Taking Off

PNCL has "gained altitude" and become my 2nd best performing MFI stock (UST is my best). I mentioned that it finished strong yesterday... funny but it did the same thing today. Flat most the day, then up 5% at the end of the day on 4x the normal volme. It is doubly odd as oil prices have been ticking up and airlines often move opposite oil. I remember people on the MFI board bashing PNCL saying they would never buy an airline stock. I think that is foolish. All stocks and sectors have good times to buy them. If MFI sends a signal that it is a good time to buy, it should be considered.

MTEX announced their earnings midday (Mannatech, Inc. Reports Third Quarter Earnings). Unimpressive is the word that comes to mind. The stock dropped about 5% on the news. I expect further drop as people read a little more. To be honest, I'd have been a seller today if MTEX wasn't in my MFI portfolio.

KG also announced earnings (King Pharmaceuticals Reports Third-Quarter 2006 Financial Results). I guess they were pretty good, though I wasn't blown away. KG has pretty much been dead money since I bought them in May. The stock did jump 3% on the news.

Lot of news today. PTEN settled litigation and also went up (Patterson-UTI Settlement ).

At the end of the day, I was down slightly, which was pretty good on a pretty bad day. Later!

Current Portfolio
Stock	Cost	Current	Gain
UST	$39.36	$54.60	43.0%
PNCL	$6.68	$9.50	42.2%
TGIS	$10.34	$13.83	35.6%
ASEI	$45.85	$60.88	32.8%
MSTR	$94.36	$118.70	25.8%
ANF	$61.13	$72.48	19.1%
CHKE	$37.55	$41.23	13.0%
BBSI	$19.56	$22.03	12.6%
MTEX	$13.11	$14.39	11.0%
ELX	$17.85	$19.76	10.7%
MGLN	$38.34	$42.29	10.3%
PGI	$7.71	$8.20	6.3%
VPHM	$11.80	$12.46	5.6%
FTO	$28.76	$30.07	4.8%
BLDR	$15.91	$16.19	1.8%
ISNS	$13.17	$13.01	-1.2%
PTEN	$26.72	$25.69	-3.4%
RAIL	$58.18	$54.84	-5.7%
KG	$17.31	$16.20	-6.4%
DLX	$26.36	$23.44	-8.6%
TRLG	$17.02	$15.48	-9.0%
PACR	$32.53	$28.85	-10.4%
TBL	$34.50	$29.91	-13.3%
PONR	$30.98	$26.32	-15.0%
ORCT	$11.83	$8.84	-25.3%
HW	$33.04	$21.98	-33.5%
FDG	$34.03	$20.31	-35.6%
OVTI	$27.79	$16.34	-41.2%
EZEN	$2.84	$1.65	-41.8%
Current Gain/Loss ($)			$425
Current Gain/Loss (%)			0.1%
Sold Gain/Loss ($)			$10,050
Sold Gain/Loss (%)			25.0%
Total Gain/Loss ($)			$10,475
Benchmark Gain/Loss ($)			$24,039
Annual IRR			6.6%
Total Gain/Loss (%)			3.3%

3 Interesting Charts

My MFI portfolio actually went up today despite TRLG being the absolute worse stock in the Nasdaq. Down 25. That is outrageous. But I will not rant. Rather I bought some in my sidecar mfi holdings (which have made about $10k for me). Here is the 5 day TRLG chart:


ASEI was my big winner today, Cramer suggested it was because the Dems won (360 Degrees of the Elections). I suppose that is possible but I suspect it is more because people are recogonizing that the recent quarter report was pretty darned good.

Hmmm I have had technical difficulties uploading the next two graphs. I'll try again tomorrow. ne chart was PNCL which stayed flat for the entire day and then shot up about 5% on heavy volume in final 5-10 minutes.


The final chart was PONR which inexplainably released a 10Q in the absolute middle of the day. I think it was a clerical error. The stock immediately spiked about 8%. I sold my sidecar PONR at this time. The stock then dropped 20 minutes later as the press release (Pioneer Announces 2006 Third Quarter Results) came out about their earnings. It was a solid quarter, but they talked about weakening pricing... not a good sign.

