Wild Roller Coaster Rides

When I was younger, I loved riding on roller coasters. Kings Island (near Cincinnati) had a great one called "The Beast". And Dallas has the Texas Giant. The old wooden ones really rattle you to your bones. As I have gotten older, I like them less. My back and neck ache when I get off.

We had a real roller coaster ride today in the stock market. In fact, if you looked at the market 30 minutes after it opened and then when it closed, you might not know what happened in between. I was down more than 1% at one point, but ended the day up 0.8% to close ever so slightly on the IWV.

With the MFI approach though, your hands are pretty much off the steering wheel after you have placed your bets. That is probably for the best because frankly I have no idea what to do right now regarding investing. All my decisions of late have been wrong (in the short term).

Lots of chatter about some of my favorite MFI stocks.

PTEN - as I mentioned, Cramer picked NBR over PTEN last night because of "superior management" though he called the entire sector cheap. Jubak today announced he is selling his drillers and replacing with Oil production companies as he thinks drilling day rates have peaked. Not what I want to hear. (Jubak on Drillers)

PONR - as much as I ignore analyst opinion, CIBC initiated coverage on PONR today, I believe there comment was that their price was below liquidation value (CIBC on PONR). Point of No Return went up 3.5% on the news.

ANF - Target gave a bleak reading on retail and AG Edwards downgraded ANF (for the 2nd time in the 5 months I have owned them). This caused a 4.8% decline.

TGIS - went up 13% on no news that I could fathom, this must be a great stock for day traders as 5-10% moves on a daily basis seem to be common.

UST - was up 2.9% and is now up 25%, my best (not saying much) MFI stock to date.

The roller coaster ride today tells me that people on both sides are nervous. There are a lot of people shorting tech stocks right now. If the CPI is low tomorrow or some tech companies give some positive guidance, things could turn on a dime... or should I say semi-chip?

A little financial news this evening. I see where Yahoo is getting slaughtered tonight. Down 13.4%! Yikes! I wonder if Cramer will mention the drop on Mad Money as he has been hyping YHOO for quite a few months. Guess he'll be in "the house of pain". I know I am already there, though I did have a little green today.

Here is a recent list of MFI stocks (best 25 at 50m or more):

Name (in alphabetical order)	Ticker	Market Cap ($ Millions)	Pre Tax Earnings Yield	Pre Tax Return on Capital	Price From	Most Recent Quarter Data
Aduddell Industries Inc	ADDL	65.92	24%	> 100%	07/17	03/31
Anika Therapeutics Inc	ANIK	100.43	14%	> 100%	07/17	03/31
CallWave Inc	CALL	68.86	35%	75 - 100%	07/17	03/31
Cellstar Corp	CLST	59.42	16%	> 100%	07/17	05/31
Deb Shops Inc	DEBS	353.76	15%	> 100%	07/17	04/30
Deluxe Corp	DLX	747.47	15%	> 100%	07/17	03/31
EarthLink Inc	ELNK	985.49	19%	> 100%	07/17	03/31
Fording Canadian Coal Trust	FDG	4,204.20	18%	> 100%	07/17	03/31
FreightCar America Inc	RAIL	569.04	21%	> 100%	07/17	03/31
Intervideo Inc	IVII	137.75	20%	> 100%	07/17	03/31
King Pharmaceuticals Inc.	KG	3,991.41	17%	> 100%	07/17	03/31
Korn/Ferry International	KFY	752.74	13%	> 100%	07/17	04/30
Mannatech Inc	MTEX	321.56	17%	> 100%	07/17	03/31
OmniVision Technologies Inc	OVTI	943.87	18%	> 100%	07/17	04/30
Orckit Communications Ltd	ORCT	135.76	15%	> 100%	07/17	03/31
Palm Inc	PALM	1,500.30	12%	> 100%	07/17	05/31
Patriot Scientific Corp	PTSC	288.20	24%	> 100%	07/17	02/28
Pinnacle Airlines Corp	PNCL	145.51	43%	> 100%	07/17	03/31
PortalPlayer Inc	PLAY	218.76	156%	> 100%	07/17	03/31
Security Capital Corp	SCC	117.03	22%	> 100%	07/17	03/31
Syneron Medical Ltd	ELOS	421.07	15%	> 100%	07/17	03/31
United Online Inc	UNTD	693.82	14%	> 100%	07/17	03/31
Vaalco Energy Inc	EGY	481.58	15%	> 100%	07/17	03/31
ViroPharma Inc	VPHM	535.67	22%	> 100%	07/17	03/31
World Air Holdings Inc	WLDA	193.53	35%	> 100%	07/17	12/31

********************* N E W S F L A S H ! ! ! ************************************

FDG reported earnings this evening. (FDG 2006 second quarter earnings results) I don't know, maybe I am getting "coal" feet but I am having trouble getting "fired up" about the numbers. Here are some highlights:

1. They earned $1.03 per unit vs $1.10 a year ago and $1.37 last quarter.
2. The price of coal is up ($119 vs $94 Y o Y). (but they are producing less).
3. Demand for their high quality metallurgical coal for steel mills has been down.
4. They expect the price of coal to drop further.
5. They expect demand for the high-quality coal to ramp back up as the steel mills have used their reserves.
6. They will be paying a $1.00 dividend.
7. Transportation costs up 10%.

Still, if they earn $4 a year and they trade at $29 that is not bad. But without any accelerating growth, I look for FDG to be stuck around $30 a share, possibly dropping lower if coal prices deflate (a strong possibility as Coal's big competitor, NG is so cheap).
Now to call it a "blog" with a closing thought from Mr Greenblatt:

"So why do share prices move around so much every year when it seems clear that the values of the underlying businesses do not? Well here's how I explain it to my students: who knows and who cares?

Maybe people go nuts a lot. "