Saxon Capital

Placed a limit order this morning for $12.75 for some Saxon Capital, the Glen Allen, VA REIT. The quarterly dividend is $0.50, and there is also a special dividend of fourteen cents. I had pre-market limit orders for Saxon (SAX), ECR, NEW, TMA, EENC, HMB, and FICC, none of which were filled. Enterra almost got filled before I took my limit orders off. Going to put the dividend into re-investment plan. At today's prices and dividend, about twenty shares of SAX will get a new one. The price and dividend will come down, but we'll see how much.

Valero is killing me today, and I'm giving back some gains from WPCS. Red across the board except for StereoTaxis. The two-year treasury note went for 4.373 percent, slightly more than the ten-year note, 4.372. Supposedly this cross signals a recession. So, I'm putting the screen away until after the market close. Leave it to the market pros.

MSNBC replaced it's post-Christmas infomercials with a 'Mad Money' marathon. Cramer loves sick old people. If their dis-ease involves hypertension, osteoperosis or erectile dysfunction, big pharma has a patent-protected drug for them. I traded DNA this spring and made a little money, and didn't feel bad holding them. When I had Armor Holdings, I felt like a war profiteer, even though that stuff is protecting our guys. I don't look at tobacco companies, which I should, but I did look at the maker of Jack Daniel's.

Finally finished the game, "Brothers in Arms, Road to Hill 30." It's difficult to really call BIA a game, it is tactical simulation where you have to kill other human beings. After learning the controls and completing a few missions, you are issuing commands to put suppressing fire, flank, etc. It is a brilliant technical achievement. Ubisoft's Gearbox Software made that and 'Far Cry,' which I am savoring a second time, again on easy setting ("a peaceful island stroll").

Value Christmas

I haven't decided which REIT to buy; I don't want to have to sell the stock on Wednesday if it starts slipping. I'm more interested in a stock that doesn't move but yields income.

Going to finish looking deeper at the stocks that came up in my latest screen. I asked Yahoo to tell me which stocks have a combination of yearly 30% earnings growth over the last five years, and a low p/s and low PEG.

This screen yielded Jo-Ann Stores (JAS), which can be looked at as a value play, a looming bankruptcy, or a turnaround story in the making.

Hub Group Inc. (NasdaqNM: HUBG). Downer's Grove based freight logistics company. Stock had risen in the face of rising energy prices, then corrected in late November. Friday's close of $35.71 is well below 52 week high resistance at $41.11.

Alliance Data Systems Corp. (NYSE: ADS). Dallas -based transaction processing company has some risk of testing thirty dollars when earnings come out next month. Stock is meeting resistance from declining 50-day simple moving average. Friday's close, $36.08.

Cimarex Energy Co. (NYSE: XEC). Denver oil and gas company has broken out over 50-day moving average, and that sma is crossing upward into the 200-day. 52-week high is $46.31. Might go for a limit order at $40.99, based on Friday's $41.41 close.

Laserscope (NasdaqNM:LSCP). San Jose medical device maker stock meeting resistance from declining 50-day moving average. Based on Friday's close of $22.84, not far from testing the teens, which seems a fair price for a company earning a dollar per share.

Parlux Fragrances Inc. (NasdaqNM: PARL). Ft. Lauderdale company fragrance and beauty company is almost a Paris Hilton pure play. Also licensed to manufacture for Perry Ellis, Jockey, and others. Friday's close was $29.64, comfortably above the 50 -day sma.

Ventiv Health Inc. (NasdaqNM: VTIV). Somerset, NJ -based company closed Friday at $24.77 on volume of about a hundred thousand shares, somewhat above the 50 day sma. That's the problem with this screen, takes into account Ventiv's negative 2001 earnings per share.

Alliance Resource Partners LP (NasdaqNM: ARLP). Tulsa company markets steam coal to utilities and industrial users. Stock is trading below 50-day sma, roughly moving in line with energy prices. That's another problem with this screen. The PEG is only an estimate. I have to look at the income statement and somehow divine whether the smoking hot growth will continue?

USA Truck Inc. (NasdaqNM: USAK) . Van Buren, AK, dry truck carrier traded only 74 thousand shares on Friday. Seems pretty fairly priced at Friday's close of $30.94. This is getting a little overbought, but I might set an alert if it dips and tests twenty five.

