The Limbo

"Every limbo boy and girl

All around the limbo world
Gonna do the limbo rock
All around the limbo clock
Jack be limbo, Jack be quick
Jack go unda limbo stick
All around the limbo clock
Hey, let's do the limbo rock

Limbo lower now
Limbo lower now
How low can you go?"

The stock market has me humming the old Limbo song, "how low can you go?" It does have me reeling. I suppose there must be a good sector to be buying right now, but I can't pull the trigger on any of them. The psychology of the market is funny. When things are going good, we're all ready to shell out more dollars and when things tank, we all cling tightly to our wallets. Probably should do the exact opposite. I know I am still scarred by the crash in 2000.

That is the advantage of MFI. I know I will hold the stocks for at least a year and therefore I am not selling on emotion. I probably need to work more on the buying part, JG recommends 5 to 7 stocks a quarter to get started, but I have been a little quicker (ok a lot quicker) than that, probably to my detriment. I rationalize that it doesn't matter as the funds were invested in other stocks/mutual funds, so it is not like I assumed additional market risk.

Here is a useful quote from TLB: "Although in the short term, Mr. Market may set prices based on emotion, over the long term it is the value of the company that becomes most important to Mr. Market"

I was watching an analyst yesterday. he said that it is very bearish as the market keeps trying to go higher early in the day and then absolutely tanks in the afternoon. Wonder if we'll see that today. (It did)

Stock Headlines

NSS - up strongly this morning. A major competitor of NSS (MVK) is being bought out at a 37% premium (Tenaris says to buy Maverick Tube for $3.19 bln). So NSS is up about 8% in early trading. To me it highlights how undervalued some of these stocks are right now. In my mind, NSS was even cheaper than MVK. (note: NSS ended the day up just 2.7%, it is a steal)

PTSC.OB - Signed a licensing agreement with Nikon today (PTSC & Nikon). Y'know, I have no idea how much these high-tech firms are having to pay PTSC but it seems clear to me that they are all capitulating. This has the potential to be a real cash cow as there are a lot of firms that use this technology, which seems to be proprietary.

ELX - upgraded today to "outperform" by RBC. I have trouble getting excited by analyst calls.

PACR - announced a $60m stock buyback. Doesn't seem like a lot, but I'd rather have it than no buyback at all.

Finally, I did make several transactions today:

1. I bought TRLG. This was actually a bit by accident, I had forgotten that I had put in a buy order if it dropped to $17.02.
2. I bought 20% more of 7 stocks. This is a mini-breaking of the rules, but they were all recent purchases and still on the list. RAIL, FDG, KG, PTSC, OVTI, ORCT & TGIS.

I felt that the market has to be close to hitting bottom. I don't believe we're going to have a complete meltdown. I had sold a non-MFI stock for a tax write off and decided instead of buying a 28th stock that I was extremely comfortable with the stocks that I held. I may do the same with several others if market remains depressed (NSS is very tempting).

Hmmm, Mavericks are on in 20 minutes, I'd better go.