In the current market environment, there are myriad investment opportunities that present themselves only once in a blue moon. Separating the gems from the train wrecks can be daunting for the individual investor. That's where the professional vulture investors come in. They both the experience and foresight to wait out the euphoria, allow trends to drive a market sector/market crash, and then pick up the valuable assets out of the rubble. They also have the capital to do so.
One such investment outfit is Leucadia National (LUK), which invests in distressed industries. Some recent investments it engaged in were subprime lender Americredit and financial services company Finova group. It is not solely a financial company though, as its holdings are as diverse as telecom, lumber and carpet padding companies.
The performance has been stellar, returning close to 80% during the past year compared to a loss of close to 8% fpr the S&P500. Shares are also up over 300% in the 5 year period vs. 32% for the S&P500. Given its exposure to some financials, it clearly picked the winners and steered clear of the CDO mess.
Disclosure: The author has no position in LUK.
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