Rocky Shoes & Boots Inc. (NasdaqNM: RCKY). This Nelsonville, Ohio boot maker may have found a bottom around Friday's close of $22.41.

Trust Dividends

Looked at Rackable Systems on Thursday, and Cramer mentioned them on his show Friday! I don't know why he is so excited, they compete with Dell. I didn't bite because of a look at the income statement. Still, I would love to one day have my stock outed on 'Mad Money.'

Set up a new screen, which REIT or oil trust to buy on Tuesday for the dividend. Some are offering quarterly dividends. Some have a monthly one percent distribution.

ECC Capital (NYSE: ECR) . The Irvine REIT goes ex div on the 28th, for $0.18 per share (Friday close, $2.45); yield is seven percent.

New Century Finance (NYSE: NEW). This Irvine REIT goes ex-div on the 28th, for $1.70 per share (Friday close, 39.68); yield is 4.25 percent.

Saxon Capital Inc (NYSE: SAX). This Glen Allen, VA, REIT goes ex div on the 28th, for a quarterly cash div of $0.50, and a special dividend of 14 cents per share (Friday close, $12.63); yield is about five percent.

Fieldstone Investment Corp (NasdaqNM: FICC). Columbia, MD, REIT goes ex div on the 28th, for a quarterly dividend of $0.52, and a special divvy of three cents per share (Friday close, $12.37); quarterly yield is slightly less than 4 1/2 percent.

Novastar Financial Inc (NYSE: NFI). Missouri REIT goes ex div on the 28th, for $1.40 per share (Friday close, $31.15); quarterly yield is almost four and a half percent.

Thornburg Mortgage Inc (NYSE: TMA) Santa Fe, NM REIT goes ex-div on the 28th, for $0.68 per share (Friday close, $27.41); quarterly yield is about two and a half percent.

Enterra Energy Trust (NasdaqNM: EENC). Oil trust goes ex-div for a monthly distribution of $0.18 per share (Friday close, $17.01).

Permian Basin Royalty Trust (NYSE: PBT). Oil trust goes ex div for a monthly distribution of $.155851 per unit (Friday close, $15.66).

San Juan Basin Royalty Trust (NYSE: SJT) Oil trust goes ex div for a monthly distribution of
$0.408899 per unit (Friday close, $44.24).

Tel Offshore Trust (NasdaqSC: TELOZ) Oil trust quarterly dividend is $0.381146 per share, more than three percent based on Friday's $11.33 close.

Hugoton Royalty Trust (NYSE: HGT). Oil trust monthly distribution is $0.338107 per share, Friday close $37.86.

Ran a new screen on Yahoo for low PEG and low P/S, based on the last five years of earnings growth. The results are a mix of cheap growing companies and companies that missed earnings expectations. One stock that came up was Jo-Ann Stores Inc (NYSE: JAS). The price/sales is an unbelievable 0.14. More than eight hundred stores and a market cap of $266 million. Precious says Michael's Stores are much better these days. Someone will come in there, close underperforming stores, and get earnings back in line.

The January Effect

Waiting for Valero to pop through fifty-four before I go long on energy again. So I'm heavy in technology right now. My limit order of $28.88 for Novatel, Inc. (NasdaqNM: NGPS) got scooped up in the last hour of trading before Christmas. They have been on my watch list for months. I kept getting them confused with Novatel Wireless, the local outfit I also want.

Cramer yesterday almost popped a vein in his excitement over any company involved in GPS. This Canadian pico-cap gets my dollar vote even though Cramer didn't mention them. I know I will get smacked from time to time, since a five hundred share sale will rock this baby's world. Today is a 50,000 - share day. They make SunOpta's volume look like Cisco Systems.

If there is any January effect, some may be tax-related corrections. Companies that are overbought should sell off because investors can book profits they won't have to pay taxes on for 15 months. Companies that are becoming oversold now may lure new investors and should be rising. Like the erstwhile message board sages say, watch and learn. The market has a lesson every day. I am grateful just to be in the game, alive!

Sonic Wall

Another just went in, a moving limit order for Sonic Wall, Inc. (NasdaqNM: SNWL). The Sunnyvale internet company gapped from six to seven in October. Since then, the stock has steadily advanced to eight. Very orderly though technically overbought. I am probably overweight with flimsy internet stocks that are thinly traded. Based on past earnings per share, this stock should be trading at five dollars. We'll see....

