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Dan Braem  

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  • Biglari Holdings: 2015 Annual Meeting Notes: Initial Statement And Proxy Contest [View article]
    I'll add one more. Biglari attacks the opposition slate of directors while simultaneously investing shareholder funds in companies run/managed/with oversight of that board.

    Odd indeed.
    Apr 20, 2015. 12:33 PM | 3 Likes Like |Link to Comment
  • Biglari Holdings: 2015 Annual Meeting Notes: Initial Statement And Proxy Contest [View article]
    The hard part is to determine which action by Biglari is most egregious.

    I would say the transfer of Biglari shareholder cash to the Lion Fund to buy Biglari company stock.

    Seriously? If the lion fund bought IBM or AAPL, the shift of assets from Biglari Holdings to LF would still be shady. But to shift BH capital to LF to buy BH stock?

    But then again, the royalty deal is horrific as well. I'm on the fence as to which is more outrageous. We may simply have two Hall of Fame moves in the category of screwing share owners.
    Apr 19, 2015. 08:25 AM | 3 Likes Like |Link to Comment
  • Biglari Holdings: 2015 Annual Meeting Notes: Initial Statement And Proxy Contest [View article]
    I posted this somewhere else, but I don't question his abilities or investing acumen. And any collection of assets can be cheap, and maybe that is the case today with BH. So not even questioning whether this a good investment or not at today's prices.

    I am questioning Biglari's ethics and the board's decision making. But I sincerely appreciate your notes and your points - really don't disagree with anything you are saying.
    Apr 14, 2015. 01:11 PM | 2 Likes Like |Link to Comment
  • Biglari Holdings: 2015 Annual Meeting Notes: Initial Statement And Proxy Contest [View article]
    Fair. My comments were in no way to attack you (the author). They were a direct attack on the BOD. In no way, in my mind, are they fulfilling their fiduciary duty to shareholders.

    As a ridiculous parallel, assume I took a small stake in McDonalds and somehow won a seat on the board, then became CEO.

    In order to improve the McDonalds brand, I change it to McDonald's by Braem. Then, in some odd way to protect shareholders, I create a royalty deal whereby a change of control and ousting of me as CEO creates a $100m payment to me.

    I further take company cash (lets say a couple billion) and put it into a hedge fun I run. Anything over 6% per year, I get to keep 25% of the marginal difference.

    Maybe I'll get greedy. I'll do a rights offering, and put that cash to work in my hedge fund. Then I'll create debt at the operating subsidiaries, pay the cash up to the holding company, and put that money in my hedge fund.

    Then I get smart. I entrech myself in the company by voting all the shares in my hedge fund to keep myself on the board (and as CEO).

    Great work, if you can get it.
    Apr 14, 2015. 11:23 AM | 5 Likes Like |Link to Comment
  • Biglari Holdings: 2015 Annual Meeting Notes: Initial Statement And Proxy Contest [View article]
    Interesting. First, thanks. Very kind of you to post your notes.

    IMO-the explanation by Cooley about building the brand is likely the most ridiculous thing I've heard or seen in business.

    If you (the board) think franchisees oversees need to see the Biglari name (somewhat laughable) so be it.

    To suggest to shareholders that such an arrangement needs to be tied to a change in control royalty payment is egregious to the highest level. Explanations are fine but they aren't good (actually they are poor).
    This company has been hijacked in many creative ways. It is a great case study. While Biglari is very smart, it is difficult to see over the long term a favorable situation to shareholders where all the risks are borne by them and the rewards are absurdly split between Biglari and shareholders.
    Apr 14, 2015. 06:25 AM | 5 Likes Like |Link to Comment
  • Biglari Holdings Proxy Battle Ends In A Whimper But It Won't Be The Last [View article]
    By moving shareholder assets into the Lion Fund, Biglari enters a heads he wins big/tails - no event. If assets go up, he profits greatly. If asset prices go down, he can still can paid from the operations side of the business.

