Here are some quick thoughts:

Sardar Biglari and Steak 'n Shake (SNS) just announced that SNS is attempting to buy all remaining shares of Fremont Michigan Insuracorp (FMMH.OB). To sum this up, with some estimates that I have quite literally jotted down on he back of an envelope and have thought about for only a few minutes... this is a good deal for share holders of BOTH companies.

Here is the first of several Nova videos that are on the Longterm Capital Management debacle. I remember stumbling upon it on KET on a Sunday evening in when I was in middle school. Even then, I thought that the whole situation was one of the neatest things in the world. It may well have been one of the moments in my life that shaped me into being the contrarian value investor that I am today! :)

While I do think that some of the video is missing, the gist of it is there.

Apparently, the British government is selling off its assets, in order to fund more spending. My favorite quote from the article was this:

Of course we're not going to sell at the bottom of the market ... we're not idiots.

Really, this idea of a 'V' shaped recovery that is being thrown around simply seems to be too good to be true. Hell, if oil isn't completely traded in dollars, that wouldn't help anything either; despite that fact that we prolly deserve the smack in the face that a move of that nature would be.

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FortuNet (FNET) has been a stock on my radar for quite sometime; which shouldn't be a surprise, since I am a well known sucker for companies that can be bought for less than their cash minus all liabilities. In March, this was the certainly the case, but since there were other companies that I was more impressed with, I never bought into the company.

After FNET paid out a massive dividend, the share price fell to just over a dollar and hasn't really moved since. I personally never understood the valuation, as their ability to seemingly print money held up quite well during the recession, coupled with their board feeling confident enough in the business to distribute $2.50 a share in cash.

This year, the Western Sizzlin's (WEST) annual meeting was important, meaningful, and interesting as ever... Fortunately, I was able to attend the meeting of the company that is going to be rolled into my Steak 'n Shake (SNS) investment (unless these idiots somehow screw it up). Not only did I get to enjoy several days in NYC, but I also got the chance to meet and converse with a number of other value investors; which in and of itself was awesome.

Since Noise Free Investing has already published their own set of notes, I will add in some commentary to my own. Anytime that I use 'quotes' they are as close as possible (keep in mind, my notes were hand written and recording devices were not allowed).

On Thursday, I won my bet with Jeff Macke in a mere 4.5 months. In a dispute on Minyanville.com, he bet a dinner that Sears Holdings (SHLD) would trade in the single digits before it doubled in price... I, along with a Minyanville user with the handle "SAM C" accepted the bet. SHLD doubled and is presently well above the $74 dollar mark (and still below book value).

To give a little background info on the situation, Macke made some un-researched and/or false claims about SHLD (and more specifically, Eddie Lampert taking billions out of the company) and then changed the claims without calling attention to the fact that he screwed up. I highlighted the errors and changes (which, I assume were due in part to me, since my write up was picked up by Seeking Alpha) here and here.

As any business owner will tell you, it takes a lot of time, patience, and a strong stomach to last long. Paul Sonkin, the manager of the Hummingbird Fund (plus a few others) and his stake in Dewey Electronics (DEWY.OB) takes this description to a whole new level. Sonkin is a co-author of one of my favorite books on value investing and Dewey makes military electronics and commercial snow making machines.

Earlier in the month, in an SEC filing, Sonkin became a beneficial owner of more than 10% of Dewey Electronics. Formerly, he had acquired more than 5% of the company towards the end of 2005. In that time, there have been anti-war sentiments, reduction of troop levels in areas of conflict, and a recession (which has to have eaten into the snow machine business; despite global warming :D).

Recently, as many of you know, Sardar Biglari got a pretty big raise for his role at Steak 'n Shake (SNS). While not making any money in director's fees, not getting stock options, and not having a contract, he is still going to be the recipient of $900K/year.

Being Chairman of the Board, Biglari has a fiduciary duty to the shareholders- to oversee management and set a profitable direction for the company. As CEO and President, his duty is to run the company effectively and profitably. He has done these things quite well.

Here is an article on thestreet.com that highlights Amazon's (and others) efforts to go against states levying taxes on their services. No surprise here, but, it is great that companies are banding together to fight for their own interests, against this sort of marketplace disruption ( which ultimatly makes us less efficient of an economy). In the event that legislation of this nature would pass in all states, it would make big box book sellers more competitive, thus, wasting a tremendous amount of resources and time belonging to the consumer.

Here is a brief synopopsis: Every time that I buy something on Amazon (AMZN), I not only save a trip to the book store (sometimes multiple ones, if they don't have what I want), but I also get the option of buying the book- used from some mom and pop used book store; on the cheap too! In addition, I am able to get all sorts of reviews on books and a great recommendation list from the website. I can also add items I want to a centralized wishlist, where, people can gift me things that I actually want, rather than guessing at it. The list of advantages goes on and on...

Jim Cramer just announced that housing has bottomed. Now, while I personally hope that he is correct, my gut instinct is to say 'look out below!'... at least when it comes to real dollar stabilization. Though, as I just said, nothing would thrill me more than to have real estate prices shoot though the roof.