For some reason I also like Dean Foods (NYSE: DF). I have several brands in my fridge right now. My limit order at $37.77 went in. This will be a long-term hold, even though it conflicts with my holding SunOpta. I'm betting on the yoga mamas buying Horizon Organics through thick and thin. Every time I go to my neighborhood Vons, they are sold out of Silk choco soy milk.

Every order lately has been for an odd lot of shares. No more 100-share, 50-share lots. I want my brokerage to earn its damn money!! My SNWL shares took two transactions to find all the shares at eight dollars. But at least I didn't buy at some goddam ask. Buy me one share of Google, pronto!!! Well, I probably won't be doing too many one-share trades, but I can see myself buying three shares after the earnings sell-off.

My portfolio is now half cash, and all my limit orders are canceled. Saving the cash for commodities and health. Peace and patience.

The Limit Order

Woke up after eight this morning, after the markets had been open almost two hours. One of my limit orders was placed, for WPCS International (NasdaqSC: WPCS). My limit order was for $10.62, but the order was actually filled for $10.53. Wasn't that nice of them, to pay my commission.

I took the sell order off SFBC Int'l (SFCC). That stock has so little upward resistance. Going to twenty five. Company has hired people to investigate it's 'strategic alternatives.'

I'm hoping Joy Global, Inc. (NasdaqNM: JOYG), corrects down under forty dollars. Some wonk, Matrix Research, downgraded them today, to a hold. Street talk for 'sell us your shares, cheap.' With energy prices so high, coal might be a good long-term commodity play.

Getting close to my limit orders on Comtech Telecom (NasdaqNM: CMTL), and Neoware Systems (NasdaqNM: NWRE). And Dean Foods just slipped into the red. I took my limit order off DF for the moment, maybe a market buy today also. My spirit is as calm and placid as the waters in the twenty-third Psalm. Merry Christmas, good jah, peace and patience.

Hold Fast

Break-even since November, when the trades started flying. The stocks that I held on to were all up today. Hoorah! The blind squirrel found an acorn.

The stocks that I sold Monday are all plus since. RTSX was undergoing a shakeout by the market makers or something. Like sappers testing the perimeter, the selling took out a certain number of stop-loss triggers. I would have recovered my eight percent paper loss within 24 hours, had I held fast. By today the shares would be worth more than I paid. Feh!

LCI had gone down every day, and a thirteen percent loss is all I could stomach given the Monday indicators. It went down a little further Tuesday and Wednesday, then today it gapped up past my sell point. All it took was a measly 25,000 share purchase at the open.

By today I would be at break-even had I held onto CVH. That sale was pure reactionary anxiety. I bounced out of there with a four percent loss. What a short memory.

I bought VLO in April after the Premcor deal. Then they slid about twenty percent. I never thought for a second about selling. That turned out to be a decent trade after all. I was convinced that the company was undervalued. The market is still teaching me about what true 'valuation' is.

Today I had several limit orders waiting for the market open, none of which were filled. I like the idea of setting my price, psychologically. I was counting on a two percent correction in the market today. Looks like a santa clause bounce, in a market that acts like rate hikes are over. Who knows, maybe they pause at five percent. The talking heads all flap on about the yield curve, is it inverting. Whatever that is.

I'm in again with limit orders for pre-market action: $21.62 for ISSX, $10.62 for WPCS, $31.99 for CMTL, $15.49 for ERES, $24.48 for NWRE, $23.37 for EFD, $37.62 for DF, and $7.77 for SNWL. Keeping an eye on FRO. When it tests $36 again, I want to buy and beat the dividend-runners. I've sorted the portfolio alphabetically, instead of by dollars. That screen is what I imagine smoking crack to be like: highly addictive and able to distort the truth. My short term goal is a four percent return by tax time.

Contrary Indications

Last night was the lowest point yet, after I sketched out my tax situation. It took an episode of 'Family Guy' and my beloved's flute playing to get me to sleep. I bought a stock in early 2004 in a company called Hollis-Eden Pharmecuticals (NasdaqNM: HEPH). At that time, my investment in Vical, Inc (NasdaqNM: VICL), had almost doubled. I figured my luck at picking development-stage biotech companies was excellent. Should have put it all into Genentech, Inc (NYSE: DNA).

