Over the weekend I posted about "uU" investing and mentioned I'd been watching TTT and MFCAF (see my previous post). Ironically, less than 48 hours later these companies announced they'd merge, which IMHO makes them a very compelling investment. So today I purchased 1638 shares of TTT at a price of $7.30, for a total outlay of $11,957.
TTT/MFCAF is almost a pure "jockey" bet (at a reasonable price) - if everything works out perfectly (which there's a 99.9% chance it won't) this would be akin to buying Berkshire Hathaway in the 1960's or Leucadia in 1980's. However, we don't need things to work out "perfectly" to make some real money here, we just need things to work out "OK".
Both these companies are run by Michael Smith, who for the last 2+ decades has put together a case study on how to generate wealth - here's a fantastic article from SumZero on how he's done it: http://www.sumzero.com/postings/2985/guest_view. Also, one of the Seeking Alpha contributors has put together a number of very good articles on the evolution of TTT/MFCAF, here's a link to his page: http://seekingalpha.com/author/george-fisher/articles. Lastly, this guy has also done some excellent write-ups and owns the stock himself: http://longtermvalue.wordpress.com/.
In my previous "uU" post I said the following:
I love it when I hear value folks talk about whipping out Excel, plugging in financial statements, explicitly projecting bull/bear cases for 7 years, trying to figure out the right cost of equity (BTW it's 12%, it's always 12%), and then passing b/c there's too much uncertainty. Rather I'd argue, for some portion of their portfolio, investors should seek out uncertainty, try to quantify the downside (or like B. Berkowitz says, "Kill the company"), make sure you're not overpaying, and let the upside take care of itself.
In this case I'm doing just that (hopefully I won't end up with egg on my face...).