Frustration & Politics

Yes, I do get frustrated from time to time. I had 4 companies announce earnings yesterday (PNCL, FTO, HW & TRLG). I felt the 1st three had decent numbers.

• PNCL squeaked out a one cent gain.
• FTO was down.
• HW got hammered 14%!
• TRLG dropped about 20% in AH.

I should not let it bother me, but it does. So I was basically flat on Tuesday with the HW drag in a positive market day. Today will likely be severe with TRLG looking bad. I would be a buyer of either stock. ASEI did shake off its initial 10% drop from Monday and is now higher... so these things can be ST.

On the political side, looks like the Dems won in a rout. The markets seem none too pleased, though I suspect nothing will change while Bush is in office. I do believe the markets have gotten ahead of themselves, we are not past the spectre of slow growth + inflation.

Play(ing) Fair?

I have owned PLAY for a month in my sidecar MFI holdings. I didn't feel it was a true MFI stock, but I did feel it had upside potential. So I was excited this morning when I read the following headline (NVIDIA to Acquire PortalPlayer).

I was substantially less excited when I saw the purchase price of $13.50 a share given that PLAY had closed Friday at $13.36. The stock had essentially moved up last week to the purchase price. Hmmmm. Doesn't take a rocket scientist to guess that it wasn't the best kept secret on the Street. Sure enough, check out this headline later in the day (). Wow, that is really weird. I would swear I saw a headline by Seeking Alpha questioning "Who Knew Last Week"? Maybe they pulled it under duress. Wait I found it (Nvidia Buying Portalplayer; Who Knew Last Week?). I can't complain as I made a 22% gain in a month. The possible leaking of the deal didn't hurt me, stock just went up a week early.

ASEI announced their earnings this morning(American Science and Engineering, Inc. Reports Second Quarter Fiscal Year 2007 Results). I always have trouble knowing what numbers to look at. EPS was 20 cents below analyst estimates, but there were 22 cents of Fas103 charges. Revenues were light, but backlog was all time high. Here is what the CEO said:

"AS&E ended the second quarter with strong bookings and the highest order backlog in the Company's history," commented Anthony Fabiano, AS&E's President and CEO. "We recorded backlog of $117 million -- up $54 million from the previous quarter and a 54% increase for the same period last year. Significant trends for the quarter included diversifying our customer base, expanding product markets, as well as closing significant service renewal contracts."

The stock dropped 10% at the start of the day. It slowly rose over the day and ended up down 3% at $54.18. I actually used my proceeds from my sale of PLAY to buy some ASEI (at $52.12) in my sidecar.

Don't Look Back! Man I am having seller's regret over selling PCU from my portfolio a few weeks ago. I had held it for a year in my portfolio so I sold it at what was a 3 month high of $49.86. It closed today at $55.78. That is about $6 per share, which would have really helped.

Wrong Pharma! I bought KG back in May stating that I wanted a pharma in my MFI portfolio. Well another alternative (alphabetically close) KOSP would have been the better choice (Abbott to buy Kos, become HDL-cholesterol leader). A mere 54% premium. That deal doesn't seem to have been linked.

The spike by KOSP (and PLAY last week) has really helped my hypothetical monthly portfolios. They are now regularly beating the benchmarks:

	MFI	Russell 3000	Russ 2000 V
February	10.38%	7.31%	8.76%
April	4.98%	5.98%	5.16%
May	5.85%	6.54%	6.07%
June	6.55%	8.15%	7.67%
July	10.51%	8.18%	6.78%
August	8.82%	8.13%	8.07%
September	6.67%	5.59%	5.01%
October	6.91%	3.04%	3.13%
Average	7.58%	6.61%	6.33%

Up Day Down Market

Another week in the bank... well, not really "in the bank" as I lost money, but you know what I mean. It was a good last day though as my portfolio was up 0.5% despite the DJ down 30+ (and EZEN dropping 10%).

ASEI was up 5% and is now up a snappy 22%.
FDG was up 6% as it made a mini comeback from the Canadian bloodbath.
PTEN and FTO reflected the bullish Energy mood going up 4% each.

