AOL Time Warner

"Our favorite name is actually AOL Time Warner, and I know that is a bit of a controversial company at this point. But our view is that the problems at AOL, specifically that division, are fixable. The Time Warner businesses are trading, are worth a little bit more than the current stock price as it is without fixing AOL. And all the balance sheet and other risks are manageable in our view."

(Note: AOL Time Warner is the parent company of FORTUNE magazine)

Take-Two Interactive

"Our favorite name in the group right now is Take-Two Interactive. They'd be best known for their Grand Theft Auto franchise. Another big franchise of theirs is Max Payne. Two of the big products they've got coming out late this year, one would be Manhunt and another would be a game called The Warriors, which is actually based on the 1979 gang film. So you can see the tie-in there even 30 years later, or 23 years later we're looking to tie into popular entertainment.

"We like the company based on valuation, based on the balance sheet, and based on the product line. But investors need to be aware, number one, it's hit-driven; number two, there's very short revenue cycles in this business; and number three, there's an ongoing SEC investigation from some restatement of accounting that went on 15 months ago. They had to restate seven quarters of earnings.

"The company has hired a new CFO, a new CEO. They've done a forensic audit. There's really not a lot left to do. Today the company practices very, very conservative accounting. We don't believe that the SEC is out to punish current shareholders."