HEPH seemed to go down every day. That's how I developed a rule about these type companies. They are starved for news, and the stock will go down every day that passes without some. Time is, in effect, their enemy. In my world of fear and paranoia, I was betting that there would be some terrorist attack. At least the government would buy stockpiles of Neumuene or whatever. Look at the drug Cipro.

I sold HEPH this spring for a huge loss. The problem is that I sold one day before it would have been classified as a long-term capital loss. If I had sold one day later, I could have wiped out all the long-term gains on Cisco and Vical. Instead, the stock went up twenty cents the next day and I chased my shares back! Now that trade is lumped in with all the other short-term gains and losses. There are NO short losses to offset my long-term gains. Son of a CPA, maybe I should just put my money into a 3 month CD so I can use it, probably all of it, to pay taxes. Jackass.

Uncle Buck and Aunt Fin

Today I went cold-turkey from pretending to be a day-trader. I pulled up the screen in the morning, then went all day without checking in again. For some reason Monday I was full of anxiety, even short of breath. I used to buy and hold when I felt that way. I used to be a contrarian. I used to be able to tell when the herd was thinking one way, and I would go the other way. Seeking the path of least resistance. Now I am my own Cramer, my own contrary indicator. A day after calling STEM a bag of pus, it goes up fifeteen percent. Whether the company will make money remains to be seen, but I would put my child's cord blood in a bank, heck yes. That's the primo stuff.

So I am officially on the sidelines unless one of my buy alerts is triggered. I have made thirty trades this quarter alone. At $9.99 a trade, that's a hundred dollars per month spent chasing the dragon. I am not a trader. I just developed an unhealthy compulsion since my brokerage gave me a fancy stock screener and streaming news. I am just an investor. That's the only time I ever made real money, with patience. The waiting is always the hardest part.

Holiday Schedule

Locked in the profit from Art Technology Group (ARTG), even though it is still going up. I could have sold half the shares, but I am just gunshy right now.

Down hard on RTSX with the only news a new debt structure. Company has one fewer shareholder today, even though I've seen it rebound during the session before. The volume is just too light for my comfort level.

In for a few pennies at Valueclick (NasdaqNM: VCLK) based on an inside buy website and a quick look at the income statement. I know, the p/s is a little high, but what the heck. http://www.secform4.com/insider/hotbuys.php

In for a half-shekel at Stereotaxis (NasdaqNM: STXS), based on inside buying website, and gapping today on an FDA approval.

Put buy alerts for EFD, NKT, and DF. Cannot believe what a pus bag STEM is. Not too proud of that trade, purchasing at over six, at least I got out quick.

10:30 am pst sold all my CVH at a small loss. The industry TA is negative, and I'm worried about it testing $52. Then I wanted to lock in what was left of my NFX gains. Since I was then so overweight VLO, sold half of that. I'm mostly cash now for some reason.

Adventures in Investing

Fiserv Inc. (NasdaqNM: FISV). The CEO stepped in for 4,000 shares at $44.08 on the 8th, after Morgan Stanley downgrades. Testing October's lows, when Cramer mentioned a 'deal' in progress. http://www.crossingwallstreet.com/archives/2005/10/fiserv_fisv_on.html

Gabelli Dividend & Income Trust (NYSE: GDV). Directors join company's re-purchase plan, announced as 367,500 shares. They have blown through about 100,000 shares in the month since the announcement. The proceeds are probably coming from the recent preferred placement. Divvy runners, Yahoo lists an ex-dividend date of March 15, 2006.

Harrah's Entertainment (NYSE: HET). Director Frank Biondi bought 3,000 shares at 67.90 on December 9th. Take your pick. Stock could go up, or it could test sixty again.

Internet Security Systems Inc. (NasdaqNM: ISSX). Senior VP Operations picked up 25,000 shares at $22.90 on the 12th. The stock is down about a dollar since, looking like it may test twenty.

Midway Games (NYSE: MWY). Ten percent owner National Amusements steadily increasing stake in spite of company operating in the red. Company announced staff cutbacks amid growing revenues. I don't play any Midway games; I like Activision and Ubisoft from the quality of the games. I haven't done any research on either.