I think I finally understand why UST dropped $3 on the 26th after very good earnings. Read this report:

"While cigarettes have long been this blue chip's cash crop, the company announced during the third quarter that it's test-marketing a smoke-free and spit-free tobacco product called Taboka. Taboka, which Altria developed on its own,is being test-marketed in the Indianapolis area. While cigarette sales have been declining nationally at a rate of 2% to 3% annually, the sales of smokeless tobacco products have been growing 4% to 5% per year.

I think the foray into the smokeless tobacco market indicates that Altria is in touch with national trends and hasn't grown complacent. The move should also bring added heat to competitors Reynolds American and UST (NYSE: UST - News), which control the lion's share of the market."

Here are my most recent charts and stats. I did finally figure out why my graph and table were out of sync. I was double counting dividends in the table for IWV.

Current Portfolio
Stock	Cost	Current	Gain
UST	$39.36	$53.12	39.3%
TGIS	$10.34	$12.90	26.6%
MSTR	$94.36	$118.91	26.0%
PNCL	$6.68	$8.29	24.1%
ASEI	$45.85	$56.01	22.2%
TRLG	$17.02	$20.69	21.6%
ANF	$61.13	$72.57	19.3%
MGLN	$38.34	$43.24	12.8%
MTEX	$13.11	$14.61	12.7%
VPHM	$11.80	$12.94	9.7%
BBSI	$19.56	$21.30	8.9%
CHKE	$37.55	$39.64	8.8%
FTO	$28.76	$31.11	8.4%
ELX	$17.85	$19.26	7.9%
PGI	$7.71	$8.24	6.9%
ISNS	$13.17	$12.98	-1.4%
BLDR	$15.91	$15.47	-2.7%
KG	$17.31	$16.20	-6.4%
RAIL	$58.18	$53.34	-8.3%
PACR	$32.53	$28.95	-10.1%
PTEN	$26.72	$23.83	-10.4%
DLX	$26.36	$22.44	-12.4%
PONR	$30.98	$26.46	-14.6%
TBL	$34.50	$28.43	-17.6%
HW	$33.04	$24.54	-25.7%
ORCT	$11.83	$8.57	-27.6%
FDG	$34.03	$22.42	-29.4%
EZEN	$2.84	$1.70	-40.0%
OVTI	$27.79	$15.98	-42.5%
Current Gain/Loss ($)			-$2,369
Current Gain/Loss (%)			-0.7%
Sold Gain/Loss ($)			$10,050
Sold Gain/Loss (%)			25.0%
Total Gain/Loss ($)			$7,681
Benchmark Gain/Loss ($)			$19,729
Annual IRR			4.8%
Total Gain/Loss (%)			2.4%

Earnings, Earnings, Earnings

No shortage of headlines for my stocks of late. All-in-all though another flat day.

MSTR was my first headline of the morning. I didn't like the headline (MicroStrategy Announces Updated Third Quarter 2006 Financial Results). "Updated"... hmmm. I read the article and they made a small clerical error on number of diluted shares. Then they also had a $1m event that had just occurred that they decided to disclose. I wasn't sure how the market would react, but MSTR was up $1.91. This has been a gold star stock for me, up over 26%.

ANF reported cruddy SSS, down 3% for October (Abercrombie & Fitch Oct same-store sales fell 3%). Didn't sound good to me. Stock got as low as $70.82 but rebounded to $73,41. I would not be surprised to see it drop back tomorrow.

VPHM reported earnings this morning. I thought they were pretty darned good. Made 33 cents... beating by 8 cents and strong revenues (ViroPharma Incorporated Reports Third Quarter and Nine Months 2006 Financial Results). Inexplicably, the stock opened lower, but then ended higher.


EZEN tried to provide some afternoon delight, releasing their earnings at 2:13 (Ezenia! Inc. Announces 2006 Third Quarter Financial Results). I thought they were promising. They commented about a $1m contract (a lot of money for Ezenia!) at the end of the quarter. Stock went up only a penny.

Finally FDG continued to bleed Canadian Red. Down another 5.7%. That is 18 or 19% drop the past two days from this law change. I admittedly do not understand the ramifications of the law, but it smells of a panic and over-reaction for something I understand will not take place for 5 years.

Happy Investing!

