The Special Situations Real Money Portfolio held up pretty well in the volatile month of November. I had one minor setback this month, but was still able to end the month with an account balance of $17,914.97. That’s down only 3.2% since October. My return since the beginning of the year is still a positive 12.32% as of the market close on November 28th. Finally, going all the way back to the inception of the Special Situations Real Money Portfolio on October 19, 2004, my total return for this portfolio at the end of November is 79.15%, which comes out to a positive 22.86% internal rate of return.
As I first mentioned above, the Special Situations Port did run into a bad deal in November. Capital Properties (CPI) cancelled their going private transaction. Thankfully, I was able to react quickly to the news and sell for just a minor loss of $21.31. This minor setback was more than offset by the big win on my Anheuser Busch merger arbitrage play. That one netted the portfolio $690.05, a 10.9% total return for that position.
As the month came to a close, I started on a streak of bad luck, or maybe you could say my luck ran out. Just before Thanksgiving, new broke that the accountant’s preliminary review of BCE Inc. (BCE) has found the proposed acquisition may not meet solvency requirements. Basically the BCE takeover deal looked dead in the water and the stock dropped from just above $30 to the $18-$19 range. My plans for now are to hold onto BCE until more definitive information comes out about the fate of the deal. The company has been holding back its dividend and if the deal is called off it might likely restart its dividend and maybe even issue a special dividend.
Sadly, BCE is not the end of the Special Situations Real Money Portfolio bad news. But that will have to wait for another post, since the next piece of bad news hit on December 1st. If you would like to learn about that trade early and also review all the current “workout” opportunities that I’m tracking, please consider subscribing to Fat Pitch Financials Contributors Corner.
Disclosure: I own shares of BCE. I no longer own shares of CPI or Anheuser Busch.