    This, on top of the royalty agreement, makes this management team one of the worst violators of corporate governance I have ever seen.

    He may be a good capital allocator and operator. That doesn't change horrific corporate governance. As the author may be implying, the trick is how to value the company when good assets with poor corporate governance coexist.
    Apr 10, 2015. 10:31 AM | 1 Like Like |Link to Comment
  • Loews Corporation: An Underperforming Conglomerate In Search Of An Activist [View article]
    thanks for the great article. Although I disagree on some minor points, it was well written and nails some big points. I get the sense that Tisch views the company less as a steward for all shareholders and more for keeping this company alive forever for his family.
    Aug 30, 2014. 12:16 PM | 1 Like Like |Link to Comment
  • Loews Corporation: An Underperforming Conglomerate In Search Of An Activist [View article]
    I disagree with the author that there is no reason for the conglomerate structure. This type of structure can have big advantages.

    I also think that CNA should be wholly owned. Can you imagine Buffett floating a 10 percent stub of his insurance/float vehicles? It defeats the point.

    That being said, the author is accurate in all other comments. Assets are currently undervalued by the market. But management has not been effective in managing these assets. As the author points out, corporate governance has been questionable at best.

    Not sure where things go from here. 40 plus billion in float. Maybe 7 billion in gross cash at the holding company. Plenty of ways to extract value. But it's not clear if management is up to the task.
    Aug 30, 2014. 10:50 AM | 3 Likes Like |Link to Comment
  • FitLife Brands Announces Share Repurchase Program [View article]
    Thanks for the info. May revisit after reviewing the next quarter.

    All the best.
    -Dan
    Jul 15, 2014. 01:47 PM | Likes Like |Link to Comment
  • FitLife Brands Announces Share Repurchase Program [View article]
    How much of pre-tax income goes to management versus the amount that goes to shareholders? I sold out of this after a nice run, and I seem to remember that management salaries increased by a fairly large amount.
    Jul 15, 2014. 10:58 AM | Likes Like |Link to Comment
  • Yahoo Is A Hedge Fund [View article]
    Interesting. I'm catching up on Yahoo. So post Alibaba sale/IPO - you have $15B of cash ($4B on hand + $10B from sale), maybe 14%-15% ownership in Alibaba worth $22B (assuming your 150B valuation), and the $10B stake in Yahoo Japan. Throw in the US business and the other investments and you have a good deal here.

    Not a 50 cent dollar to me, but a significant enough discount to warrant serious consideration here.
    Apr 24, 2014. 01:49 PM | Likes Like |Link to Comment
  • Yahoo Is A Hedge Fund [View article]
    I don't know the answer to this - where is the $4.5B of cash located? If not the US, then it is not available for buybacks.

    If only half is in the US, then how much could that dent a $35B market cap? And how much would be needed for operations? Seems like a stretch to me.
    Apr 24, 2014. 12:50 PM | Likes Like |Link to Comment
  • Steel Excel - Shell Company Turning Into Profitable Business [View article]
    Forbid is not really the right word. "Limit" is.
    Mar 24, 2014. 09:31 AM | Likes Like |Link to Comment
  • Thoughts On The Berkshire Hathaway Annual Letter And Report [View article]
    I disagree about it doesn't matter that they are American vs. European. Makes a world of difference IMO.
    Mar 14, 2014. 11:05 AM | 1 Like Like |Link to Comment
  • Thoughts On The Berkshire Hathaway Annual Letter And Report [View article]
    Briar - I was just going to respond before I noticed your comments on European style options.

    Buffett loves float, long tail insurance, and the US economy. Writing puts on the US index (and perhaps others) completely reflects his investment style.

    Not sure how receiving cash in year 1 and paying a much lower amount in the distant future is a bad deal. Just a great insurance deal for Berkshire, which is what I wrote at the time and has played out accordingly.
    Mar 6, 2014. 10:58 AM | 1 Like Like |Link to Comment
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