I think I am changing my investing technique. My allocation will be: ~50% high quality companies that I don't plan on selling, unless I'm offered a good price, ~30% special sits/deep value, 20% cash. And try not to own more than 20 names

So my model portfolio would be right now something like:

High Quality: BRK, MKL, MTB, NICK, MDLZ, DEO, Pernod Ricard, PG and/or UN

Special Sits: JPM, BAC, AIG, HII

Really like AIG (have a decent chunk of change in it). Been watching BAC for quite a while but the sheer number of lawsuits they're involved in keeps me at bay. Might get in at some point, haven't decided yet.

BAC - I keep hearing the same comments re: lawsuits. Once I think those are resolved however the price/IV gap will close significantly. The balance sheet is in amazing shape and management has said they are keeping a 50bps capital buffer to account for the uncertainty in the lawsuits. Also, as BAC cuts costs, integrates businesses, and reduces expensive capital it becomes a better company with stronger earnings power.

AIG - I don't know how strong the businesses in AIG are. I think that if mgmt can purchase shares at .5 BV than this is a good deal. The difference between AIG and BAC, imo, is that I think BAC can be a good business if they focus on deposits.

Thoughts on CMT? There's a good writeup on another 2+2er's blog here. It looks pretty clearly undervalued from a cash flow standpoint - the two biggest risks I see are whether their ongoing expansion project turns out profitable, and the fact that two customers make up the vast majority of their sales.

always liked that blog, mind sharing which 2+2er runs it? Quick google search didnt come up with a link to 2+2

I couldn't remember but I just dug it up - DrSues02. Hasn't posted in over a year though.

From what I read they have 0 cash. Sales were also high in 2006 162MM maybe cyclical. So it appears they are just floating out there. They are an AMEX stock which I have had bad luck with. The are using profits to slowly repay debt and some capex. Last quarter was down a little bit. I think they have really no catalyst to move over the next year. Wonder what they will do with profits once debt is gone. Just one to watch imho. If next quarter has negative earnings it might drop, if positive might rise, no way to tell and insiders will have scoop before market.

Anyone else look at AGO? It is presently my biggest position.

Over the past two years, the company set aside over 1.5 billion beyond the statutory required capital surplus for bond insurance, to get their Moodys rating up. However, Moody has told them to go pound salt today.

Now that the issue is settled, the interesting question is, what are they going to do with that extra cash? Special dividend? Massive buyback? Or do they say "screw this business" and go into a runoff, which would return roughly $47 a share to investors at present value?

i think the key for a great value investing strategy lies in studying historical data of previous mega gainers. there are correlations in chartpatterns/financials and other areas before their major runups.

1i also think fundamentalists should use technical analysis to some extent, know some efficient chart patterns and do statistical research on various indicators to know them in detail.

it is extremely difficult to analyze a company in full detail and there is lots of faulty information out there. too many people argue about trivial P-E ratios and discuss a lot of financials that do not affect the price action in a big way.

If I'm starting out in investing and analyzing companies, should I just focus on one sector so I can actually get to understand more about these businesses and their environment instead of investing here and there and just picking random companies?

Or do most of you guys just look at whatever? How do you pick the companies you decide to look into?

Wanted to update my value/long portfolio.

Present value/Long holdings: AGO, ANAT, GRVY, MRVL, REGI, AAPL, PRSC

I've held AGO and GRVY for about two and a half years now, and with the recent news, I guess I will know if I was right or not for these two by the end of this year. Not so sure about GRVY, but am extremely optimistic about AGO, which I have an average cost of $12.50.

I will eventually exit ANAT, not because it's bad, but rather because it was always a "put money here until I have a better idea" stock, and now I have better ideas.

GRVY will release ro2 in the US sometime this year, and have already released in Malaysia, Singapore, Thailand and Vietnam . Their parent company, Gung-Ho, jumped 900% in the Tokyo exchange over the past few months, mostly due to two online games that they published, though one of them was made by GRVY. I am hoping that some of that will finally trickle down, but I am not particularly optimistic. That said, this will very likely be the last year that I hold this stock, barring interest in the 2013 year end report which will come out March 2014.

CMT is definitely in a cyclical business, but it is a good one. Since it is cyclical, I'll look at the LT/normalized earnings power. Over the past ten years, it has earned an average of 16.6% ROIC (calculated using just operating assets, slightly different than my post). 16.6% x ~$64m in invested capital = earnings power of $10m. At a 10x multiple, that's $100m, subtract out $10m in net debt + $9m in pension liability, divided by 7.3m shares = $11 stock.

