Leucadia (LUK)

[orangetea]

I am just looking at the company objectively.
I have no preference currently to like or to dislike.

Just looking forward to what the company has to offer ahead. Not the past...

The pioneers are passing the baton.

Like berkshire, apple, etc, the company managers must be known to be good and shareholder friendly to generate interest and run the company well.

And the business will be run by idiots some day, so i think IBM is doing well in that category.

Leucadia business is kind of complex and till now, even when i don't read the letters by the company, the people on the ground and at large - must be able to know who is next in line... that provides a confidence going ahead.

Just looking at gurufocus for some guru positions, it says a lot that there is no positions after 2013 dec 31.

http://www.gurufocus.com/gurutrades/LUK

Looking at insider buys, so far only one trade last month 4000 shares only.
http://www.nasdaq.com/symbol/luk/insider-trades/buys

Sell
http://www.nasdaq.com/symbol/luk/insider-trades/sells

There is just no catalyst to support the stock price currently, unless the PE comes down or some good dividend is arranged.

[specuvestor]

Cyclone had a thread on this company as well: http://www.valuebuddies.com/thread-2452.html  What intriqued me is why the compounding of this company lags so much behind Berkshire if they employ the same strategy

I think the answer has to do with the succession planning.

Yes it is teported that Leucadia is managed by gifted investors Ian Cumming and Joseph Steinberg.

But Ian is 74 (whos contract ends June 2015 and will not renew) and Joseph is 70 years old.

http://beta.fool.com/scavengerreport/201...lan/16459/

not sure what u mean... aren't they the equivalent of the "younger version" of Buffett and Munger if we can compare them side by side?

Berkshire bought a "float" company but Leucadia bought an investment bank. The difference in mindset is glaring enough IMHO that they are actually not comparable hence the difference in compounding. After 40 years Leucadia is ~US$10b market cap company and the founders own 10% of company.

http://www.forbes.com/sites/thestreet/20...o-buffett/

I'm not saying they are not good. But I am grasping the essence of how compounding is a glaring difference over the long term if the initial actions or ideology are just slightly different. Something of a chaos theory result.

LUK is a very different company from BRK (in terms of investment strategy wise). Though their key concepts (very value based is still the same).

If you are looking at LUK in the past, you would be incorrect to say that LUK is not insurance based. LUK acquired quite a few insurance companies and sold one of them for (i think) a billion USD around end 90s or early 00s.

Cummings and Steinberg just have a tendency to flip assets quickly. They are more comparable to the typical distressed investors. They prefer to buy stuff in bankruptcy auction rather than BRK buying companies with strong moat and etc. Their long term results are quite comparable though (If you only take the first 20-30 years of LUK, you would find that LUK compound at around 25% per annum for more than two decades, which is better than the 40 years BRK record).

Agree. That's my observation as well that they are effectively asset traders than business owners. I tend to be more inquisitive when people say they are mini-berkshire or Asia's Buffett etc, because usually they don't stand up to close scrutiny.

If you look at the last annual report by the founder, LUK compounded at 18.2% in 33 years. Buffett probably did better in first 33 years of >20%. Not forgetting that returns diminishes as size becomes bigger, hence we should compare starting point with starting point. In the first 33 years for Berkshire in 1998, it was worth roughly $106b non-inflation nor crisis adjusted. That's the discrepancy I am talking about. Same philosophy but different execution, something we can observe and learn.

Again I am not saying they are not good but maybe people should stop comparing with Berkshire or Buffett. Or Steve Jobs. They are outliers.

PS it is similar to the multiple threads discussing XIRR vs NAV. I tend to look at NAV or in this case, market cap, which to me is far more tangible.

Another Berkshire-wannabe that misses the mark... few people really appreciate in depth what outliers Buffett and Steve Jobs really are.

http://www.wsj.com/articles/jefferies-pa...1462402055

[specuvestor]

Cockroaches. Point Bonita affected by the  Radiant World saga

Strange I thought factoring is paid to the investor rather than the original debtor.

Point Bonita investors could be forgiven if they’re feeling a bit of déjà vu.

In April of last year, Point Bonita said its two biggest exposures were to commodity trading giants Glencore Plc and Cargill Inc., according to an investor letter seen by Bloomberg. In reality, those exposures were invoices of Glencore and Cargill owed to Radiant World that the commodities trader then sold to Point Bonita, Bloomberg previously reported.

It was the same story with First Brands. The fund had told its investors it had exposure to Walmart Inc. and AutoZone Inc., when it was really invoices of those companies owed to First Brands that the company then sold to Point Bonita.

In that case, it was First Brands that would get paid by clients and was supposed to pass that money on to Point Bonita, until it didn’t.

Point Bonita operates under Jefferies’ Leucadia Asset Management division. Founded in 1979, Leucadia was originally a diversified holding company akin to a smaller version of Warren Buffett’s Berkshire Hathaway Inc., with investments across a variety of businesses, including beef processors, mining companies and auto retail.

In 2012, Jefferies agreed to sell itself to Leucadia, though Handler and Friedman remained the combined company’s top executives. At the time, Leucadia was already Jefferies’ biggest investor, having boosted its holdings in 2011 as the investment bank’s stock slid during Europe’s sovereign-debt crisis.

Leucadia National Corp. changed its name to Jefferies Financial Group Inc. in 2018, when it sold off its meatpacking and auto-dealer businesses. Leucadia has remained the name of the bank’s asset management arm, which provides Jefferies with third-party capital and fee-based revenue.

Over the years, Leucadia entered into strategic partnerships with a string of boutique investment firms, committing capital and providing them with operational support. Leucadia’s investments span public and private markets and the unit managed $65 billion in assets as of the end of February.

Still, the unit has become a regular pain point for Jefferies in recent years.

In 2024, one of its funds — 352 Capital — sued its former portfolio manager, claiming he orchestrated an investment of more than $100 million in Water Station, a suspected Ponzi scheme.

A year later, Jefferies and Leucadia were sparring in court with hedge fund founder George Weiss after his hedge fund empire teetered on insolvency.

Last year brought the First Brands saga. The exposure prompted investor redemption requests, and forced Handler to send a letter to clients to reassure them that everything was under control and that the related losses would not threaten the bank’s financial condition

Leucadia was subsequently sued both by a lender and shareholders for investment losses and for misrepresenting Point Bonita’s risk before First Brands collapsed.

-Bloomberg