Via Jefferies a letter on Leucadia acquisition
We usually use this space to share our thoughts regarding the markets, our respective challenges and opportunities, corporate culture, the uncertainties in the world that each of us regularly faces and other topics we hope are of mutual interest.
This quarter, we share with you some of the highlights of the last of 35 annual letters written by the founders of Leucadia, Ian Cumming and Joe Steinberg. The parts of their letter we are sharing are the beginning and the end of their 2012 annual letter, which provide some perspective on Leucadia, the process of management transition and, in the end, the humanity and character of two exceptional people who happen to be among the best long-term investors in the world.
We also provide here a link to the entire letter (embedded below) for your enjoyment and education should you wish to read about their path from a small shell of a company in 1978 into what today is a pre-eminent and well-respected $10 billion equity market capitalization diversified holding company (of which Jefferies is the largest operating engine).
Our relationship with Ian and Joe traces its roots to Andrew Whittaker, our Vice Chairman and longstanding close partner. In the letter you will read below, Ian and Joe credit Andrew with introducing them to their most successful investment ever, Fortescue, but in fact his contribution to Leucadia National began over 25 years ago when he became their “go to” investment banker, the type of
relationship he now holds with an incredibly large number of our longstanding
clients and friends.
Indeed, it was Andrew who introduced Rich to Ian and Joe, and together Andrew and Rich built the relationship that today is manifest in the combined Leucadia and Jefferies. So we also take this opportunity to recognize Andrew, a selfless and tireless leader within Jefferies and, without whose vision, intellect, integrity and partnership, neither Jefferies nor Leucadia would be where we are.
We believe the messages in Ian and Joe’s final Annual Letter are abundant, but here are the themes that struck us:
1. It is hard to build a truly valuable enterprise by yourself. Having true partners lessens the burden, improves the odds of success, helps minimize mistakes, and is more fun.
2. Long-term greed almost always beats short-term greed. There really are no good shortcuts.
3. Long-term value can be created as long as you protect your company from the inevitable market panics and setbacks. If showing up is 90%, always staying in the game may be the other 10%.
4. It is hardest to buy when everyone is selling and vice versa, but that is always where value is created or protected.
5. Being humble and devoid of arrogance makes it a lot easier to build wealth and increases the odds you don’t
6. At the end of the day, we only have our reputations.
7. There is nothing wrong with a little luck along the way.
We could go on about Ian and Joe. The bottom line for us is that they have taught countless lessons for which we will
always be grateful. We take our new responsibilities at Leucadia incredibly seriously and view this as an opportunity to continue to build a world-class, diversified investment and merchant banking firm. There is a lot of work to do and, as you may imagine, we view it as a marathon and not a sprint.
Please enjoy Joe and Ian’s final letter,
Rich and Brian