Hunting in Packs - Sam Biglari -- El Pollo Loco (LOCO)
Investing is a lot like fishing or poker -- it takes patience and discipline. I've found that some of my best trades have come about because I did my research early, had conviction, and then entered the terms of my trade in hopes it would be filled when the market met my expectations -- NOT the other way.
My Mansa Musa network often helps to shape my thinking and when we execute trades together or hunt -- we often make money together in business, real estate, investing, etc. When I combine all these concepts or mentalities into one you get the Mansa Musa Mentality. Arguably the richest person in history, Mansa Musa, ruled over a large empire and put cities like Timbuktu on the map as they were known for their cities and libraries.
This posts is an example of how the #MansaMusaMentality work and how I use my extended network to invest. Almost like a case study, I'll highlight how these contacts guide me on investments such as buying real estate, stocks, precious metals, cryptocurrencies, etc. And I want to foster a community culture, so I'll show you how I learn from them and maybe in the future we can crowdsource or here we call it #tribesource investment ideas for the future.
"Detail" - A Breakdown of my El Pollo Loco (LOCO) Investment
Research Timetable: August 2023
Research Details:
I read a really good article about Sam Biglari, an investor, who is in my Mansa Musa network. He has been a major investor and had a significant impact over Steak 'n Shake. Now it's time to show my age. When I was growing up Steak 'n Shake was a cool place to take a date. It reigned supreme as a late-night spot with low expectations. This was two decades ago, but I felt like it had commonality with grease -- greasy meal with greasy floors. You had to walk carefully but as a youth it was all good because you and your date were only there for the "shakes". The shake never failed you. Fast forward, one of my employees was telling me they eat occasionally at Steak 'n Shake and even called it clean. My interest perked up because I had over the decades disowned the fast-food shop for exactly the opposite reasons. I got more intel and recently tried it with my young kids. In fact, it was clean, they now had a drive-thru, and the food was hot which is a step up from the off-the-assembly lines fast food chains.
The article I read back in August detailed how Sam made investments into the company years back which was in a dire situation. They turned a profit back in 2021 and shrewdly closed about 90 locations. Adding drive-thru gives them an opportunity for more volume as they become of a fast-food restaurant and reduces costs from less dining in.
Huntin' In Packs Alert: Sam's picked up a large stake in another restaurant chain El Pollo Loco. By buying an ownership stake around 9% of the entire restaurant chain ($33 million dollars) I decided it was worth riding shotgun with my guy Sam.
The Setup: Check the stock chart above back in August 2023. The stock was trading around $11 dollars a share. Now me, I remember was candy bars were .50c so I like value. If I don't see Reese's Cups selling for this level -- I pass. Same with my trades, I like to build a margin in by betting on the lower side of where a stock has been trading. I did my research (usually by analyzing the stock's movement in the last year) and set a price I'd like to get in around $8-9 dollars a share. I put the trade in my account in August and it hit in November. The stock dipped to $8.60 range and my trade hit!
Don't Believe Me Just Watch - This is what I said literally back in August:
Call me crazy, or should I say LOCO, but let's see how our trade does. I like LOCO around the $8 level and for I'll enjoy hunting with Sam.
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