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Which Would You Say Emulates Early Buffett the Best: GLRE, SHLD or BH?


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Each of these companies have one ultimate goal...The wise distribution and reinvestment of free cash flows with the aim of constant compounding of book value.

 

I just want to get your idea of who most reminds you of a young Mr. Buffett of the following three men:

 

1. Einhorn

2. Lampert

3. Biglari

 

None of the above.

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Each of these companies have one ultimate goal...The wise distribution and reinvestment of free cash flows with the aim of constant compounding of book value.

 

I just want to get your idea of who most reminds you of a young Mr. Buffett of the following three men:

 

1. Einhorn

2. Lampert

3. Biglari

 

Answer is no one.

 

To add:

3. Are you sure about Bilgari ultimate goal being what you stated? His actions indicate that his ultimate goal is to get rich as quickly as possible even at the expense of shareholders.

 

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Guest Hester

None of them is emulating Buffett much, Markel and FFH are the more mini-berkshires.

 

Lampert and Biglari might be trying, but they haven't made insurance part of their strategy yet (although they've tried), which is a huge and underappreciated factor of BRK's success.

 

Also, and correct me if I'm wrong, I'm pretty sure Buffett has never set out to systematically screw over his shareholders (Biglari).

 

Einhorn is actually copying the insurance model pretty well, but he doesn't invest like Buffett, especially given the fact that he actively shorts. His pay package is not very Buffett like either.

 

I think they are all super talented investors though.

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History doesn't always repeat itself but sometimes it rhymes - Mark Twain.

 

You are not going to find a carbon copy of buffet, you guys are looking with the wrong set of goggles. The next buffet will apply similar principles and will be at the helm of a public company but may be doing things different or may be in a totally different industry than insurance.

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History doesn't always repeat itself but sometimes it rhymes - Mark Twain.

 

You are not going to find a carbon copy of buffet, you guys are looking with the wrong set of goggles. The next buffet will apply similar principles and will be at the helm of a public company but may be doing things different or may be in a totally different industry than insurance.

 

Interesting take...

 

Which public corporation CEO would you say fits this mold the best?

 

Perhaps Steve Jobs?

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I'm surprised how often Lampert still gets included in these types of discussions. How much worse of a job does he have to do with SHLD until value investors stop looking up to him?

 

What has Lampert's record in ESL been since he acquired SHLD?  That's really the measuring stick one should use.  He never claimed (to my knowledge) that SHLD was going to be his BRK.  That was just speculation and hopeful dreaming on the part of value investors ... I think.

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That's a good question - it'd probably be pretty easy to back into his approximate returns since he only owns like 3-4 major positions at any given time.  I'd say his returns can't be that bad just from looking at a chart of Autozone; mid-20's to 290 from early 2001 through present. 

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I would say none because each of these guys are dealing with larger amounts of cash and in some cases compensation whose focus is on them and not the investor.  The closest to early Buffett in my mind are folks who have started partnerships (a few on this board) who have a value philosophy can provide concentration and have a similar incentive structure as the early Buffett partnership.

 

Packer

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History doesn't always repeat itself but sometimes it rhymes - Mark Twain.

 

You are not going to find a carbon copy of buffet, you guys are looking with the wrong set of goggles. The next buffet will apply similar principles and will be at the helm of a public company but may be doing things different or may be in a totally different industry than insurance.

 

Interesting take...

 

Which public corporation CEO would you say fits this mold the best?

 

Perhaps Steve Jobs?

 

Jobs is an awful capital allocator. 

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Steve Jobs is an awful capital allocator.  He has absolutely no idea how to optimize a balance sheet nor does he see value in a way that a good investor does.  He is one of the great inventors of all time, but those are two very different things.  The fact that he has generated a good ROIC is simply a result of his master at creating great products, it says little about his allocation of capital.  In fact, if he used his excess cash to buyback stock the last 5 or 10 years, his ROIC would have been multiples better. 

 

Why do you think Apple get's such a low multiple?  People have no faith the cash will be used wisely. 

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Why do you think Apple get's such a low multiple?  People have no faith the cash will be used wisely.

 

No, I don't think that's why at all. I think it's mostly related to people being scared off by their market cap size and Jobs' health.

 

And we've been over this before, but I'd rather see Apple conservatively invest their cash than blow it on stupid acquisitions, and trying to time the market with buybacks like so many other tech companies do. They do invest a lot of money back into their business; they are just able continue to make tons of cash while doing so. They put cash into product development, into building new data centers, into building a new corporate office that improve the workplace, into brilliant marketing campaigns, into deals with record labels to build iTunes, into deals with publishing companies to build iBooks, into expanding their retail stores (which are more successful/profitable than any other retailer in the world). That is capital allocation. Just because they are sitting on a mountain of cash does not make Jobs an awful capital allocator, especially when we see one company after another blowing billions of dollars in poorly-times buybacks, and awful acquisitions.

 

 

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