Can Turtles Fly?

I haven't done any investing in the last few years. In addition to being busy with some personal life stuff, I have felt the market is overvalued. In any case, one of my last special situations, a liquidation, I invested in 2009 finally made its final liquidation distribution. Given the huge bull market over the last 6 years, this investment severely underperformed. However, I am ok with the outcome given how I was bearish and wanted something uncorrelated with the market. One lesson to be learned from this investment is that liquidations can take much longer than one expects. I anticipated further delays when I made the investment but I never imagined it would last this long. It took approximately 7.5 years from when I invested (I was expecting it to close out within 3 to 4 years). Comdisco (formerly CDCO -- security cancelled) Purchase price (approx): US$ 7.00 Final distribution: US$ 4.564 Distributions: $3.1273, $2.3455 Total return (US$, worst case estimate*): 37....

One of the risks with liquidation is that the shareholder value can erode over time. This may occur because realized value for assets may be lower than originally estimated—this doesn't apply to Comdisco but imagine the estimated liquidation value of real estate in 2007 versus now—or because of errors with accounting statements. Due to some minor errors in the accounting statement and lowered expectation of future gains from sales, Comdisco's potential payout for the Rights holders has declined slightly whereas the overall shareholder payout has increased slightly (negligible amount.) The following graphic shows the financial statements from 4Q 2008 versus 1Q 2009: Note that the numbers in the financial statements—unaudited by the way—may not be the final outcome. Nevertheless, it gives an estimate and I rely on it. In this case, the amount Comdisco has set aside for the Contingent Distribution Right liability has declined from $22,079,000 to $20,758,000. This is...

I have been trying to acquire this for a while now and finally completed my transaction. As I mentioned before, I will not disclose anything I purchase/sell until it is complete. My portfolio is small so this doesn't really impact many cases except for a few penny stocks. As readers may be aware, I purchased the liquidation play Comdisco (PK: CDCO) a few months ago . Anyone intersted should read that post and read the filings at the SEC . I decided to add to my position through the Comdisco Contingent Distribution Rights (PK: CDCOR). The Rights pay out a percentage of the liquidation value (I detail my calculation below--point out any mistakes please :) ). As usual, if anyone is interested in these illiquid securities, make sure to place a limit order specifying the price. Purchase price: $0.094 Investment time horizon: less than 2 years Let me go over my situation since it will help other newbies who may face the same situation. Do note that I'm in Canada where brokerage cost...

Market sell-off, like today, seems to be a good time to buy illiquid stocks. My order for Comdisco Holdings (OTC: CDCO) went through. This is my first special situation investment involving a liquidation. Thanks to gurufocus.com message board poster itznuthin1 for bringing this to my attention. Purchase price: roughly $6.9 Investment time horizon: less than 2 years More details follow... Comdisco, once one of the largest computer equipment sellers/leasors, filed for bankruptcy many years ago and has been undergoing liquidation for several years. You can get more information from their website and from their SEC filings ( here is the latest 10Q--up to Dec 31 2008 .) It is one of Warren Buffett's rare workout investments in the last decade (Buffett used to do these a lot more in his younger days, before he was heavily influenced by Munger.) Buffett has held this for a while and supposedly even added to it back in November of 2008. This is a tiny position for Buffett and you should...