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Strategies & Market Trends : Turnarund Investing

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Aug 1 5:00 PM EST

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To: batman10023 who wrote (364)	4/24/2012 11:51:52 PM
From: batman10023	3 Recommendations of 1876

if you are talking micro cap turnarunds i don't think they should be a big portion of the portfolio unless you know the company cold and there are catalysts. we had about 4% of the portfolio in GSIG in 2010 which was a funky bankruptcy play that we knew really well and spent 100% of my time on the name for a few weeks and then probably 10% of my time for the next few months. i thought it had perhaps 10% of downside and 100-150% of upside (turns out i was being too conservative on the upside case) and that's why i was willing to make it that size position (and i had a strong feeling a rights offering was a solution so my 4% could turn into having to put another 4-6% into the name or get diluted. that's probably as big as i would make things of that risk - maybe another percent or two max - but given the market cap probably not much more. CIT debt converting to equity went in at 10% straight away. HPQ went in at 8% (yuck). GM bonds went in at 4 or 5%.

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