Thursday, July 06, 2006

ANF is Enough!

Ok, probably the biggest stretch of a pun I have tried, but ANF already! Talk about your "house of pain". ANF announced that same store sales were down 4% for the 5 weeks ending July 1st. So the stock is taking another pounding and is now down 14% from where I bought it. Oh, if only I had bought AEOS (my other consideration at the time), up about 21% in the same span... that is a $3,500 swing on a $10,000 investment.

Well, at least it isn't a sprint. ANF has plenty of time to catch up. Even with the disappointing same store sales, their overall sales were up 10% so the new stores must be smoking. I say ANF already as the stock is only selling at 10x next year's earnings, so some of this downside is really already baked in.

Wow, guess I should complain more often. ANF started the day down $2.00 and closed up $1.99. However, for the 2nd time in past week, ANF was a contrarian indicator and as it rose, the rest of my MFI portfolio sank... or should I say "stank"? (oh, just typing the word makes me think of When the Grinch Stole Christmas).

Cramer commented on ANF today, it wasn't exactly complimentary though he has been bullish on the stock. Here is what he had to say:

"Abercrombie & Fitch (ANF - news - Cramer's Take) reported an awful number, J.C. Penney is down, while Abercrombie & Fitch is up.

This is because a lot of people know J.C. Penney is a well-run place and Abercrombie & Fitch is a disappointment, Cramer said. It's all about expectations, he said. And the expectations got out of control for the upside of J.C. Penny and for the downside of Abercrombie & Fitch."

Yesterday (as you may recall) I danced a little jig as I finally passed up the IWV benchmark (an ETF of Russell 3000 for those of you joining late). I had to dance that jig in reverse today, a truly painful dance to witness. Early today I had closed within a thick eyelash of passing up cash as well, but as soon as ANF got into gear I fell back hard.

Hmmm, most days I scan the "winners and losers" in the Nasdaq and NYSE. I see DEBS is in the losers today, down about 12% as they guided lower for rest of 2006/07. That is an MFI stock and is another on the verge of crashing and burning. I must confess that this approach is not for the weak at heart.

Of course as Paul Harvey would say (do you remember him?), "the other side of the story" FORD (a 40m MFI company that has burned a bunch of people) is up 29% today. I wonder why? Not sure, but I think something must be afoot. I am going to go ahead and jump in with my 29th MFI stock. Impulsive, I know. But that is just me. (Aside, I have not decided whether this will be an MFI stock... I will decide in next 24 hours whether I want to hold for a year, I am starting to think not).

DLX was my loss leader (again), down another 3.3%. The only saving grace is that it is 3.3% of a rapidly dwindling number.

KG started the day humming and was even mentioned as a stock leading the drug stocks higher in a premature blast by MW (King leads drug stocks) as the run quickly petered out.

IVII was the big winner of the day, up 7.5% for absolutely no reason that I can fathom. It just bounces all over the place. If you could draw a bead on its bounces you could do quite well.

Perhaps in the next drop, I will do my 20% add on, it has worked so well (to be read with great sarcasm) on my other 7 stocks.

I read the Yahoo Groups board regularly. One guy went on a limb and bought 5x more PTSC than his "standard" holding of MFI stocks. His buy-in price was kind of high ($1.23). I have been tempted to really load up on some "bargains" as well, but part of the discipline is to treat this as an entire portfolio and not over-weight with stocks you think are the better deals. There is absolutely no proof thus far that I am capable of knowing which stocks are the "bargains". That being said, I am comfortable with my more modest approach of 20% add-ons of a few select stocks.

Justadrone...... Good Day!

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