Tuesday, August 29, 2006

The Early Bird Gets the Worm

Yesterday I preached being patient in replacing IVII in my portfolio. I am still going to try, but there is the title saying as well. It seems to be true for one of the stocks on my short list (VPHM). They closed Friday at $10.98. Then they went up on Monday to $11.17... finally AH they announced some positive results in a FDA phase I trial (ViroPharma Drug Promising in Early Trial). With the positive news, the stock went to $12.25 after hours. I suspect I can strike VPHM from my short list for the time being. If I owned I would certainly sell on the news, I find that the exuberence wears off quickly. (actually BDY went up about 8% yesterday and announced after hours plans to enhance shareholder value).

Pretty cool. I sent Vivian Lewis , of the MSN Strategy Lab,(I subscribe to her newletter regarding international stocks) an email last week. I basically thanked her for her newsletter. She actually found time on her vacation to send me a response. I thought that was classy. Here is a link to anyone wanting to try a trial of her newsletter:

Global Investor's web site

I did buy her shipping stock (DRYS) last week as the BDI keeps going up. I bought it a day too early at $12.60. It dropped to $12.00 the next day but now is pushing $14.00. The good thing about DRYS is they focus mostly on not tying up ships with LT charters. That can be a risky strategy, but when rates pop up they can really benefit as they have the capacity. Still "cheap" with a 5.9% dividend and expects to earn $2.46 this year.

It is the end of the day. I don't want to get giddy, but my MFI portfolio is showing some signs of life. It shot up 0.77% for a 2nd straight strong day. Just 3.7% underwater now. TGIS was the big mover, up almost 10% and accounting for about 50% of my gains. No idea why it moved.

PTSC sank in the middle of the day from 90 cents to 84 cents. No news in the headlines, but they did file to extend reporting date of the May 31st quarter end. I had a feeling that the long wait might not be good. The filing stated that they were having difficulty accounting for 2 transactions... here is the wording:

The Company requires additional time to consider new information related to (a) the accounting treatment of convertible debentures issued during recent years, which are no longer outstanding, and (b) the method of presenting the financial results of Phoenix Digital Solutions, f.k.a. P-Newco, a limited liability company which is 50% owned by the Company.

The report sounds harmless, but it was enough to get me to sell the "extra" shares I had bought at 80 cents a week or so ago. Still made a slight profit.

In my watch of potential "new" MFI stocks to replace IVII, JTX took a hickey today, dropping 6% on a downgrade. If it goes under $30 it will be a strong candidate. I added another candidate, THO. Thor manufactures RVs. I am always a bit split on that industry. Higher gas prices says that people may be less apt to buy an RV that gets 5 to 10 mpg. But OTOH, the demographics say seniors are more likely to buy RVs and we do have an aging population. THO is down about 20% from its highs and just announced that sales have remained strong through July 31st. They are at $42.40, a move under $40 might make me a buyer.

PNCL continued it's strong move, up another 33 cents. That means that since I wrote my Ridikulus piece last week PNCL has surged almost 25%. (my other two focus stocks haven't done so smartly. ISNS is up 3.4% and PONR aka Point Of No Return is down 5.5%... still you'd have done well to have bought the basket of 3 stocks).

End of the day. Part of me is a little sad to still be below water. I have skimmed a few other blogs and other people seem to be doing better. Does that mean I have just picked unwisely? I don't think so. I am actually a a little better than some of my benchmark MFI portfolios. Looking things over, it is my June/July picks that have really killed me. They're down 15%. My 50 benchmark portfolio for June is down just 2% and the July benchmark is up 2%. Darn you ORCT, PTSC & EZEN!

A continuous debate is whether one should buy stocks equally over the year (as recommended by JG) or all at once (for the impatient). The reason for the debate is (to me) the reading of the book makes it sound like 25-30 stocks were bought at a time. Over the long term, I don't think it matters. But over the short term it does matter as shown by my sample portfolios. So if you buy at one time, you need to be prepared for the chance you could have a little more volatilty in the beginning (just look at my chart!).

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