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Sold 1/3 of my MFC Industrial (MIL) holdings

September 4, 2012

Summer’s over, the doldrums are past and September is a historically volatile month for equities.

None of that has anything to do with my sale of MFC Industrial shares, however. I’ve sold 1/3 of my position because I simply can’t value the combined company. Since the tender offer for Compton Petroleum shares was announced in July, I have been trying to put a value on MIL once it has purchased Compton. Unfortunately my knowledge of the Oil and Gas industry is rather limited and I just haven’t been able to come up with a solid valuation for MIL. So with the share price up 20% since the announcement (obviously someone else knows more about this deal than I – or at least believes they do) I’m taking the opportunity to exit the position gracefully. I just don’t feel comfortable holding an investment in a company that I can’t value. I sold my shares at $8.57 and will be taking more off the table if the shares rise close to $9 as at that point the shares will be trading above book value.

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