Portfolio Update -- Up 37.5%

Eric Schleien
Well I decided to check out my performance the other day since I hadn't really calculated it in several months. I am pleasantly suprised. First of all I just sold my latest "cigar butt" investment, Euroweb, and it gave me a nice 30% puff as you could call it. That's all I was looking for. As some of you may know I have a large amount of my net worth in Mod-Pac and have the loss of Vistaprint to blame for the insanely good price I got on those shares. So even though Vistapring hurt Mod-Pac's business temporarily, I would like to thank them as well. Fortunately my big bets have done well this year. At the beginning of the year I put nearly 80% of my net worth into the most profitable, in my opinion, publicly traded steel company in the world (IPSCO is up there too though). To top that off the company is a monopoly and was also trading below book value. Pohang Iron and Steel in South Korea was the start to another year of outperformance. Unfortunately along the way I made a lot of very mediocre investments which had a slightly negative impact on my portfolio. Luckily I was able to get out of Handleman and Dominion Homes before the shares tanked and things got worse. Both of these companies are still cheap but I honestly have no idea if they will make good investments or not. I hate risk and sold these securities. I also haven't been patient enough. I sold out of Lazare Kaplan very early and missed it's true "cigar butt" last puff. Like many of these last puffs the companies shares again deflated on a bad quarter. If things get worse I might take a position in Lazare Kaplan as it's diamonds are worth more than it's market cap. (Maybe Lazare Kaplan should just pay a diamond dividend and liquidate). Currently I have a very small investment in a small holding company whose marketable securties made up of mosty muni's and other low risk securities are worth more than the market cap. As it isn't as much as a discount as I like, the management is buying back shares therefore I will allow for a smaller discrepancy in liquidation value as the mgmt recognition of the shares being undervalued gives me a larger margin of safety. I also screwed up with my Parlux Investment as I sold it for a loss after Ilia Lekach's nephew was blabbing about some deal. Being the ethical investor that I am, I sold my shares in Parlux as I want nothing to do with insider information. I would advise Ilia to stop blabbing as well. My favorite investment right now is a company which trades way below liquidation value. It has assets worth anywhere from 40 to 400 million dollars and the current market cap is under 10 million dollars. I honestly don't know what a catalyst for this company's share price is but I'm not much for investing with the need of a catalyst in the first place. The share price eventually becomes efficient the question is rather how long eventually is. I also recently purchased shares in a company that does food processing and shipping. Management is top notch and they know how to weather out cyclical downturns (such as this year). The stock is flat with their industry having a decline this year. And of course I will now say how pissed off I am I sold Scottish Re as early as I did as it is up well over 100% since my purchase.
Here's how I have fared compared to the S&P 500 since I have started this website.
In 2005 I was up 13.3% and the market was essentially flat.This year I am up 37.5% and the market is up roughly 10%.
Of course I do not expect my returns to be sustainable as I don't always expect to find the stocks I have been finding. I feel one day these situation might go away but until then I will keep doing what I do.