only worth $30 - $40 if natural gas goes to $5 and its unhedged.

 

Thats one hell of a blind spot.

 

 

He used to work for Morningstar and became impressed with the importance of having a moat. Therefore, in his mind, the fact that MCF was a low cost producer may have trumped the risk of investing in a commodity business at the peak of the cycle.

 

Lol, that's a a great asset (low cost producer) but gives me no comfort with natural gas (its vastly oversupplied). I like Contango and will watch, but they should move into oil.

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