O(uc)h Canada!

Apologies to the Street.Com for borrowing their headline today. Canada changed their law on how Trusts are taxed. And FDG is a trust. The change caused the stock to drop a whopping 12%! I did a little research and found this article about the change (CANADIAN MARKETS Canadian stocks tumble on tax change). The interesting thing is that the change will not be implemented (at least that is my understanding) until 2011. A lot can change in 5 years.

PTEN announced their earnings this morning. I thought they were terrific! And so did early traders, the stock was bid up about 5% when they were released, but ended up down a nickel. They made $1.12 per share! This is a $23 stock. I do feel they have kind of peaked, but They should be minting money for the next 12 months at least. The stock will move back north of $25 before year-end.

CHKE got the $34m I mentioned a month or two ago. Remember, that is a lot of cash for a company the size of CHKE. As astute readers may recall, I wondered what they'd do with the extra $ as they run pretty lean (not a capital intensive business). They answered the question this morning, they are raising their dividend to a nifty 75 cents(Cherokee Announces December Quarterly Dividend Increased to $0.75 Per Share).

All-in-all a crummy day for my portfolio, down 1.6%. Hopefully better news tomorrow.

Following the Herd

Herd Followers - don't you hate it when an analyst downgrades a stock after sub-par earnings? After that the stock has already dropped in price. Pru did that with TBL the other day. Market totally shrugged it off as meaningless. Smart Money did a study. They found that when an analyst changes earnings away from the herd that it is a strong leading indicator. Kind of makes sense as an analyst needs to be pretty darned sure when making a change away from the herd.

Deluxe Embarrassment - wow, DLX had their earnings last week and I didn't even notice. Sorry guys! Stock is pushing $23. You could've bought DLX for $13 in July. Proves that even boring old economy stocks can give good gains in MFI.

No Stock #30 - I decided against buying a 30th MFI stock. Instead I have plowed my proceeds from PTSC (sure glad I sold 'em) into more BLDR & BBSI. I am basically moving my most recent MFI purchases to my new tier of $ per stock as I try to pare down to 20-25 stocks over the next year.

ORCT - My lone Israeli stock made 6 cents today. They gave pretty lackluster guidance through April 2007. I don't know, if I have to sell a single MFI stock for tax purposes before December 31st, ORCT seems like a strong candidate. It has also entirely disappeared from any MFI lists.

IS Not Sweet - ISNS reported earnings in the middle of the day on Monday. That never works out well for me it seems. They were pretty bad. The company has now made less $ in 1st 9 months of 2006 vs 2005. Not a great sign. The problem is that these microcap companies are so lumpy in their earnings. The stock dropped about 12%. Funny though, some fool bought some shares at $14 about an hour after the news was released and the stock was trading at $13.

It has been an uneventful week so far. Made a little money Monday & Tuesday, but more or less treading water. Take care! Happy Halloween!

Welcome Back

I have returned from vacation. So much has happened that I don't think I can possibly update everything. I will briefly comment on various stocks:

BBSI - reported earnings on Wednesday (BBSI Announces Third Quarter 2006 Operating Results). They seemed good. Revenues were up 7% Y o Y. I suppose that was disappointing as 3 quarters over 3 quarters is +29%. Outlook for 4th quarter is +20% Y o Y. Stock got pounded (unfairly IMHO) dropping over $2.

BLDR - had poor earnings, with revenues down 11% Y o Y (Builders FirstSource Reports Third Quarter 2006 Results). They basically expect to struggle durning housing downturn. Dropped about 3% on the news. This stock will go up sharply next year if/when the Fed cuts rates.

ELX - reported earnings on Thursday (Emulex Reports First Quarter Fiscal 2007 Results). They got crushed, down 8%. Not sure why the big drop, perhaps people realized the cost of stock compensation, which drops eps 10 cents from 27 cents to 17 cents. Again, that is a huge hidden cost with change in GAAP.

FDG - Had earnings that didn't seem very good to me (Fording Canadian Coal Trust - 2006 third quarter earnings results). The stock didn't move much, so I guess people were expecting it.

MGLN - Had very good earnings (Magellan Health Services Reports Third Quarter 2006 Financial Results) and signed a new contract (Magellan Health Stock Climbs on Contract).