Newkirk Realty Trust (NYSE: NKT). The CEO and the president have been making large purchases of shares in this REIT. The ex dividend date is 28 December.

SonicWALL, Inc. (NasdaqNM: SNWL). The Sunnyvale provider of integrated security, productivity and mobility solutions saw a director purchase 50,000 shares at $7.90 on December 12th. The company started an orderly rise two months ago, when shares were under six dollars.

Time to sleep. I don't like missing the market openings.

Blue Sky Mining Company

I've spent two hours researching stocks and only one hour playing Gearbox Software's "Brothers in Arms." My beloved fiance, the internationally renowned Skinnerian behaviorist, might surmise some degree of compulsion in each. Some inside buys hit the screen the last couple weeks.

Air Methods CP (NasdaqNM: AIRM). Ralph Bernstein, director and 10% owner, purchased 60,000 shares at $16.88. The Denver company provides air medical emergency transport services and systems in the United States. Other insiders are exercising and selling smaller amounts as the stock gaps up. RSI indicates overbought, but these air angels may have room to run.

Avanex CP (NasdaqNM:AVNX). One of the worst performers of the year, the photonics-based solutions provider has seen Corning, Inc. steadily decrease its stake. CEO and director Jo S. Major picked up 200,000 shares on the 8th. (http://www.secform4.com/insider/showhistory.php?cik=avnx ) . Average price, about $0.895 per share. Off Friday, but climbing in weeks since on strong volume.

American Axle & Mfg HLDG (NYSE: AXL). Director BG Mathis picked up 25,000 shares at the market, average price $18.88. The value plays (price to sales ratio is 0.28) have to pay off some day.

BE Aerospace, Inc. (NasdaqNM: BEAV). Found my screen from Cramer's take. Heavy insider selling into strength. I wouldn't mind getting into some under-nineteen BEAV.

Comtech Telecommunications Corp. (NasdaqNM: CMTL). Director Edwin Kantor signaled confidence in his company at $32.88. His thousand-share buy couldn't stop it from dropping below thirty dollars. I might look harder if they test twenty-five.

Cost Plus Inc. (NasdaqNM: CPWM). The operator of Pier 1 and Cost Plus lost their CFO to Wet Seal last month. The CEO and another director tried defending the stock about two dollars ago, before Lehman hit them with a downgrade to underweight. At least they're not using Kirsty Alley in their advertising anymore.

Dean Foods Co. (NYSE: DF). A mention on 'Mad Money,' and a thousand share inside purchase, two weeks later, haven't yet resulted in stock punching 'through to 43.' The Dallas maker of Silk, WhiteWave, Land O' Lakes and Horizon Organics, among others, is starting to look tasty at about thirty-eight.

eFunds Corp. (NYSE: EFD). Ten thousand inside shares at $21.88 last week, an upgrade by Citigroup, and a new transaction processing deal with the United States Post Office. Buying this on pullbacks should enhance some portfolios, unless there really are nuts out there like in the movie, "Fight Club."

Eagle Materials Inc. (NYSE: EXP). Director Michael Nicolais found an entry point on November 30. His $109.10 shares (all 370 of them), have appreciated by more than ten dollars. Cramer had a take on them on the 17th, calling the cement and gypsum maker a 'mon back.' http://www.thestreet.com/_yahoo/funds/madmoneywrap/10253535_3.html Their 'problems,' according to Jim Cramer, are insufficient capacity and a possible repeal of the tariffs on Mexican cement. Sounds like a good name for a rock band or a salsa-riffic reminder that every investment has risk.

Two hours later, I'm done with the stocks through the letter 'e.' I'm almost twenty percent finished with the alphabet. And my inside info is older than Methuselah's crusty boxer shorts.

Sam Kinison was on a rerun of 'Married with Children,' appearing as a Dickens' style guardian angel to audit Al's life. I wait with eternal patience for a replay of 'The Ferguson.'

Quadruple Witching

That's about it for me. Options expiring today, I exited PKG, CULS, and OPSW, all in the black. Put some positive numbers into the spreadsheet and made pocket change. Don't remember if their relative strength indices were overbought, don't care. I don't want to look at level II quotes and volume all day. SFCC had a conference call yesterday morning that I didn't know about. Bloomberg came out with another article, about a test subject in Montreal that infected people with TB. Investors were unimpressed with SFCC's performance on the conference call. Strike a dirge as we commence sullenly toward end-of-year tax selling.

