Leucadia: Ian Cumming on Commodities, Globalization, and China-Secrets of Success
In yesterday's Guru Focus (gurufocus.com) there was a wonderful post that quoted from Leucadia's Ian Cumming, the chairman of Leucadia National ICorp (LUK) Gurufocus provides a great deal of information about highly successful and well-known investors ranging from Buffett to Wally Weitz. It is well worth your attention!
The Leucadia record or scorecard as Cumming and his partner Joseph Steinberg refer to it is an incredible example of disciplined investing at its best. Over 29 years, wealth creation of 20.9% has occurred ex dash dividends or spin-offs, just slightly less than the returns of Berkshire at 21.4%.
From the letter to LUK shareholders, the approach is expressed simply and elegantly:
The "Rules of the Road "are another great enunciation of sensible investment practice:
1. Don’t overpay, no matter what the madding crowd is up to.
2. Buy companies that make products and services that people need and want and provide
them as cheaply as possible with consistently high quality. Lower cost and higher quality
is a relentless and never-ending task.
3. Earnings sheltered by NOLs are more valuable than earnings that are taxed!
4. Compensate employees for performance and expect hard work and honesty in return.
5. Don’t overpay!
I will have further comments on Leucadia in subsequent posts. In the interim, I highly commend the letter to your attention. Leucadia Letter link
Disclaimer: I, my family, or clients have a current position in Leucadia.
The Leucadia record or scorecard as Cumming and his partner Joseph Steinberg refer to it is an incredible example of disciplined investing at its best. Over 29 years, wealth creation of 20.9% has occurred ex dash dividends or spin-offs, just slightly less than the returns of Berkshire at 21.4%.
From the letter to LUK shareholders, the approach is expressed simply and elegantly:
We tend to be buyers of assets and companies that are troubled or out of favor and as a result are selling substantially below the values which we believe are there. From time to time, we sell parts of these operations when prices available in the market reach what we believe to be advantageous levels. While we are not perfect in executing this strategy, we are proud of our long-term track record. We are not income statement driven and do not run your company with an undue emphasis on either quarterly or annual earnings. We believe we are conservative in our accounting practices and policies and that our balance sheet is conservatively stated.
The "Rules of the Road "are another great enunciation of sensible investment practice:
1. Don’t overpay, no matter what the madding crowd is up to.
2. Buy companies that make products and services that people need and want and provide
them as cheaply as possible with consistently high quality. Lower cost and higher quality
is a relentless and never-ending task.
3. Earnings sheltered by NOLs are more valuable than earnings that are taxed!
4. Compensate employees for performance and expect hard work and honesty in return.
5. Don’t overpay!
I will have further comments on Leucadia in subsequent posts. In the interim, I highly commend the letter to your attention. Leucadia Letter link
Disclaimer: I, my family, or clients have a current position in Leucadia.
posted by Rick @ 4:57 PM
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