MSTR - had extremely good earnings (MicroStrategy Announces Third Quarter 2006 Financial Results). The stock was up over 10%.

MTEX - was mentioned in a Herb Greenberg article that Texas AG (Herb Greenberg: Texas Attorney General probing Mannatech) is considering a lawsuit about unfair trade practices. The stock dropped 16%.

PACR - had very good earnings (Pacer International Reports 3rd Quarter 2006 Diluted Earnings per Share Up Over 26 Percent). This is a quiet company that really gets at what MFI is all about.

RAIL - made $2.88 per share (FreightCar America, Inc. Reports Record Performance with Third Quarter Net Income Per Diluted Share of $2.88 on Sales of $395.8 Million). People sure don't believe in this stock at $54 price. The backlog of rail cars dropped from 16,846 to 12,176. But they announced a deal with TXU (that will be in 4th quarter) for a blistering 7,680 rail cars. I don't understand why this stock is below $60.

TBL - met expectations with their earnings. They commented that environment in 2007 will continue to be tough (Timberland quarterly profit falls; forecast weak).

UST - had what I felt were good earnings but dropped 5% (UST Inc.'s shares tumble despite earnings surprise). I guess they have gone up so much that earnings needed to be spectacular.

Wow, full week! More Zip, Zap Zoot next week. Overall I am up 3%, but trail benchmark by quite a bit still. I do have room for a 30th stock. Not sure what I'll do. Iam happy that I sold PTSC at 93 cents. It has since fallen to 73 cents. I didn't need that stress any longer.

Current Portfolio
Stock	Cost	Current	Gain
UST	$39.36	$53.31	39.8%
MSTR	$94.36	$120.19	27.4%
ANF	$61.13	$77.39	27.2%
PNCL	$6.68	$8.46	26.6%
TGIS	$10.34	$12.77	25.4%
TRLG	$17.02	$20.91	22.9%
MGLN	$38.34	$44.68	16.5%
ASEI	$45.85	$52.88	15.3%
MTEX	$13.11	$14.94	15.2%
BBSI	$19.18	$21.38	11.5%
VPHM	$11.80	$13.15	11.4%
ISNS	$13.17	$14.49	10.0%
PGI	$7.71	$8.31	7.8%
CHKE	$37.55	$38.60	6.0%
FTO	$28.76	$29.85	4.0%
ELX	$17.85	$18.25	2.2%
BLDR	$16.10	$15.52	-3.6%
KG	$17.31	$16.66	-3.8%
PACR	$32.53	$30.97	-3.9%
RAIL	$58.18	$54.34	-6.6%
PTEN	$26.72	$23.22	-12.7%
DLX	$26.36	$22.00	-14.1%
PONR	$30.98	$25.74	-16.9%
TBL	$34.50	$28.24	-18.1%
FDG	$34.03	$25.02	-21.8%
HW	$33.04	$24.86	-24.8%
ORCT	$11.83	$8.45	-28.6%
EZEN	$2.84	$1.81	-36.2%
OVTI	$27.79	$15.72	-43.4%
Current Gain/Loss ($)			$144
Current Gain/Loss (%)			0.0%
Sold Gain/Loss ($)			$10,050
Sold Gain/Loss (%)			25.0%
Total Gain/Loss ($)			$10,194
Benchmark Gain/Loss ($)			$21,350
Annual IRR			7.4%
Total Gain/Loss (%)			3.2%

Very Quick Update

On vacation. Earnings are pouring in. Looks like bad news tomorrow for BLDR. Portfolio is doing ok. ASEI has been on fire.