Like a depressed housewife splurging on shoes, I made myself feel better with a new, shinier bag. Coventry Health Care (NYSE: CVH) operates as a managed health organization. They are a component of the S&P 500 index. Picked them after seeing an article about their high operating margins, then ran a comparision vs. other HMO's. Compared them to Aetna, Aflac, Wellpoint, Cigna, Humana and many others' stock performance over periods of six months, two years and five years. They pretty much move together and CVH has out-performed. That's the way I decided it was ok to go ahead and buy Valero this spring.

So the top end of the portfolio is starting to shape up. Valero (NYSE: VLO) is a bit heavy at twenty percent of the total. About ten percent is in Radiation Therapy Services (NasdaqNM: RTSX), a fast growing provider of radiation therapy. This investment attracted me with a direct inside buy of more than $167,000 by some director named Inge. Since then, the CEO and another director have unloaded ten times that much. Still in the green.

Newfield Exploration (NYSE: NFX) has been green since the day I invested in June. Newfield explores, acquires and develops oil and natural gas properties. They hit a fifty-two week high on NG prices and an exploration deal off Hong Kong with CNOOC. I couldn't bring myself to sell though, not with winter just setting in.

A rising star is Art Technology Group (NasdaqNM: ARTG), a micro-cap e-business software provider. Since buying in November after insider buying, they are up fifty percent. Because I am not greedy, I am going to follow it with a five percent trailing stop loss sell order.

Oldest bag of the bunch is SunOpta (NasdaqSC: STKL), a Canadian company with three operations. Founded as Stake Technology, they have a patented steam explosion process for turning biomass into food, biofuel, and paper products. They also operate Opta Minerals, an industrial minerals supplier. And for all those yoga mamas cruising Trader Joe's and Whole Foods, they operate as a specialty natural and organic food supplier. I believe it was a Motley Fool article on value investing that caught my eye. Their p/s is still under 1.00, and revenues are growing with a number of acquisitions. Stephen Bronfman of the Canadian Seagram's dynasty is a director. STKL is like a garden where much of the various crop are vegetating and getting stronger, and some are blooming. Soon there will be fruit for the taking. I'd like the organic blueberry cracked wheat waffle, extra butter please.

Disgruntled Money

Another interesting day for SFBC International (NasdaqNM: SFCC). They conducted an internal review of the Bloomberg allegations and found them to be erroneous. That made the price shoot up to twenty dollars in after-hours trading. I wish I had a limit order in place, then I could have made my symbolic nickel and gotten the hell out. Because later, they revised their guidance downward for the fiscal year. The stock slid inexorably all day. For some reason, I decided to double down my shares with about fifeteen minutes left in the trading session. Price: $15.74. Closing price: $15.80.

I could have waited five minutes and got the shares even cheaper, in the $15.50 range. Over fourteen million shares traded hands. The entire float is about 18.5 million shares. That means that almost every share changed hands today. Someone on the message board figured that in the last month, the float has turned over seven times. I wish I wasn't in this stock. It's got me chasing my tail.

Night Ops

I made a few more purchases in the stock market this week. On Monday the insider buying noise around Opsware became deafening. They made the insider buying volume list alongside Overstock.com (Nasdaq: OSTK), IPass (Nasdaq: IPAS), and Restoration Hardware (Nasdaq: RSTO). This trade makes me shake my head. A three year old could look at the chart and tell that it is overbought: http://finance.yahoo.com/q/bc?s=OPSW&t=6m&l=on&z=m&q=l&c=. Technically, the stock looks like it will pull back about a dollar, which is where I should have set a buy alert.

Opsware (Nasdaq: OPSW) hasn't turned a profit in awhile, if ever. And their P/S is over twelve. I think I've let emotion make this decision, some sort of momentum play that may turn into a gap and trap. I liked the name of the company; it sounds like a CIA program. I feel like putting in a sell order for the market open. That is just not the way I normally invest.

The other stock I bought is Lannett Company (AMEX: LCI). LCI is a thinly traded maker of generic pharmecuticals that was founded in 1942. I made a little money on them this spring. They have gapped up in the last month on earnings improvements and FDA approvals. It will be two months until their next earnings report; I got back in the stock knowing I may have already missed out on the easy money.

