Investments update …
April 09, 2008
By: 
Arohan
Category: ACAS, BAC, BRKA, C, CFC, EPI, Investing, LUK, MKL, Personal Finance, SLT, WM, WSCI
A quick note regarding several investments that were recommended (and the author took a personal stake at the time of recommendation).
WSCI: WSI Industries was recommended as a growing metal working company with excellent prospects. I took a position in the company in the $4-$5 range several months ago. In the last one month, I have liquidated my entire position in the company in the $9-$10 range for close to a double. Very satisfying return for a few months work. The stock today is trading close to $14. If I had held for another month, I could be looking at a triple instead of a double. But I have no regrets. The company is approaching 40 PE and is getting quite frothy at these levels even if you take into account their projected growth for the next few years.
CFC:I am still holding Countrywide. If you recall, the play here was to buy Countrywide as a cheaper way of getting into Bank of America. The risk is that the Bank of America acquisition of Countrywide may not close. I am still comfortable in my position and will continue to hold
WM: I am still holding Washington Mutual and am currently underwater. However I am willing to wait out the current crisis of confidence as I think the company is taking the right steps to ensure that it survives
C: I have since my last writing on Citigroup increased my position in the company. The company is very quiet on what they are doing to improve their capital structure. However, they recently entered in an agreement to liquidate a part of their debt portfolio (to private equity) for about 10% discount. I think the company will correct course and come out stronger than many expect and in 3-5 years time should reward a patient investor handsomely
Additional notes: I have also increased my stake in BAM (Brookfield Asset Management), MKL (Markel), ACAS (American Capital Strategies), LUK (Leucadia), SLT (Sterlite Industries) and added positions in BRKB (Berkshire Hathaway B shares) and EPI (Wisdomtree India ETF)
Please note that if you choose to act on any of the recommendations/ideas outlined above, make sure that you conduct your own due diligence and understand the risks you are taking. I am not a financial advisor
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April 12th, 2008 at 9:37 pm
I have a small position with E-trade, I think that it can’t fall any farther…
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April 14th, 2008 at 9:44 pm
Gene, if E-trade survives, you will do really well. I have not looked into them enough to determine if I would invest in them. This may be a good due diligence candidate for the weekend. Thanks!
April 15th, 2008 at 6:48 am
[…] Investments update … A quick note regarding several investments that were recommended (and the author took a personal stake at the time of recommendation). WSCI: WSI Industries was recommended as a growing metal working company with excellent prospects. … […]
April 17th, 2008 at 12:42 am
Just found your blog and I have to tell you I really like it. I have a position in ACAS as well and I am thinking of adding to it since it is about 10% below my basis. What do you think (as a hypothetical as to defer people thinking this is a recommendation)?
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April 17th, 2008 at 2:46 am
Thanks Dusty for stopping by! Don’t forget to subscribe to the feed.
It would appear this is a good time to add to ACAS position and I have been doing that when I can. The dividend is enticing, but more than that the price is low cause people somehow think that their asset quality is suspect due to subprime issues. Nothing could be further from the truth. In reality, ACAS is trying to benefit from the values that have been driven down to the ground by the subprime fallout and should do really well when the market returns to normal