Vestin Realty Mortgage II, Inc. (VRTB)

I recently purchased (3,000 shares@$6.92) a great small cap stock called Vestin Realty Mortgage II, Inc (VRTB). This stock primarily invests in short terms loans secured by real estate. The company currently trades at 75% of tangible book value. It has hardly any liabilities and the assets are the short term loans. Its loans are geographically well diversified (California is the highest at 25%) among 10 states. The loans are primarily backed by commercial properties (49%) and land (28%). Because of this, the income and 11%+ monthly dividend that it pays out seems safe. The price on this could go up 25% in my estimation. If not, sit back and collect the monthly dividend. This stock is doing a 1 for 1.3 split in the middle of this month (December). So, expect the price to fall accordingly.

In reply to Aravind's ( http://aravindsuri.blogspot.com) question about my opinion of Microsoft (MSFT) and Walmart(WMT), I think they are both fairly valued. If WMT, went below $40 (highly unlikely), I would be a writer of bull call spreads. Usually, I write bull call spreads when the stock is somewhat undervalued and I know the upside is limited. In the example of Home Depot, I felt the fair valuation of the stock is $45. This is why I bought a $35 jan 2009 call and sold a $45 jan 2009 call for a net price of $3.50. Right now, it's worth near $5 for a gain of 40%+.