It's getting hard to resist buying some Google shares. It's practically Jim Cramer's (http://www.thestreet.com/) favorite stock. He has no problem with a multiple of fifty. I have no problem with a company that is a cash machine. I just have a problem with my right brain making investment decisions. So far I have been right more often than wrong, but I never get out of a stock at the right time. Learning with real money is fun!

Hopware

What video game will consume me next. I won't shell out $400 plus games for an XBOX 360. I sold my original XBOX and Playstation 2 consoles this year, and assembled a game computer from Fry's shelves. The first game software I bought was was 'Half-Life 2' from a guy on Ebay. I played it on every difficulty level and still love it. I remember developing mild motion-sickness the first time I tried to pilot the swamp boat past the Overwatch.

That is the kind of game I really like: a lone wolf trying to save the world. I guess 'first person shooter' is the industry term for it. After I bought my first computer, I was still playing MS-PacMan and looking for a decent Super Mario Bros. clone Then one day I saw the shiny, trapezoidal box containing the adventures of Lara Croft in 'Tomb Raider'. The first four games in that series are the perfect blend of action and puzzle-solving, set amid fantastic archaelogical worlds. By the time 'Lost Artifact' came out, I was developing carpal-tunnel syndrome from repetitive keyboard-mashing. After that series, there was a long drought of new games for me until I entered console land.

I still have the first console I bought: A Nintendo 64 from Toys R Us for $99, plus about fifty more for the Ridge Racer and Super Mario cartridges. The best first person action was playing as superspy James Bond, faithfully reprising the protaganist of 'Goldeneye' and 'The World is Not Enough." I still have the console, because one day, I want to get the expansion module and play 'Perfect Dark.'

When Sony dropped the price on its Playstation 2, I was able to able to immerse myself as Jimmy Patterson, scourge of the Nazi's. I played every game Electronic Arts put out under the 'Medal of Honor' series. Somehow I doubt that Allied High Command would send a single army lieutenant to destroy the Nazi heavy-water facility, but what the heck. I still remember my exultation upon defeating the Wehrmacht and stealing their secret weapon.

The state of the art in the first-person World War II experience is now the 'Call of Duty' series. I played COD and COD United Offensive, in which gamers alternate Russian, British and American missions. I felt truly sickened in the role as a ball turret gunner shooting at Messerschmidts and unloading a deadly, whining payload on a ground target.

I just bought a used copy of 'Call of Duty 2' for about thirty-five dollars, on Ebay. I have discovered the adrenaline rush of playing against other people online. There is a type of multiplayer match called 'base assault,' in which players attack a fortification. Then there is the 'deathmatch,' in which anything that moves is carnage. Excellent therapy for that extra aggression. I recently started playing 'team deathmatch,' which is much more challenging. Every target has to be identified as friend or foe. I felt frustrated a few times because I can't always tell the uniforms apart. Oh well, watch out for chillblaine....

Golden Slumbers

Barron's published an article entitled, "Extreme Contrarianism," by David Ranson and Penny Russell. First they quote the 'anarcho-punk' band Chumba Wumba, saying, "everything you know is wrong." Then they present seven forecasts based on proven empirical relationships that work over business cycles.

They assert that inflation is not peaking. The dollar is still declining relative to gold and other commodities. Their research shows that the price of gold and other commodities is a reliable leading indicator of Federal Reserve policy. They forecast the Fed continuing rate hikes up to 2000 levels of six percent or higher.

Among their other forecasts is that "There is no housing bubble and it is not about to 'deflate.'" They say that when the price of housing on a nationwide basis is deflated against a benchmark of gold and other commodities, it has actually declined in real terms since 2001.

That may not be accurate for every region. Where I live, every third house is for sale. Apartment buildings have been converted to condos. One development will give you a new Volkswagen Beetle or a Nissan Xterra if you buy their condominium. Our landlord is selling to avoid capital gains. This remodeled house was built in the teens. It has about 800 square feet on a larger lot. Asking price: $550k. My fiance and I drove around looking for rentals last weekend. I estimate twenty properties for sale to each rental unit. Every speculator is trying to squeeze out the exit at the same time. Should be interesting.

David Ranson and Penny Russell are principals of H. C. Wainwright & Co. Economics, an independent investment research boutique based in Hamilton, Mass.

