A few weeks ago, I bought up a post announcing I had been accepted to valueinvestorsclub.com (VIC) with a submission on IEHC. Since that time, I’ve gotten several emails asking something along these lines
Following up on last week’s post on annual results, and my post at the beginning of the year, I thought I’d provide an update on what my current top holdings are.
On Weds, Gramercy (GKK) announced the completion of their strategic review, a new direction for the company, and a new CEO. There were quite a few moving pieces here, and I’m going to hold off on judgement until we see their new plans for the company (which should come in the next two-three months), but here are my initial thoughts.
First, a housekeeping note- sorry for the lack of ideas. I’ve been absolutely swamped at work and haven’t had time to investigate new ideas. I’m not normally one for emoticons, but if I were, I’d put a sad face here.
Gramercy (GKK) reported a really interesting quarter yesterday. Since I’ve written them up quite extensively previously, I’m going to post my quick thoughts and then some key take-aways in bullet form. Note that I’m traveling, and their 10-k is about 300 pages long, so I’ve only had time to go through the press release.
Quick house keeping note- I am traveling for the next two and a half weeks with spotty internet access, so posts might be a bit limited. I caught up to most of my emails and comments today, so I should be in contact!
I’m going to do something a bit different with today’s post. I’m going to start by quoting the last paragraph I wrote to (hopefully) whet you appetitie, and then go into the post.
“And that’s why I like GKK so much. The company has a ridiculously strong balance sheet at the corporate level. The common equity is basically a net net. Investing in the preferreds has all the kick of investing in a net net- except with a hard catalyst (dividend payment, either in the near future or once the board is taken over) and even if the catalyst takes a bit longer to realize, it will still result in either very nice or outstanding annualized return. All this for a security with ridiculous amounts of asset coverage and a huge margin of safety.”
2011 was one of the worst years on record for deep value strategies. Despite a late run by a couple of my stocks (thank you, Ansell!), my portfolio will end the year ~6% down. It’s pretty disheartening to end any year down, but overall I think the year was pretty successful for me as an investor. I’ve only been investing for 3.5 years, and I’m continuing to evolve and improve as an investor- I think that’s pretty clear if you compare the depth and level of analysis from posts at the beginning of the year to recent posts- and given that I plan on managing much larger sums in the future, that’s pretty important. I’m also thrilled with my portfolio today and excited for its prospects heading into 2012.
That said, here are my top 5 holdings heading into the new year- you’ll notice quite a few similarities between these and my top 5 net/net posts earlier.
In my write up on Gramercy (GKK), I briefly mentioned a competitor, Newcastle (NCT). Interestingly, reviewing NCT’s financials is what gave me confidience for making my investment in Gramercy, as Newcastle is kind enough to go in to much further break down of their balance sheet and their recourse vs non-recourse assets and liabilities. Seeing this helped me picture what Gramercy’s non-recourse balance sheet would look like.