Leucadia Execs Buy at Bargain Prices

After reading about Leucadia National (LUK) in BusinessWeek, April 14, 2008 issue, I (RAH) went to the Internet and found three letters to LUK shareholders from Chairman Ian Cumming and President Joseph Steinberg.

In the 2006 letter, they list the Rules of the Road that guide their investing style. The first rule, "Don't overpay, no matter what the madding crowd is up to", is a universal rule for any type of investing activity. And Cumming and Steinberg apply this rule when they buy distressed, but promising, companies at low prices.

Looking at the chart of LUK, you can conclude that Cumming and Steinberg heed their own advice and that it pays off. The stock has been on a steady upside for years, and even in the current down market LUK is trading near its all-time high.

Whether you are buying stocks, bonds, commodities, a house, rental property, a business or whatever, don't pay too much. And when the crowd is in a buying frenzy and claiming that prices will go up forever because "it's different this time", step back and wait for prices to decline.

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Posted April 10, 2008.

Leucadia Execs Buy at Bargain Prices

Leucadia Execs Buy at Bargain Prices