Leucadia National Corp. (LUK)

likestofocus (92.38) Submitted: 2/19/08 6:26 PM : Start Price: $46.64 LUK Score: 1.79

C & S are brilliant investors. Compounding book value at over 20% for 3 decades.

The iron ore mine in OZ is coming on line this year. Same for their interest in a copper mine in Spain. Recently bought 20% of AFC at a fraction of its 52 week high. Bought more raw land in Florida during the bust. Still sitting on a bundle of cash. Buffet approves of them. Buffet put up 90% of the funds for Bercadia and let C & S run it. They have a gasification plant in Louisiana under way. They bought the rights to build a LNG plant from Calpine at fire sale prices. Their letters to the shareholders rival Buffet's in terms of clarity and wit. They are so honest they admit when they make a mistake instead of trying to gloss it over.

Book value is understated. For instance they invested 100 million in a bond for the iron mine in OZ. Since it is a revenue bond that ends in 11 years Leucadia is carrying on their books as a zero coupon bond with a value of $22 million. Lots of examples like that if you read their shareholder letters.

These guys think in terms of years. they don't care what Wall St thinks. Since they buy disheveled companies, fix them, then sell for a large gain this is not a buy and hold forever company. This is a buy and hold as long as at least C or S is still there. Not sure who is being groomed as an heir. C & S still may have another 15 to 20 years to go. Charlie Munger is 84 or still firing on all cylinders.

In real life I have 30% of my portfolio in this company. Only BRK.B holds a larger place at 35%.

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