Current Portfolio
Stock	Cost	Current	Gain
UST	$39.36	$53.89	41.2%
MTEX	$13.11	$17.90	37.8%
ANF	$61.13	$78.91	29.7%
PNCL	$6.68	$8.48	26.9%
TGIS	$10.34	$12.80	25.7%
MSTR	$94.36	$115.55	22.5%
TRLG	$17.02	$20.82	22.3%
ASEI	$45.85	$55.59	21.2%
MGLN	$38.34	$44.31	15.6%
VPHM	$11.80	$13.47	14.2%
BBSI	$19.18	$21.71	13.2%
ELX	$17.85	$19.88	11.4%
PGI	$7.71	$8.44	9.5%
ISNS	$13.17	$14.30	8.6%
CHKE	$37.55	$38.34	5.3%
FTO	$28.76	$29.80	3.8%
BLDR	$16.10	$16.00	-0.6%
PACR	$32.53	$31.66	-1.7%
KG	$17.31	$16.76	-3.2%
RAIL	$58.18	$54.65	-6.0%
PTEN	$26.72	$23.99	-9.8%
PONR	$30.98	$26.80	-13.5%
DLX	$26.36	$21.78	-14.9%
TBL	$34.50	$28.93	-16.1%
FDG	$34.03	$24.93	-22.0%
HW	$33.04	$25.30	-23.4%
ORCT	$11.83	$8.68	-26.6%
EZEN	$2.84	$1.85	-34.7%
OVTI	$27.79	$16.10	-42.1%
Current Gain/Loss ($)			$6,801
Current Gain/Loss (%)			2.1%
Sold Gain/Loss ($)			$10,050
Sold Gain/Loss (%)			25.0%
Total Gain/Loss ($)			$16,851
Benchmark Gain/Loss ($)			$23,825
Annual IRR			12.1%
Total Gain/Loss (%)			5.3%

ASPV Has Been Bought

ASPV dove another 5% today to $20.80. I could not stand it any more and bought it. At this time it is not in my MFI portfolio (although I do have an opening with 29 stocks held currently).
I am having a little seller's regret in my sale of PCU. It has gone up about $3 since I said good-bye. Cramer even gave them his confidence the other day:

Peruvian Play

Southern Copper (PCU - news - Cramer's Take - Rating) is "a great way to play one of the last capitalist countries [Peru] standing in Latin America," Cramer told his viewers.
One of the best reasons to buy this stock is the yield. In fact, if market players bought Southern Copper and it did nothing for a year, they would be up 8% because of its "glorious" dividend, he said.

"Even if copper is cheaper, it's in demand," said Cramer, who added that Southern Copper has a "monster upside surprise" coming.

The company just opened a big mine and settled a major labor dispute favorable to Southern Copper's management, he said. Plus, this year the company is not hedging.

Removing the cost of hedging should cause an "earnings explosion," Cramer said. He advised people to buy Southern Copper on a pullback.

TGIS is having a monster week as the market embraced their earnings and 35% growth.They started the week at $11.82 and are now $13.52. I don't have a calculator at hand, but that has to be about 15%.

PGI announced their earnings this evening. I skimmed the release quickly and it didn't look inspiring. I expect they'll drop 3 to 5% tomorrow.

Overall my day was pretty good. I don't have my chart in front of me, but I think I am up about $11k or $12k now and trail the benchmark by about $7k.

Pretty funny. MTEX was downgraded today by some research analyst I have never heard of. What is funny though is the Yahoo list of upgrades/downgrades as they were downgraded to buy a while back and now downgraded to buy again. Didn't Matrix have to upgrade them at some point???

UPGRADES & DOWNGRADES HISTORY

Date	Research Firm	Action	From	To
19-Oct-06	Matrix Research	Downgrade	Strong Buy	Buy
7-Jul-06	Avondale Partners	Initiated		Mkt Outperform
17-Apr-06	Matrix Research	Downgrade	Strong Buy	Buy

First Company to Report

Buckle up! TGIS reported earnings last night. 1st of my MFI companies out of the box with 3rd qtr numbers. I was generally pleased.

• YoY Revenues + 35%
• 27 cents per share
• Positive outlook

The stock was up another 36 cents in AH trading, not sure if that has any meaning.

Overall is was a lousy day for my portfolio, down about 0.5%. Hard to complain as things have been going so well of late.

That's Incredible!

What’s Incredible?

I’ll tell you. My MFI portfolio actually ended up the day in the green, despite meltdowns by two stocks: MTEX (-12.8%) and PTSC (-18.2%).

The MTEX meltdown was a little bothersome. At about 2:15 it dove from $18.40 to below $17. I could find no reason for the drop. The volume was high at 1.2m shares vs normal 200k.