Nice Package

The stock that will make me wake up early to watch is Packaging Corp of America (NYSE Symbol: PKG http://finance.yahoo.com/q?s=PKG&d=b). PCA is the sixth largest containerboard manufacturer in the United States (http://www.packagingcorp.com/). By the time I checked in Friday, it was down over a dollar from pre-market action. There was news. A downgrade by Deutsche Securities to hold. And a twenty-five cent quarterly dividend. That is better than four percent, based on Friday's $22.35 close.

But the company also announced a secondary offering of 15.5 million shares of stock by PCA Holdings LLC, an entity controlled by Madison Dearborn Partners LLC, in an offering underwritten by JP Morgan and Goldman Sachs. Then PCA will repurchase up to 4.5 million shares from PCA Holdings. Who are all these people? The Yahoo message board is quiet. According to the press release posted on Yahoo (http://biz.yahoo.com/ap/051209/packaging_corp_offering.html?.v=1), PCA expects to have 103.7 million shares outstanding at the conclusion of the offering and repurchase. That specific nugget is missing from the official press release posted at PCA's IR web page. Anyway, according to their balance sheet, there were more than 108 million common shares outstanding on September 30. That means there will eventually be four million fewer shares outstanding, and the earnings per share should rise. Unless I'm missing something. I've got no problem holding this bag, as long as the price per share stays put.

Side Effects are Common and Legendary

Your hair cream may cause impotence. I bought thirty-five shares of stock of this company SFBC International (SFCC) on 10 Nov. I noticed some direct insider buying at market price by Lisa Krinsky, the Chairman and COO. I liked the business model. They perform clinical testing for companies seeking potential new drugs. For each drug approved by the FDA, there are thousands of compounds that have to go through a series of costly clinical trials. The company has taken on some debt recently, but their revenue and profits are rising. Two days after confirming my E*Trade purchase, I was on a plane to Maui with my beloved. I felt that the stock might go up, but was unlikely to go down.

A few days before I bought my shares, there was a Bloomberg article critical of the industry in general and SFBC in particular. The Bloomberg link is here: http://www.bloomberg.com/apps/news?pid=specialreport&sid=aspHJ_sFen1s&refer=news. This story knocked the share price down, which is where Krinsky stepped in to defend the stock. Enough people followed suit to boost the price a few points. My beloved and I were at finis terre, land's end, in wet Hana, Maui, camping at Waianapanapa state park. We stayed in a green cabin surrounded by lush vegetation and raw lava rock that crunched under our tires. We had no TV, just a little radio that picked up one station broadcasting from the Big Island.

Once we got settled in our Kihei B & B the next week, we were able to visit an internet cafe. I was stunned to see that SFBC had shed about twenty percent. Bloomberg came out with a follow-up article focusing on SFBC. The sources for the first article allege that upon returning to the clinic, they were threatened with deportation by company CEO Arnold Hantman. On the 18th, the company hosts a conference call to deny the allegations and announce an independent review. This is about all the company does to defend the stock for weeks. Each day the stock slides a little more. I listened to the CC the last day it was available, Nov. 30. Hantman had a canned speech denying even meeting the individuals named as sources for the Bloomberg article. SFBC maintains that the study participants were terminated for violating the company's confidentiality agreement. There was a question and answer segment in the CC, and the second analyst, an asian female, asked about the company's new bookings and its projected book/bill ratio. Their comments about that seemed lukewarm and unprepared. I decided to watch the stock and sell it if it showed any weakness.

Early that morning, SFCC rose a few tenths. I played Call of Duty for awhile. Shortly after noon eastern time it was weakening. Then I saw a large sell order on the Level II quotes which seemed to be an institution getting out. Less than a minute later I was out also, at $21.58. A thirty two percent loss in twenty days. That isn't even my worst stock trade ever. Yet I am incredibly grateful.

Because the next day, Bloomberg published yet another article about SFBC, citing safety issues regarding fire exits at the company's Miami office. Hmm, one might wonder about the agenda of those Bloomberg folks.......... I watched the stock capitulate from the sidelines. All the way to the low 15's. I wish I could say that's where I got back in. I wasn't sure the slide was over. Too bad I can't trade after-hours. No, I got back in later the next morning, at $17.90. If they just defend the company, it should go into the mid twenties again. Whatever.