Multiple ways of 'normalizing' the business, but it seems clearly undervalued. On the catalyst side, I pointed them out in my post - the U.S. truck fleet is basically the oldest it has been in history, and trucks get exponentially more costly to operate as they get age. Peak of the trucking cycle is likely a few years off, which will continue to drive demand.

Major risks is whether this is peak margins (as I point out, I think the move to larger presses has shifted the margin profile), and the ongoing problems at Navistar.

-DrSues02

I saw HNZ was up 18% today thought it was some kind of typo before I saw the news:

http://finance.yahoo.com/news/berksh...125430691.html

I only have 100 shares and was expecting to hold them for years, but I guess I can't complain (bought at $51.30 in 2011, buyout offer is $72.50).

sold half my SILC position over the last week. a Nice winner.

YHOO was great -- it was wonderful to get it cheap when they announced that the new CEO would evaluate how to spend their Cash. lol . Sold 25% of that position today.

AIG going good.

Buying Apple these days, and started getting in around 450. starting to build a largish position.. maybe 3% right now -- but i'm hoping for it to get up to a 5-7% size.

TEVA has been such a dog.

mori any new thoughts on GRVY? last i looked RO2 was such a dog i assume it will be worldwide..

It was a bust in Korea, but that was rather expected as their fanbase mostly resides in the phillippines and the SE asian countries. The next earnings report on March 15th will give a much better idea of how well RO2 really is doing.

Even if it's a bust, they're still going to receive $40 million in additional licensing revenue, so I can't imagine the stock going down any further as they are presently trading below NNWC.

I still believe it's a low risk high reward proposition. Downside is they flatline, upside is potential multiples, especially given that the parent company GungHo went up 9 fold, partly because of one of the GRVY games. That being said, flatline seems to be the most likely result, and I will hold this thing no longer than March 2014.

BTW nice call on the SILC. I don't know why I passed on that.

Exited ANAT, 1 YR 14% gain, still super undervalued. What a great defensive stock.

The earnings report and ensuing conference call from AGO was incredible and I think they still has massive upside.

GRVY is as written above.

MRVL has a lot of potential, not only because of Einhorn's thesis, but because the CMT infringement suit is a joke. See: http://www.marvell.com/company/legal/

I work in the patent field, and points 6-8 are the biggest reason why the damages ruling is a complete joke. Nowhere in the history of U.S. patent law has damages ever been assessed for products made and sold outside of the U.S. for infringement on a U.S. patent, and it sets the kind of completely non-sensical precedent that will get smacked down by the appeals court. Even if CMU has them dead to rights and on willful infringement and the appeals court agrees with the 50c royalty rate (all extremely unlikely), at most that is $540 million, and this is assuming everything goes correctly for CMU otherwise (domestic sales - if they are considered to be domestic + triple damages for willful infringement). That will be the absolute worst case scenario IMO, and so unlikely that the appeals ruling will be a catalyst for them.

REGI is blowing my expectations out of the water with today's earnings. Hoping for multiples on that one.

AAPL per Naj's thesis.

PRSC per ahnuld's thesis. Going to slam a lot more into PRSC.

Also considering AXTI, which I have been shadowing for about a year. Anyone have any thoughts on them?

Has anyone looked at an update from MNKD recently? Biopharmaceutical founded by Alfred Mann. Afrezza is the inhalable insulin product soon to be at market (hopefully)

Some important dates are approaching. (rough timeline below)

Two phase 3 trials are finishing in May/June. Data released in August

NDA submission in October

FDA decision in April

http://seekingalpha.com/article/1254...-stock-of-2013

For an extremely thorough summary of the company and its situation.

Any other CTB longs here?

Is there a way to get average peg ratios for 5yrs or 10yrs to see if a stock is comparably cheap today? Or is that rediculous?

I think "peg ratios" are silly, but if it's what you want ycharts.com can plot em back 5 years.

Will follow this thread from now on. Basically investing in bluechips LT and currently in posession of NVO SBUX CSCO PEP VOW(ETR) MCD MSFT and ACCEL(AMS). Looking to expand though so gimme some tips!

I've decided to get out of this one. Their pension liabilities are too worrisome.

REGI \(^o^)/

Dunno why I didn't sink more into it.
Still fairly undervalued. This should be at least $15.

HUGE score in IFT today. It's been a long patient wait. Following Phil Goldstein -- almost always smart -- Thx Phil Goldstein for IFT as well as GYRO.

For those who don't know Phil Goldstein -- he runs Bull Dog Investors and has a sick track record.

2 relatively new positions DOLE and BCOR.

what do people think about Mastercard, Visa, and Amex?