Historically, our 'friendemy' Jim (who I love to hate), has been really good at... well, not timing the markets very well. For example, in the edition of The Intelligent Investor with commentary by Jason Zwieg, Cramer trumpets that the 'old economy' stocks and 'value metrics' are dead. Later, he says that you should be fully invested in tech (and pokes fun at Buffett over not drinking the tech Kool-Aid). A person that would have taken his advice would have seen their holdings precipitously fall by well over 90% in price. As I have said before, who can blame them for getting caught up in the bubble if they had no understanding of price and value?

In the book "Distress Investing: Principles and Technique", Martin Whitman and Fernando Diz successfully outline many of the issues surrounding the complicated world of investing in the bonds of companies that are in bankruptcy. If you want my opinion in 5 words here it is: 'go buy the damn book'.

If you are sick and tired of buying/reading books on investment that are watered down, this would be a good way to step it up. If you read 'One Up on Wall Street' or 'Rich Dad, Poor Dad' and they changed your life, I suggest that you take a pass on Distress Investing. It is certainly not for the faint of heart and will definitely be picked up for college level finance classes.

Jones Soda (JSDA) is probably my favorite example of a John M. Keynes "Sometimes, the markets can stay irrational longer than you can stay solvent" stock... The company has some pretty tasty products too. Check out its chart since 2003:

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A few years ago, I was tossing around the idea of shorting the stock- when it was trading at what seemed to be an astronomical 100x+ earnings. 'The price?' you ask? Around $12 bucks a share. Oddly, I remember thinking that if it was around $3 dollars, it might be compelling; or at the very least, at a price in which I would want to cover any potential short.

Tuesday was a good day... Steak 'n Shake's (SNS) stock was up almost 20%, the company posted an accounting profit for the quarter, and the Annual Meeting of Shareholders took place. As I made the 3 hour trek to Indianapolis, I am posting the majority of my notes for you to read. It was an incredibly informative meeting that lasted just over 2 hours.

After seeing Tuesday's positive news in regards to the 'surprise' profit for the quarter, the general mood in the audience felt calmer than at the Investor's Day in November. There seemed to be fewer forcefully asked questions; which makes sense - this much of a turnaround (many initiatives of which only got started in late October) would normally take over a year for virtually any other company. Really, I wasn't that shocked at the positive earnings... or rather, I wasn't nearly as shocked as all the short sellers must have been (good luck covering your short sales)!

After seeing the headline "Wall Street Jumps on G20 Hope, Mark-to-Market Change; Dow Above 8,000" I have to step back and scratch my head for a minute. It seems like all the G20 nations can do is print money to fix the problem, and re-inflate the bubbles that have already occurred. Now, I am certainly not saying that the markets will be lower in 5 years than they are now--I don't know. It is unfortunate that we won't have any real idea what would have happened had we taken a more responsible course of action by letting things deflate for a bit and then let things naturally get back on track.

I also don't understand why there is such a freak out over Mark to Market accounting either... While I understand that it can be useful to repeal in order to give a 'good feeling' to investors and lenders--I am reminded of Charlie Munger:

On February 27th, Jeffrey Macke of CNBC's Fast Money published an article on Minyanville.com addressing Eddie Lampert's Chairman Letter to the shareholders of Sears Holdings Corporation (SHLD). In the article Macke made a series of what we can only assume to be (mis)statements. Since the article's publication, I and others posted replies asking Macke to clarify and correct points he made... In addition, I wrote a blog post that was picked up by Seeking Alpha in regard to the inaccuracies. The main one in regard to Lampert being "A man who used his old firm, Goldman Sachs (GS) to plow $5 billion out of Sears and into his personal hedge fund".

Instead of Macke coming out and saying that he was wrong, he (or someone at Minyanville) simply edited the statements out of the article. Thankfully, Google was able to link me up with an archived version of the article on MSN Money Central so that I could make a 'compare and contrast" post. As this experience has shown, I am unable to rely on simply hyper linking to articles that contain information that is highly subject to change... as a result, I printed off both copies of the story, highlighted the changes, scanned, and put them in a picasa folder to keep/preserve them in the pristine digital clarity that they deserve!

It has come to my attention that there may be a short squeeze in the works for Steak n Shake (SNS). Volume has been substantially lower, which, when coupled with a higher price, means that money is coming into the stock and staying there (I'll reference John Burr Williams in The Theory of Investment Value for that 'all things equal' technical tidbit!).

Here is the case that I will lay out; keep in mind that I am 100% a value guy, who would never use technical analysis of any sort to justify the purchase of an equity... this is more of a 'noise' post that has little bearing on anything.

After returning from Steak 'n Shake's (SNS) Investor Day last Tuesday, I have had a few nights to sleep on the developments, curb my enthusiasm, and use the entire balance of the $15 gift card  that was handed out to all of the attendees (my dividend for the year!).

The bottom line is that I fundamentally don't understand Mr. Market's estimation of worth for the company- it is a valuation where the underlying assumption must be that this company, which was started in the middle of the Great Depression (which currently, has next to no debt on the books) can not weather this credit storm; has underlying real estate that must be worthless; and new management is inept... I don't buy in to that.