Recently two stocks I sold have had been on a tear. I sold Value Vision (VVTV) and IGO (IGOI) for some pretty substantial gains. I sold IGOI for a %120 gain after holding it for 5 months in a tax deferred account. I unwound VVTV in lots ranging from %870 to %300 gains in taxable and tax deferred accounts. The proceeds were re-invested in other positions which have performed well but in the short term I left some money on the table by not keeping the positions I had. Keyword here being short term.

I spend a lot of time thinking about my actions trying to determine if I made the right or wrong decision and if I made the wrong decision, what lesson I need to take from the experience to apply to future endeavors. So of course one of the questions I asked myself is did I

• 16.55% Biglari Holdings (BH) – This a combination of SNS stock I purchased in between $10-$15 per share (pre reverse split) and stock I received from the WEST transaction. The performance of BH has been great, although I really struggle with what I will call the “shenanigans” of Sardar Biglari and what appears to be his obsession with BRK fast track, except of course on the CEO compensation front. I have recently thought about exiting or at least reducing exposure here, but I have been defaulting to “Lethargy, bordering on sloth”.
• 14.11% Istar Financial Preferred Series G (SFI-G)

I was reading this Fat Pitch Financials post and saw mention of Bristol Myers Squibb (BMY) offering their remaining ownership of Mead Johnson Nutrition (MJN) in exchange for BMY shares.

Bristol Myers did a public offering of MJN earlier this year and the stock has risen nicely since then. Mead Johnson was started in 1905 and acquired by Bristol Myers in the 1960s.

Quick info about MJN

From their website:

We are Mead Johnson Nutrition — a global leader in infant and children’s nutrition.
We are best known for our Enfamil® and Enfalac® families of infant formulas as well as for our regional children’s nutritional products, including Enfagrow®, Enfapro®, Enfakid®, EnfaSchool®, and Sustagen® in Asia, and Choco Milk® and Cal-C-Tose® in Mexico and Latin America.

I like Mead Johnson because its a boring steady business. Infant formula, while it will probably change in the future is not going

At CGI Las Vegas I listened to a presentation by John Del Vecchio from Ranger Alternatives. John manages the Ranger short book and has a strong background in accounting forensics. Specifically, finding companies with low earnings quality before the market does and building “short” positions based on that information.

In his presentation he referenced some stats from a Blackstar Funds paper on the Russell 3000 index between the years 1983-2006.

Russell 3000 stats 1983-2006

• 39% of stocks were unprofitable investments
• 18.5% of stocks lost at least 75% of their value
• 64% of stocks underperformed the Russell 3000
• 25% of stocks were responsible for all of the market’s gains

Well, after reading this, an enterprising investor would obviously be diligently researching, looking for the 25%. If you only invest in those companies you are sure to outperform the market. Well not always…

What a difference a day

As I mentioned in my earlier post I recently read One Up On Wall Street : How To Use What You Already Know To Make Money In The Market by Peter Lynch. Peter Lynch took over the Fidelity Magellan Fund in 1977 when it had $18 million in assets. When he stepped down from managing the fund in 1990 he achieved an averaged %29.2 return and the funds assets sat at $14 billion in assets.

Lynch’s investment style varies quite a bit from the traditional super value investors. Lynch seems more likely to invest in public offerings or companies that have little operating history if he feels they have potential for serious growth. Lynch is willing to take a little risk on situations where there is some uncertainty so some people might call him a “growth” investor. That being said I try to ignore categorizing investors into buckets

IGO (symbol IGOI) devlops and markets power accessories for electronic devices such as laptops, mp3 players and mobile phones. See their corporate website for a more detailed company description.

I initially learned about IGO from an excellent post on OldSchoolValue.com. At the time it was trading below its liquidation value making it a cigar butt with at least one good puff left as long as the management did not blow all the cash. The management has shown good signs of cost containment and even increased it cash position despite dwindling revenues.

I bought IGOI at $0.58 and while it has traded above my cost basis for the majority of the time I held it, it recently jumped up as high $1.30. Looking at almost %120 gain in 6 months I decided to reevaluate my position and see if I should continue to hold to this company now

On Wednesday, the Reuters Blog posted an article by Rolfe Winkler called “Buffett’s Betrayal”.

Rolfe goes on to say:

Today, Buffett remains famous for investing The Right Way…

…But it turns out much of the story is fiction. A good chunk of his fortune is dependent on taxpayer largess. Were it not for government bailouts, for which Buffett lobbied hard, many of his company’s stock holdings would have been wiped out.

The gist of the article is while backing companies like General Electric (GE) and Goldman Sachs (GS) with debt, Berkshire Hathaway (BRK.A) holding stocks like Well’s Fargo (WFC), Bank of America (BAC), and US Bank (USB), Buffett has used his weight to save Berkshire Hathaways and hence his own investments. As a result he is a major benefactor of the bailout. The take away for me is that the author feels that Buffett’s skin in the

Value Vision (VVTV): Multiple entries with an average

Microsoft (MSFT) declared its quarterly dividend Wednesday. In addition it also announced that the board of directors has passed a resolution:

The board also passed a resolution recommending that the company’s shareholders approve amendments to Microsoft’s articles of incorporation to give shareholders representing 25 percent or more of outstanding shares the right to call special shareholder meetings.

The ability of shareholders to call special shareholder meetings is increasingly considered an important shareholder right,” said John Seethoff, vice president and deputy general counsel for Microsoft. “Proposing this new policy is another example of our ongoing commitment to maintaining strong corporate governance principles and practices.

This will be voted on by shareholders in November.

A pro-shareholder move like this from Microsoft’s board is not all that surprising. Considering that Bill Gates is good friends with Warren Buffett and serves on the board of Berkshire Hathaway (BRK.A), you would think that the