Shoe Pavilion (SHOE – Nasdaq)

Position opened: First purchase on September 16 2002, total average cost of $1.21 USD

Position closed: Last sale on September 29 2005, total average proceeds of $4.59 USD

Hold period: 3.04 years

Rates of return: 280% (simple) and 55.2% (annualized)

Another exceedingly boring investment in another exceedingly boring sector – retail. At the time of this investment, the market had ignored Shoe Pavilion to such a degree that it was trading in “net-net” territory – that is, as of Q2 2002, current assets less all liabilities were worth significantly more than the share price. Additionally, the company had a manageable debt load, and was both earnings and both cash flow positive. Eventually, the market noticed, and we exited the position.