Zip! Pow! Bam! Post #200

Great day for my portfolio. Up almost exactly 1% as we pull ahead of the benchmark again. It was a team effort as 25 of my 30 stocks were green.

PNCL deserves mention. Many people said to sell PNCL after it went up 50% just before Christmas. But I have held it (it comes up in May) per the MFI rules and made almost another $2k. Motley Fool had a good article today (Why You Shouldn't Sell ) that it is natural from a psychological view to sell your winners and hold your losers and you don't want to admit you made a mistake with the losers and you want to lock in gains with winners, irregardless of whether the stock still has strong prospects. The discipline of MFI forces you to treat winners and losers the same. I think that is a strong selling point for MFI. Frankly I tend to make emotional decisions regarding stocks.

I set up a stock a week ago to track the MFI Blue Light Special Stocks, those that were down 20% or more from my tracking and were still on a list somewhere. Obviously too early to draw any conclusions, but it is showing the same tendancies that I saw in my bigger study from last week. In the first week, the 18 stocks are up 4.1%. My portfolio is up 2.3% and the Russell 3000 is up 1.9%. Stay tuned.

Value Added? Motley Fool had an interesting article poking fun at Wall Street analysts (This Just In: Upgrades and Downgrades) and their multi-million $ salaries. I was looking at ANF today and the Prudential upgrades/downgrades:

I bought it March 2nd at $61.13. Pru had it as neutral.

April 17th with a price $57.10 the upgraded it to outperform. Good call.

November 30th with a price of $67.44 they downgraded it to neutral. Bad call.It had fallen from high 70s in November and that closing price was pretty much the bottom.

January 16th with a price of $78.67 they upgraded to outperform again. Hopefully a good call as it has moved to $81.51 today, but the call was clearly late as the stock had moved from $69 to $78.67 from the start of the year.

So if you bought like me you're up 34% + dividends. If you bought like the Pru analyst you're up 22% and had some ST taxes to pay.

Of course AG Edwards did even worse. I remember this because I have an account with AGE. I had checked ANF when I bought them on March 2nd and AGE had them as a buy. Then like the next day, AGE downgraded them and the stock took a sharp drop because of the downgrade. It dropped from $59.21 to $57 something. A month later, AGE reversed its decision at $55.97 and made ANF a buy again. A crameresque flip flop. Finally on July 18th, with ANF at $53.23 AGE said enough is enough and put it back on hold. So you'd be down about 8% versus my gain of 34% plus. I wonder if AG Edwards ever said "buy" again? Yahoo doesn't show anything. Hmm, I just pulled up AGE and they still have it as hold. Whoops.