Portfolio update

One of my bigger holdings going into 2013 was MBIA. It has worked out pretty well right after the settlement. Although there is still plenty of upside from the ratings upgrade, I decided to sell out of my MBIA position completely. There were just too many opportunities that were likely to work out before MBIA’s rating upgrade.

I’ve also gone to a bit more diversified portfolio. My top 2 positions still account for over 45% of my portfolio, and top 4 account for 80% of the portfolio. The remaining positions are less than 5% each.

I bought up the following stocks:

Sears Holdings (SHLD): After the most recent quarterly numbers, the stock got hammered. Everyone is so focused on the retail operations that the stock is selling at huge discount to liquidation. Now Sears cannot liquidate that quickly. But the company has been doing lots of work to build up a structure that shows the break-up value of Sears. And the break-up value of Sears is multiples to current market valuation.

XPEL Technology (XPLT): The company makes auto paint protective film. If you got one of those collectible cars or the luxury cars, then you are an ideal customer. XPEL’s film is used to protect car paint from scratches, dents, and weather. The company is growing very rapidly, is profitable, and has the best product in the market. This is a microcap company that was rarely trading. Although in the last few weeks, the trading activity has picked up quite a bit, largely due to the VIC write-up. The company hasn’t made a major push in PR to get the investment word out, but I expect 2014 to be the year they start more Investor Relations activities. I believe this one will be a multi-bagger in a very short period (it is almost a double from my purchase price, in about a month).

Fannie Preferred (FNMAS): This is one of those where I just copy Berkowitz. The play on this is very well known. Berkowitz and other investors have filed a lawsuit against the government regarding the gov’t taking over all the profits. I think the odds are very good that investors will walk away winners and will make multiples on their investment.

Basket of micro-caps: This is a theme that is based on my view that we are in for a great few years for the US economy. I think the economy is doing well, not great, and it will keep getting better. These small micro-caps were selling for extremely cheap valuations. So my investment is based on the cheap valuation and the strong upside if the US economy does well.