mevsemt

No worries on the posting hyten1, I appreciate the feedback and in the case of the nav method I think I may start doing exactly what you're doing - using nav for ytd and xirr for annualized return over the life of my portfolio. If you don't want to clutter the board feel free to email me at mevsemt@gmail.com (warning: when it comes to investing i may talk your ear off!)

Thanks for the explanation hyten1, now that I understand what you mean it definitely makes sense. I guess the one draw back is anytime you make a signifcant deposit it dramatically changes the composition of each share (ie larger cash % per share). For me personally, I can't go back and recreate this b/c I don't know what my account balance was on the day of my deposits... I also agree with your comments on the IRR method... BUT in my case I've been tracking my returns for 5+ years and plan on continuing to track them for many more, so any short term IRR swings caused by deposits go away over time.

hyten1 - I'm not sure exactly what you mean... Also note the xirr function looks at amounts and timing of new money when calculating the rate of return...

Oddballstocks - that's exactly what I do, but the point rijk was making (and correctly so) is that the XIRR function gives you an annualized return, not a YTD return. So if actually wanted to recreate my spreadsheet just for 2011 you could go here (http://mevsemt.blogspot.com/2011/01/alls-well-that-ends-well.html) to get my 1/1/2011 balance, you could go here (http://mevsemt.blogspot.com/2011/04/adding-money.html) and here (http://mevsemt.blogspot.com/2011/06/adding-money-again.html) to see when I added money, and then you could just go to my last post (http://mevsemt.blogspot.com/2011/06/q2-2011-returns.html) to get my Q2 ending balance - the XIRR function will give you 12.4%. This is all summarized here, and actually goes back to the beginning of 2006 when I started tracking returns (http://mevsemt.blogspot.com/p/my-returns-so-far.html).

That's a good point rijk, and I should've explicity said that in my post, my apologies... But since I've made deposits during the year any sort of YTD performance I quote would need an astericks. For example, the deposit I made in June doesn't have six months of returns behind it, so I'm not sure how that should be reflected in a YTD number...

http://mevsemt.blogspot.com/2011/06/q2-2011-returns.html I'm up a little over 12 percent, check out the link above for details...

http://mevsemt.blogspot.com/2010/08/investing-checklist.html

Thanks!

That's what I assumed initially too. BUT then don't you have to assume that each warrant only entitles you to 1/10th of a share (since the warrants didn't go through the same 10-for-1 reverse split)?

Does anyone know how the terms on citigroup's TARP warrants were adjusted after the reverse stock split?

Even if Eddie has no plans on merging Gap and Sears (which at this point is nothing more than idle speculation) I would encourage people to take a look at what's happend over the last 15 years at Autozone. Basically, in 1997 Eddie began building his AZO stake through ESL and acquired enough shares to get himself elected to the Board. Between 1997 and 2001 AZO's stock bounced around madly, going back and forth between 20 and 40-ish. During this timeframe Eddie used share repurchases to shrink Autozone's share count from 150 to 100 MM (and I'm sure there were plenty of people saying things like "he was buying back shares at 38, and now they're at 20 today, so clearly he doesn't know what he's doing...") Fast forward to today and the stock trades at $290+. In fact, if you look at the 15 year chart there's almost nothing like it. So, even if Eddie has no plans to merge SHLD and GPS, the AZO story gives me some confidence that the Sears story will turn out OK...

It'll definitely be an interesting story to watch. If this is indeed what Berkowitz has in mind AND he's successful it wouldn't surprise me to see other mutual funds do the same thing (Longleaf, Wintergreen, 3rd Ave, etc)

Myth - I think your comparison to Howard Hughes is right in the near to medium term. As I mentioned in my blog, long term (like 10+ years) it wouldn't surprise me if JOE looked like LUK or BAM. Basically, if Berkowitz has an investment opportunity in a publicly traded security it will happen through one of his mutual funds, but my guess is he'll now have an outlet through which he can invest in real estate, private companies, partnerships, etc.

I just bought JOE and did a write up on my blog along these same lines: http://mevsemt.blogspot.com/2011/05/new-coattails-to-ride.html

I just bought JOE for my portfolio and discussed my rationale on my blog, www.mevsemt.blogspot.com, in case anyone's interested. Ultimately, I think there's a distinct possibility that over the next 10-15 years JOE evolves from a real estate company into something more like a LUK of BAM. Thoughts?

A_Hamilton - you're right, but I'm not so sure the Fisher's are 100% committed to keeping it in the family - http://articles.sfgate.com/2007-01-09/news/17226943_1_gap-and-old-navy-goldman-sachs-pacific-growth-equities

Could this be the playbook? 1. Acquire a controlling stake in a retailer (Company A) that has significant “hidden” assets (real estate and/or brands). 2. Do not disclose anything about the financial or operating results other than what is required, in doing so there are 2 ways you’ll benefit: 2.a. Share price is kept low enabling Company A to aggressively repurchase shares at an attractive price. 2.b. Short interest as a % of “free” float will increase dramatically. 3. Through your hedge fund acquire a meaningful stake in a second company (Company B) that also has significant hidden assets or would make strategic sense if merged with Company A. 4. Sell a small portion of Company A’s hidden assets, which has 2 benefits: 4.a. Creates a cash windfall. 4.b. MOST IMPORTANTLY gives investors a glimpse into the true value of Company A. 5. Number 4 above causes the share price to rise dramatically as Company A is re-priced by the market; 2.b. adds fuel to the fire via a significant short squeeze. 6. Use the shares of Company A to acquire Company B, use your clout as a significant shareholder of Company B to make sure the merger is approved. So if you're thinking about how Sears could go about acquiring GAP it looks like Eddie has completed steps 1-3. Now I'll be the first to admit that on the surface this 6-step process sounds a little bit far fetched and I have absolutely no idea what Eddie's up to. HOWEVER, with the exception of the buybacks this is exactly how Eddie used Kmart to acquire Sears...

Interesting idea... and I suppose when it would be similar to how he used Kmart to acquire Sears.

Just curious but why do you think he'd try to merge them as opposed to just holding positions in 2 separate companies?

I'm not looking in Atlanta specifically, but rather the surrounding suburbs (Gwinnett, Dekalb, Cobb, etc. counties)... think blue-collar, working class suburbs.

I think that's just semantics, I shouldn't have used the term "cash profit." I did mention at the end of my post that paying down principal was not included in the "cash profit" calculation. Anyway, in my detailed model all these things are laid out much more precisely.

Ha! Found money! I appreciate the input.

That's true, assumed operating expenses are probably high, but it's always better to be conservative in your assumptions... Anyway, I assumed about 3K for taxes and insurance. Ongoing mgmt fees are 10% of rent. Placement costs are 1 months rent (I assume this is incurred every other year). And I assume normal wear and tear ends up costing one month's rent per year. Keep in mind I'm modeling this in such a way that it's a totally passive investment - I never want to meet or talk to the tennants, no late night phone calls, etc.

Forgot to mention this, both Ian and Joseph have signed on till 2015, so nothing is going to happen with LUK short term...

It's just a guess as Ian and Joseph don't take my phone calls ;) Anyway, I only purchased LUK in the late 2008's / early 2009's so I'm only somewhat familiar with the company's history (disclosure: LUK is by far my largest holding, click on the screenshot here http://mevsemt.blogspot.com/2011/04/q1-2011-returns.html). HOWEVER, my understanding is they talked about winding down the company in the late 90's when they couldn't find any bargains. In fact, they even paid out a special $4 dividend (vs. a stock price of $20) in May of 1999. Also, I think HomeFed Corp was originally spun off from LUK (although not sure of the timing).