Winds of Change

Wow!

My MFI portfolio shot up over 2% today. Since September 10th, it is up 8.3%. That is a ton in a single month. I am now up 3% overall and trail the IWV by 3.2%. Watching Cramer the other day made me think (Reposition for a Soft Landing). He was commenting about "The Winds of Change" and that he said that people need to get out of defensive stocks (like Pepsi & Kellogg) and into tech, airlines etc. I suspect that is why MFI has been lagging to some extent, is that for the first 5 to 6 months... it was the defensive stocks that were outperforming of which my MFI portfolio had extremely little exposure.

DLX did a real about face. When I looked at lunch time, it was the best stock (on a very good day) on the NYSE. They increased guidance (Deluxe Soars on Higher Forecast) and went up about 17%! If you had bought DLX back when everyone was so negative on them (July), you'd be up 50%!

That illustrates a theme that in my mind there is no rush to buy MFI stocks. Many of them have warts. Watch them for a bit and be ready when a buying opportunity comes along. You'll know it when you see it.

It also illustrates the importance of not panicking and selling your MFI stock when it tanks. By forcing myself to hold for a year, I have had some losers bounce backa great deal. DLX is now down about 17% for me. PTSC is down about 14%. These were both close to 50% losers at one time.

Speaking of PTSC, tomorrow (per my calendar) is October (Friday) the 13th. We shall see what they have to say for the first time in about 6 months. Pardon me while I nervously chew on my fingernails.

Cramer today said to sell ANF.

It is time to sell Abercrombie & Fitch (ANF - news - Cramer's Take) now that it has a high valuation as the stock has hit $76 a share, Cramer said. "You are now being a hog. I think you should sell and swap into Lowe's (LOW - news - Cramer's Take) or Sears Holdings (SHLD - news - Cramer's Take)."

He has called the stock pretty well, saying to buy at $55 (now over $76). I can't say I disagree, if it was not an MFI stock for me, I'd probably happily take my profits. But I am in until March 2nd, 2007. We'll see how it works out. ANF will not crash (unless sales crater), but further upside may be limited. I am not sure that I agree that ANF is at a "high" valuation, as its forward P/E ratio is slightly higher than LOW and more than 10% below SHLD. That being said, Jubak just said he is buying AEOS (5 buys for a fourth-quarter rally)... not that different from ANF.

I am reading an interesting book right now called "Bull". It analyzes the bull market from 1982 - 1999. While the book twists numbers to make its point, basically that there are extended stretches that you are better off to be out of the market; it makes for fascinating reading as the book interviews people like Blodget, Grubman and Ancampora. Important to learn from history.


Finally, here is an update of my holdings and their performance.

Current Portfolio
Stock	Cost	Current	Gain
MTEX	$13.11	$19.21	47.8%
UST	$39.36	$55.85	46.2%
PCU	$39.06	$49.02	31.6%
TRLG	$17.02	$21.76	27.8%
ANF	$61.13	$76.70	26.0%
BBSI	$19.18	$23.93	24.8%
PNCL	$6.68	$8.03	20.2%
PGI	$7.71	$8.92	15.7%
MSTR	$94.36	$109.11	15.6%
TGIS	$10.34	$11.74	15.4%
MGLN	$38.34	$42.73	11.5%
ELX	$17.85	$19.19	7.5%
VPHM	$11.80	$12.14	2.9%
BLDR	$16.10	$16.50	2.5%
CHKE	$37.55	$36.90	1.5%
ASEI	$45.85	$46.30	1.0%
KG	$17.31	$17.25	-0.3%
ISNS	$13.17	$13.10	-0.5%
FTO	$28.76	$27.80	-3.1%
PACR	$32.53	$29.78	-7.5%
RAIL	$58.18	$52.86	-9.1%
TBL	$34.50	$29.76	-13.7%
PTSCE	$1.31	$1.13	-14.1%
PTEN	$26.72	$22.30	-16.1%
PONR	$30.98	$25.99	-16.1%
DLX	$26.36	$21.29	-16.8%
FDG	$34.03	$24.92	-22.1%
HW	$33.04	$24.98	-24.4%
ORCT	$11.83	$8.00	-32.4%
EZEN	$2.84	$1.85	-34.7%
OVTI	$27.79	$14.80	-46.7%
Current Gain/Loss ($)			$48
Current Gain/Loss (%)			0.0%
Sold Gain/Loss ($)			$9,495
Sold Gain/Loss (%)			31.5%
Total Gain/Loss ($)			$9,543
Benchmark Gain/Loss ($)			$17,339
Annual IRR			7.2%
Total Gain/Loss (%)			3.0%