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Biglari Holdings Inc. Message Board

  • art_vandelay_7 art_vandelay_7 Jan 2, 2012 10:16 PM Flag

    TLF income

    BH closed last year @ 410. It closed this year @ 368.

    Since it makes up such a large portion of TLF assets, I doubt that TLF had a return > which case BH wouldn't make any money from Biglari Capital.

    Of course, Biglari himself earned incentive comp since BH earned > 5% ROE. I bet he's awfully happy he made that "trade"...

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    • Big Larry Guru should purchase the assetmanagement business of emerging superallocator Sanjeev "Cash Bar" Parsad. Recognizing the resulting fifty cent dollapalooza, I am certain CharlesTMunger himself would be buying shares of BH.

      Buy my books!

    • Art,

      I couldn't agree more, but I am willing to put my money in this at $300 - $350 per share. In terms of ethics and shareholder friendliness, the compensation plan makes no sense.

      However, I think that when you consider Big is a di-k and the fcf, the stock still has value at the right price. Full disclosure, this will not be a big part of my portfolio.

      Still heavy into Loews and just bought some GE last week.

      • 1 Reply to dbraem09
      • Regarding Big's incentive arrangement: I have been to all the annual meetings and Big has said consistently, on more than one occassion, that investing in BH is analogous to investing in a publically traded hedge fund. Now if you evaluate his compensation on that basis it may be considered reasonable. While most hedge funds get 2 and 20 without any hurdle, BH gets 25% of the increase in book value after a 6% hurdle. In addition he is obligated to use 30% of his incentive compensation to buy BH stock on the open market within a specific period of time after the incentive is paid. Although I would have liked the 25% to be 15%, and the hurdle to be 10% because unlike a hedge fund the investible money in BH is captive, I am willing to live with this arrangement because he has a strong incentive to increse the price of the stock.

374.98-0.72(-0.19%)Nov 24 4:02 PMEST