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Richard Blum and Blum Capital’s Mind-Boggling Stock Picks and Returns

Richard Blum, 75, is the Chairman and President of Blum Capital, an investment management company he founded in 1975. Prior to founding Blum Capital, Mr. Blum was with Sutro & Co., an investment brokerage, for seventeen years where he held various positions including directorship and membership of the executive committee. Mr. Blum received his B.S. degree in business administration from the University of California, Berkeley in 1958 and received his MBA degree from the same school in 1959. Mr. Blum currently serves as Chairman of the board of directors of CB Richard Ellis (CBG), a multinational real estate corporation.

Below is a list of Blum Capital’s trading activities as of 1Q2011:

Tyler Technologies, Inc. (NYSE:TYL)

Blum Capital’s 13F portfolio value was $2 billion as of March 31,which represented a 16% increase since December 31 despite the trimmings undertaken by the fund. The biggest trim off was in Tyler Technologies (TYL), where Mr. Blum sold 300K shares. The stock has generated approximately 5% return since the end of March. Glenn Fuhrman’s MSD Capital seemed to think the same about TYL and trimmed its holdings by 23%. The fund also trimmed its PRGX Global Inc. (PRGX) holdings by selling 103K shares since the previous quarter. The stock generated a handsome return of approximately 2% since March 31, despite all the market turmoil. Carlo Cannell’s Cannell Capital was among the few funds that held a bullish view of PRGX as it increased its holdings by 24%.

About 80% of Blum’s portfolio was invested in four securities as of March 31: CB Richard Ellis (CBG), Career Education (CECO), ITT Educational Services (ESI), and Avid Technology (AVID). Unluckily, the fund incurred an average weighted loss of 28.5% from these four securities, vs. 10.5% loss for the SPY. The amount of loss is more than $400 million. The only securities that profited amongst the four was ESI, which brought in about $9 million. John Rogers’ Ariel Investments could not escape from the loss at CBG, despite his trimming of CBG holdings by 12% in the first quarter. Scott Scher’s Clovis Capital was also among the funds that was disappointed by CBG’s performance as it had increased its holdings by 35% in the first quarter.  CBG saw a high of $29.70 on April 21 and closed at $18.27 on August 5.

Joel Greenblat’s Gotham Asset Management sold 73% of its CECO holdings in the first quarter of 2011 and saved itself from the loss to a great extent. Bill Miller’s Legg Mason Capital Management, on the other hand, was positive for CECO and increased its holdings by 880% in the first quarter of 2011.

AVID, which lost 51% in value in about 4 months, has disappointed many funds. Ken Griffin’s Citadel Investment Group and Chuck Royce’s Royce & Associates were among those funds. While Mr. Griffin’s loss was minor, Mr. Royce’s loss could have been as high as $42 million.

In terms of percentage, the biggest loss Blum incurred was with Collective Brands Inc. (PSS). After seeing a high of $23.44 on February 18, the stock lost 55% since the end of March. Blum’s loss in PSS reached $43 million.

Blum Capital’s 13F portfolio lost 28.5% in value since the end of March, which translated into approximately $550 million.

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