My 5 Largest Positions Going Into 2011

Long time no post. I am hoping to turn a leaf in 2011 and start posting some more. With a busy day job , I have failed to allocate time to blogging. So on that note lets start 2011 with a simple post. Here are my 5 largest positions:

• 16.55%Biglari Holdings (BH) – This a combination of SNS stock I purchased in between $10-$15 per share (pre reverse split) and stock I received from the WEST transaction. The performance of BH has been great, although I really struggle with what I will call the “shenanigans” of Sardar Biglari and what appears to be his obsession with BRK fast track, except of course on the CEO compensation front. I have recently thought about exiting or at least reducing exposure here, but I have been defaulting to “Lethargy, bordering on sloth”.
• 14.11% Istar Financial Preferred Series G (SFI-G) – Istar is a distressed REIT focused on commercial real estate lending. I also own a common position (SFI) in addition to these preferred shares, but 14.11% represents just the prefs. Istar ran into trouble because of NPLs and the fact that it was lending on terms longer than it was borrowing. I bought these when the company was almost left for dead ($2-$5 per share) during the peak of the market panic. To date they have kept paying the dividend and they have been slowly but surely digging themselves out the hole they are in. I expect 2011 to be a big year for Istar but I have to monitor this position closely as things could change pretty quickly. Par on these is $25, so at 18 today the upside is getting smaller but the yield has been great. Dividends on this position have pretty much covered my cost basis.
• 11.8% Premier Exhibitions (PRXI) Like BH, I think PRXI needs no introduction in value investing blogging community. I entered PRXI around January of 2010, currently up almost 50% on this position. With PRXI, you either believe the Titanic assets are undervalued or you don’t. I fall in the former camp. If the PPS gets over $2 I will start thinking about selling.
• 11.54% Contango Oil and Gas(MCF) I once told someone that if Kenneth Peak ran a toothpick manufacturer I would buy stock in it. While thats a little bit of an exaggeration, its not far from the truth. I own MCF not because I have some thoughts about the movement of natural gas prices, but because MCF is very well run, low cost producer with a great track record for creating value.
• 9.84% Labranche & Co. (LAB) Labranche is a financial firm that has been around forever but has seen much better days. It is worth more dead than alive, I suspect in 2011 we will see something happen with LAB that will return a value to shareholders higher than today’s prices. My guess is going private or winding down the business. In the interim the discount to cash and investments, the high insider ownership, and the ability for the company to buy back shares on the cheap is what keeps me hanging out here. I consider this a heads-I-win, tails-I-don’t-loose-much scenario.

So there are the largest 5 positions out of 20 which makes up around 63% of my total holdings. I don’t follow any portfolio allocation strategies so my position sizes are a result of the either the growth of a smaller position or a result of the available dry powder when I find an investment.