R. Philip Bixby, CEO

There’s so many times I’ve let you down

So many times I’ve played around

I tell you now, they don’t mean a thing

Ev’ry place I go, I’ll think of you

Ev’ry song I sing, I’ll sing for you

When I come back, I’ll bring your wedding ring

So kiss me and smile for me

Tell me that you’ll wait for me

Hold me like you’ll never let me go

‘Cause I’m leavin’ on a jet plane

Don’t know when I’ll be back again

Oh babe, I hate to go.

– Leaving on a Jet Plane

Kansas City Life has long been a family affair. Walter E. “Ed” Bixby was named president of Kansas City Life in 1939 and things have been kept in the family ever since. He named his son J.R. Bixby president in 1964. In 1990, it was Walter E. “Walt” Bixby’s turn. In 1998, it was time for R. Philip Bixby – the grand-grandson of the third president and the fourth Bixby in a row to get to be president. R. Philip Bixby’s tenure as the President, Chief Executive Officer and Chairman of the Board of Kansas City Life (OTC:KCLI) has borne all of the trappings of a life blessed by nepotism – a sinecure within palatial headquarters and corporate jets available at his leisure.


Roatan Island

According to Tripadvisor (TRIP), Roatan Island is “a playground for lovers of water sports”. Recommended activities include scuba diving, deep sea fishing, and zip lining before sipping a sunset cocktail by the beach. It is a perfect spot is you’ve tired of taking your corporate jet to the Cayman Islands, Hawaii, Iceland, etc. and want a change of pace. If you’d like to learn more, then ask KCLI management all about it as it was one of their many destinations this past quarter.

If you walked past the stone lions guarding the company’s magnificent façade, you would be forgiven for assuming that this is a $321 billion company. Few would guess at the reality that it is in fact a $321 million company that earned $5 million last quarter (and only $4 million of that was core earnings).

https://www.kclife.com/Company/Files.aspx?type=1&fid=188

Some might consider it odd for such a company to own a twin-jet Falcon 2000.

https://www.libertyjet.com/img/aircraft/Falcon-2000-ext.jpg

The average purchase price is $6 million – more than the entire company earned last quarter. Fortunately, management agreed to get rid of it… because they had just bought a better jet! Presenting the Falcon 2000S:

https://www.bjtonline.com/sites/bjtonline.com/files/styles/bjt30_article_large/public/aircraft/s4-2000s-large.jpg?itok=2ftz74xf

Come fly with me, we’ll fly, we’ll fly away

If you can use some exotic booze

There’s a bar in far Bombay

Come on fly with me, we’ll fly, we’ll fly away

Come fly with me, will float down to Peru

In llama-land there’s a one-man band

And he’ll toot his flute for you

Come on fly with me, we’ll float down in the blue

Come Fly With Me

A Falcon 2000S typically runs about $25 million, so why would you make the change? To start, the newer jet can carry a heavier payload. It has a range of about 3,600 nautical miles, about 500 miles further than the older model. This allows users to reach favorite locations such as Iceland and Hawaii. Most importantly, it is fast! It can travel at Mach 0.8 to get you to your favorite spot without delay. A particularly prized advantage of this model is its ability to land at airports in exotic locales with steep approaches and short runways (relevant to approximately 0 legitimate business trips, but lots of fun vacation spots). On the other hand, it burns even more fuel – 263 gallons per hour instead of 259 on the older model which, you will no doubt agree, is a small price to pay (as long as you are not the one paying). If you would like to learn more about the life of Kansas City Life’s CEO, the check out this stunning video from Dessault on his latest ride.

I love his choice in jets and apparently he does, too. Here are the most recent flights from the past 90 days (a period in which the company earns $5 million):

(Source: Publicly Available Sources Prepared by Third Parties)

That offers a glimpse into the Bixbys jet setting lives with other junkets to Hawaii and Europe.

Yeah, yeah (Jumpin’ on and off the jet)

Yeah, yeah (Jumpin’ on and off the jet)

Yeah, yeah (Jumpin’ on and off the jet)

Yeah, yeah (Jumpin’ on and off the jet)

Yeah, yeah (Jumpin’ on and off the jet)

Yeah, yeah (Jumpin’ on and off the jet)

Yeah, yeah (Jumpin’ on and off the jet)

Yeah, yeah (Jumpin’ on and off the jet)

Jumpin on a Jet

Meanwhile, shares languish at less than half of their book value.

Shareholders have essentially given up, but it doesn’t have to be this way. There are two solutions to today’s problems at KCLI. First, they could act like the stewards of a publicly owned company – hire for merit and fly on coach. Sell the plane. Sell the building. Heck – sell the lions. Or alternatively, keep acting like the owners of a private company with stone lions, fancy real estate, corporate jets and nepotism from here to Reykjavík. They could even upgrade the jet. Just take the company private first. Competently managed, there is no reason for this to trade at less than book value. Take it private at book, then your vacations will become none of my business.

Please contact me with any questions or interest in Sifting the World.

It’s not given to human beings to have such talent that they can just know everything about everything all the time. But it is given to human beings who work hard at it – who look and sift the world for a mispriced bet – that they can occasionally find one.

— Charlie Munger

Disclosure: I am/we are long KCLI. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: The information contained on this article is not and should not be construed as investment advice, and does not purport to be and does not express any opinion as to the price at which the securities of any company may trade at any time. The information and opinions provided herein should not be taken as specific advice on the merits of any investment decision. Investors should make their own decisions regarding the prospects of any company discussed herein based on such investors’ own review of publicly available information and should not rely on the information contained herein. The information contained in this article has been prepared based on publicly available information and proprietary research. The author does not guarantee the accuracy or completeness of the information provided in this document. All statements and expressions herein are the sole opinion of the author and are subject to change without notice. Any projections, market outlooks or estimates herein are forward-looking statements and are based upon certain assumptions and should not be construed to be indicative of the actual events that will occur. Other events that were not taken into account may occur and may significantly affect the returns or performance of the securities discussed herein. Except where otherwise indicated, the information provided herein is based on matters as they exist as of the date of preparation and not as of any future date, and the author undertakes no obligation to correct, update or revise the information in this document or to otherwise provide any additional materials. The author, the author’s affiliates, and clients of the author’s affiliates may currently have long or short positions in the securities of certain of the companies mentioned herein, or may have such a position in the future (and therefore may profit from fluctuations in the trading price of the securities). To the extent such persons do have such positions, there is no guarantee that such persons will maintain such positions. Neither the author nor any of its affiliates accepts any liability whatsoever for any direct or consequential loss howsoever arising, directly or indirectly, from any use of the information contained herein. In addition, nothing presented herein shall constitute an offer to sell or the solicitation of any offer to buy any security.



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