4-21-09

Dear Diary,

I sold my position in Waters Corp. (WAT) at $36.48 a share, a $0.78 a share gain, noting the projected Net Profit Margin is now in decline.

I also sold almost all of my Southeby's (BID) position on the same basis. The sale price was $9.60 a share, a $0.59 a share loss.

The proceeds were used to buy up the average purchase price of my H & R Block position from $15.85 to $16.16 a share, based on a widening Net Profit Margin and a P/E Ratio below 10.

I'm down 19% from 2007, while the Dow Jones Average is down about 42%. This is pretty good news, as Ben Graham, Warren Buffett's teacher, spent seven years in negative territory through the Great Depression.

It appears that the bottom has been found in this recession around 6,500 in the DOW, as I'm seeing all my stocks drift upward the past few days. I'm going to do some changes in strategy tomorrow, I think, to maximize some purchases. I'm very happy with the way my investments have gone the past 1.5 years, relative to the market.


Gene

Still Buying

Dear Diary,

I just bought shares of H&R Block (HRB) due to a Holy Grail dynamic; however, it does carry some long term debt. My buy price was $15.85 a share.

Also, I just bought shares of Iconix Brands (ICON), a brand owner of some high profile clothing lines. The buy price was $11.74.

My portfolio has been on the rise in recent weeks. Holy Grail is holding its own against Buffett-Graham Net Quick Asset Deals so far.

Gene

Buying MDT

Dear Diary,

I just bought more Medtronic, Inc. (MDT) for $30.99 a share, bringing my average purchase price down from $36.86 a share to $35.01, based on projected earning per share for 2009 of $3.20 and a widening Net Profit Margin.

Gene

More Buys

Dear Diary,

I bought some Southeby's (BID) yesterday at $10.19 a share, based on projected earnings per share of $2.82 for 2009 and a widening Net Profit Margin. Because of Long term Debt, this is not a Holy Gail but is trading just above Working Capital of $9.88 a share, according to my most recent "Value Line" presentation.

I also picked up shares of Stryker (SYK), a pure Holy Grail, but it is trading at $33.22 at purchase, just above 10 times projected earning per share for 2009 of $3.15. The widening Net Profit Margin tells us that an upward pressure is on the stock price when the price is at 10 times earnings or below.

I sold the Decker's (DECK) at $56.89 yesterday, a 19% approximate gain over the 10 day holding period.

Gene

Decker's Outdoor CFO Resigns

Dear Diary,

I just read that the Chief Financial Officer of Decker's Outdoor (DECK) "abruptly resigned" on March 23, 2009. This can't be good news, so I've put in a sell order for the entire position.

These Holy Grail situations can turn on a dime, but a competent investor can still profit, as it appears my sell price will be about $10 a share above what I paid a short time ago.

Gene

Deckers Outdoor Purchase

Dear Diary,

I bought a substantial position in Deckers Outdoor (DECK), today, for $47.92 a share, based on projected earning above $8 a share for 2009 and on the Holy Gail criteria. This is a pure Holy Grail: no debt, double digit Net Profit Margin, widening Net Profit Margin, upward trend in earnings, double digit Share Holder Equity and Return on Total Assets. Everything looks perfect, but it can change in a moment. Such is the nature of the Holy Grail approach.

General Electric (GE) is my big Buffett-Graham Net Quick Asset Deal, and it's up a couple of bucks from my original purchase price.

Gene

More GE

Dear Diary,

I bought more General Electric (GE) on 3-4-09 at $6.63 a share, bringing my average purchase price down from $18.79 a share to $7.18 a share.

The DOW is trading at around 6500.

Gene