Positioning for a recovery---- whenever that will be

KSW Inc KSW.-- a microcap "value" engineering firm based in NYC that is highly profitable, holds 33% more cash than its market cap and pays a generous dividend (for now). Benjamin Graham would smile. I bought an original position at $2/share. A more detailed analysis will come out in our newsletter-- hopefully this week.

Fortress Paper Inc. FTP.TO-- I've covered this in detail in January and this was my first newsletter stock to study. Their Q4 numbers were strong, as expected. The balance sheet and valuations are highly favourable and management is executing their promised iniatives. The security paper segment is bottlenecked and FTP has had to politely turn away business to their competitors. An accretive acquisition or even a new build is likely in the offing and I believe the management has the experience and track record of good stewardship to pull it off without getting into trouble. Like many value investors, I'm very leary of M&A's as most don't go well, are not in the best interest of the shareholder and achieve only diworseification!. I plan to add to my small position at the company's 52 week low of $4.60/share.

DOW Diamonds Trust DIA , an ETF that buys all 30 DOW Industrial companies, weighted according to their market cap-- I was able to buy in near the short term bottom at $67/share. The dividend yield of the basket is just under 5%, providing incentive to sit on it for the intermediate term rather than play trader and try to time the market (which frankly, I suck at). I realize that the components of the DOW will be changing soon as it casts off some of the uber-dogs like GM and possibly Citigroup. This is a play on historically low valuations (except for McDonalds), cheap diversification and global exposure leading the recovery. I've mentioned before that the DOW companies should not be thought of as "American". Many of the larger components (i.e. IBM) get over 50% of their revenue from overseas. I'll buy (cautiously) again if DIA drops to 6000 and again at 5000. If it drops lower than that, we will be in interesting times, indeed! It's pretty tough to pin a fair market value on DIA as it would be even more of a moving target than its components' FMVs. To simplify matters, I'll take Graham's approach of selling (part or whole of a position, depending on the fundamentals at the time) after a 50% capital appreciation and/or 2-3 years pass by, whichever comes first. I could be persuaded to wait as long as 5 years-- the 2-3 year rule seems pretty arbitrary to me.

Belzberg Technologies BLZ.TO-- I've touched on this company in the past. In short, it provides secure, turn-key brokerage systems for trading equities and options for banks and the big brokers. It's in a hated sector, debt free and trading below its cash holdings ($1.50/share cash v.s. $1.33/share trading on Friday). Last quarter Q4 reported a small loss/share for the year due to restructuring charges. I think it represents another asymmetric intermediate term bet, with the catalyst being the eventual and inevitable return of Wall St. along with the European trading centres that represent BLZ's customer base.