Notes from Biglari Holdings' Annual Meeting

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Frank Voisin
Apr 26, 2012
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The Brooklyn Investor published his notes from the Biglari Holdings (BH) annual meeting. I am consistently impressed with Sardar Biglaris letters which I consider a must read. In these notes, Biglari covers the value of activist investing, Steak n Shake performance and his recent fight with Cracker Barrel (discussed here).

Value of Activism

One chart Biglari showed at the beginning of the annual meeting was what happens to an investment if bought for 50 cents on the dollar and comparing that to what happens to this investment if they can participate on the board of a company and help it grow value to $2.00. Now you are talking about turning $0.50 into $2.00 instead of $1.00.

So if they can buy $1.00 of assets for $0.50, the return in 5 years would be 15%/year. But if they can participate in value enhancement to get the value up to $2.00, that would boost the return to 32%/year instead of 15%/year.

A key point is that even if the activism doesnt work out, they should do well.
For those who follow Biglari, check out TBIs notes here.

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