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Special Situations Real Money Portfolio April 2008 Update
The Special Situations Real Money Portfolio continued to struggle in April. On April 30, 2008, the portfolio ended with a balance of $13,957.69. This is down from the March closing balance of $14,362.01. Year-to-date, the portfolio is down 12.58%. However, the overall return is a positive 39.58%. On an annualized basis, the Special Situations Real Money Port had a 16.29% internal rate of return since inception (as of April 30, 2008).
The only transaction in April was the tendering of 80 shares of Sybase (SY) in this account. This was an odd lot tender offer where holders of less than 100 shares would be completely cashed out in a modified dutch auction with a price range of between $28.00 and $30.00 per share. The final tender price was $28 per share, so I received $2,240.00 in cash on April 17, 2008 for my shares. Since I bought the shares for a total cost of $2045.35 on March 17, 2008 and there was a $25 tender fee by my broker, I made a total profit of $169.65. This comes out to a 8.3% return, which means this deal produced a 97.7% average rate of return for this one month investment.
If you are interested in other opportunities like the Sybase tender offer, subscribe to Fat Pitch Financials Contributor’s Corner. Contributor’s Corner in a premium online community and database packed with special situation opportunities. You’ll also be able to review the complete current holdings of the Special Situations Real Money Portfolio and its full transaction history.
Finally, I’m happy to report that the Special Situations Real Money Portfolio has improved dramatically so far in May. As you may have noticed from the live portfolio performance reported in the sidebar, the portfolio is now only down 5.59% year-to-date and will likely move into positive territory again for the year when I receive cash for a going private transaction that recently completed. I’ll let you know at the end of the month how things turned out.
Disclosure: None of the stocks mentioned in this post are currently held.
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Sotheby’s Added to the Fat Pitch Port
Today I added shares of art auction house Sotheby’s (BID) to the Fat Pitch Financials Portfolio. The shares were purchased earlier this morning for an average price of $24.55. As is typical with any new purchase, shares of Sotheby’s dropped further today to a low of $23.75. It always seems like a little pain is needed before gains can be had.
Regardless, I am very excited about this purchase. It is very rare to be able to pick up shares in monopolies or duopolies for such a low multiple. Even though there may be a bubble in the modern art market according to some reports that I’ve read, other art sectors haven’t seen as much appreciation. Even if the modern art bubble deflates, art collectors will continue to use art auctions in the future regardless of current art prices. The choice typically comes down to either Sotheby’s or Christie’s when selling major works of art. I like those type of odds. Basically, Sotheby’s is a toll both on the road to obtaining fine art.
I expect that Sotheby’s may get a bit cheaper if this housing led recession starts to impact the super wealthy. However, unless things get much much worse, it is unlikely that the wealthiest, with their multiple income streams, will be sufficiently impacted by the economy to curtail their purchases of fine art and collectibles. If I’m a bit too early, I still have sufficient cash reserves to buy additional shares at an even lower price.
Disclosure: I own shares of Sotheby’s.
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Festival of Stocks at Stock Market Prognosticator
The 88th edition of the Festival of Stocks is up at Stock Market Prognosticator. There were articles this week covering Ingersoll-Rand (IR), Investortools (SWIM), AeroGrow (AERO), Dover Corp (DOV), AIG, Melco PBL Entertainment (MPEL), Coca-Cola Company (KO), and Google (GOOG). I was impress by the number of companies covered in this week’s Festival of Stocks.
I hope next week’s edition brings in just as many articles analyzing stocks. Be sure to visit the Festival of Stocks homepage to learn how to submit entries for next week’s Festival.
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Weekend Reading - Post Berkshire Edition
This weekend’s reading list is actually my own reading list. I was on business travel this past week in Port Townsend, WA, and I struggled to get access to the internet at my hotel. Thankfully, it looks like Value Investing News worked perfectly even without my activity. Here are the top stories this week that I’ll be reading this weekend:
- 2008 Wesco Shareholder Meeting: Detailed Notes
- NBR Extended Interview with Warren Buffett
- Exclusive Interview With Warren Buffett and Bill Gates
- Live Blog: Warren Buffett’s Q&A With Shareholders (Part 2)
- Live Blog Archive: Buffettstock ‘08 Annual Shareholders Meeting (Part One)
- VIC West Day 2: Part 2- Mohnish Pabrai; Steven Romick
- VIC West Day 2: Part 1- Whitney Tilson and Glenn Tongue ; Aaron Edelheit
- VIC West Day 1: Part 4- Ken Shubin Stein; Robert Hagstrom; Carlo Cannell
- Wesco meeting notes
- Berkshire’s Munger says investors should lower expectations
I’m also happy to announce that Value Investing News will be giving away three copies of Bud Labitan’s new book, The Four Filters: Invention of Warren Buffett and Charlie Munger, for the May Contest at Value Investing News.
Festival of Stocks at Finance ViewPoint
The 87th edition of the Festival of Stocks is up at Finance ViewPoint. This edition brings a bit of an international flavor to the Festival of Stocks since it is written by an Australian.
Finance ViewPoint highlighted three editor’s picks: Allocate 50% to Non-U.S. Stocks, According to Wharton Professor, Let Volatility Be Your Friend, and Dividend Stock Wednesday: Hasbro (HAS-N). My Ultimate 2008 Berkshire Hathaway Annual Meeting Guide was also included in the Festival of Stocks. Be sure to check it out if you haven’t already.
As always, you can catch up on past editions by visiting the Festival of Stocks homepage. There you can also learn how to submit entries for consideration for next week’s Festival of Stocks and you can also find information on how to host a Festival of Stocks on your own blog.
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Ultimate 2008 Berkshire Hathaway Annual Meeting Guide
If you couldn’t make the 2008 Berkshire Hathaway (BRKa) (BRKb) annual meeting to experience Warren Buffett and Charlie Munger first hand, then I hope that the following guide can again offer the next best thing to being there in person.
We can kick off this year’s meeting with the press release and the Q1 quarterly report for Berkshire Hathaway.
I also got word of a Berkshire Hathaway Annual Meeting after party at Nomad Lounge.
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