The PTSC drop wasn't unexpected after I read their long delayed quarterly income statement.

The fact that the portfolio increased does show the power of a thirty stock portfolio. BLDR has been going up like crazy, up 23% in the past week. Thanks Mr. Cramer for bullish posture on home-related stocks.

1st Major Deviation from Rules

I sold PTSCE today. 7 1/2 months before its time. It wasn’t really a MFI stock in my opinion. I could not stomach the volatility any longer. I am going to try not to look backwards and just consider it a lesson learned. Speaking of looking back, PCU shot up $1.42 today! Oh well, I did feel that was a legit sale as I had held for a year.

Breaking (up is hard to do) The Rules?

A recent comment was that my MFI approach was not following the rules specified in TLBTBTSM. That is correct as JG does lay out the steps to replicate his backtest study. In his steps, you are to buy 5-7 stocks at 4 points in the year and then hold for basically a year.

My buying has not been 5 to 7 stocks at a time.

Date Purchase
2/24 - 5 stocks
2/27 - 1 stock
3/2 - 1 stock
3/9 - 1 stock
3/15 and 3/17 - 1 stock
4/3 - 3 stocks
4/7, 5/1, 5/4, 5/9, 5/12, 5/15. 5/16. 5/22, 5/26 - 1 stock
5/31 - 3 stocks
6/2, 6/5, 6/13, 6/19, 7/7, 9/6, 9/11, 9/18 & 10/5 - 1 stock

And now I am trying to watch stocks and buy them on dips. Am I following the rules? While I am not following his procedure exactly, mathematically I do not see how it matters whether the portfolio is 4 equal buys, 12 equal buys or whatever. Over a 3 to 5 year period the difference should move towards 0. The equal buys and then selling around the same date do make it easier to rebalance your portfolio so you have equal $ in all stocks. But as I intend to be supplementing $ invested in MFI contnuously, I don't know that this is a big deal.

How about "timing" a purchase? Watching the stock prices and picking a stock on "sale". JG certainly doesn't infer that this approach should be used. It is something I have begun to do because the MFI stocks seem pretty volatile to me. Perhaps I am biasing my purchases by doing this. I have really only done this 3 times (ASEI, BBSI & VPHM). I will likely continue the approach as it appeals to the way I like to invest.

Benchmark Portfolios

I checked on how my monthly benchmark portfolios have been faring. The answer is "quite nicely thank you".

	MFI	Benchmark
February	9.30%	7.12%
April	0.57%	10.05%
May	5.27%	6.04%
June	5.87%	7.62%
July	9.84%	7.27%
August	9.28%	7.23%
September	6.31%	5.57%
October	6.30%	2.61%
Average	6.59%	6.69%

ASPV on Watchlist

For those of you new to reading my blog, I have begun trying to identify potential stocks to buy from the MFI lists. Then I watch them for a buying opportunity. A couple of recent good examples have been BBSI & PRLS.

I began watching BBSI at around $21. I t dropped to $19.18 for no apparant reason and I pulled the trigger. So far that has been a great move as it is up 25% since then. PRLS had a so-so quarter. Their stock was punished, knocked down from $4 to $3 (it had been as high as $6 earlier in 2006). It then proceded to fall further (about $2.70). I did not pull the trigger in real life. Since then, it has shot to $3.90 in the past 3 weeks.

I am now watching ASPV. It went down 11% on Friday (to $22.05) as they announced a 3q shortfall. But (and this is the important part to me) they re-affirmed 2006 guidance (Aspreva Announces Preliminary Revenues for Third Quarter 2006 and Reaffirms Guidance for the Year).

Aspreva believes continued strong underlying annual growth of CellCept prescriptions in the range of 20%-25% will be realized in 2006. Aspreva is therefore reaffirming its previously disclosed guidance for revenue in excess of $200 million for 2006.

The stock is now dirt cheap. They are trading at 8x ttm earnings. If they drop at all next week, I may have to jump in. Not sure if they will be an "MFI" stock for me or just part of my non MFI holdings. I do want to keep # of stocks in that portfolio to 30. Now if I sell PTSC (a real possibility) then that would open a slot for ASPV.