MFI Not Working

Cyperspace (YG) - It is official. MFI is not working in 2006. A poster in Yahoo Groups has run a test where he stratified the market into deciles (Update on MFI Results for Russell 3000 in 2006) . This should come as no surprise to readers of this blog as my monthly benchmark portfolios are almost all behind the benchmark.

What to do? Nothing.

I was reading some research reports over the weekend.

Refiners Tanking

AG Edwards had some good stuff on refiners, Explains why FTO has dropped 30%. (in part at least). Here is what it says:

"US refining margins dropped sharply for the 5th consecutive week., most notably in the East and Gulf coasts. The composite margin averaged $5.10 versus $8.58 the prior week, down from its year-to-date high of $21.96 in April. For 3Q06 margins are averaging $14.67, below $18.52 in 2Q06 and $16.25 a year ago."

They go on to say that this tempers their ST outlook on refiners. Based on this, I will likely sell my double down FTO purchase today.

Five Stars (*****)

S&P publishes a regular listing of Five Star stocks. Based on value and quality. It has generally pefromed pretty well. I thought I'd see if any MFI stocks were on the list.

ANF since 9/20/05 at $45.96 based on valuation
ELX since 4/6/06 at $17.02 based on continued build out of network storage.
FTD (a stock I chose not to buy) since 4/11/06 at $9.84.

PTSC(E)

PTSC picked up the letter E over the weekend. Never a good signE. I have also noted that PTSCE is no longer ever listed on the MFI lists. Not sure why, as nothing has changed except the stock has gotten cheaper. PTSCE did have an encouraging news release over the weekend.

"We reiterate that the decision by the Company to account for its interest in
Phoenix Digital Solutions, LLC in accordance with the equity method of
accounting for investments and its decision to bifurcate the embedded
derivatives in its previously outstanding convertible debentures will not have a
material effect on the Company's financial condition."

So that is promising.

Can We Fix It? Yes We Can!

I added my 30th MFI stock today. BLDR at $16.10. Cramer has been saying the housing stocks have hit bottom (Stocks as Tea Leaves). If so, BLDR will be a smart move. I am still stinging a bit in moving a day too late to buy ASEI, which rose another 5% today. But you can go crazy playing "what if".

Wish me luck.