As I slowly gain some confidence in this difficult stock market, I wanted to take another look at one of my past favorites, Meridian Bioscience (VIVO). I do not currently own any shares, but have owned shares on an off since first writing about this stock on this blog on April 22, 2004.

Meridian is in the medical diagnostic test kit business. As the Yahoo "Profile" on VIVO reports, Meridian Bioscience is

Earlier this week (10/20/09) I sold my 50 shares of Coca-Cola (KO) at a price of $53.38 and purchased 48 shares of Church & Dwight (CHD) at a price of $55.61. As part of my own "trading transparency", I wanted to share with you my own thoughts behind this decision and update you regarding my current strategy.

There is no doubt in my mind that Coca-Cola remains one of the top international brands of 2009 and of all time. Like my own admiration for Colgate Palmolive (CL) that I have written about previously, I would like to add Coke to my portfolio again some time in the future. However, this week the company announced 3rd quarter results that were a little 'flat' and the market responded with a pull-back in the stock price.

As one of my basic strategies for dealing with my investments and managing my cash and equity balances, I utilize predetermined sale points for all of my holdings both on the upside and downside after an initial purchase. Sales on appreciation are considered "good news" and generally result in a purchase of a new holding. This is contrasted with sales on the downside, which I refer to as "bad news" signals that result in a shift from equity into cash.

Earlier Wednesday my holding in Walgreen (WAG) reached a first appreciation target--a gain of 30% in stock price after an initial purchase and I sold 1/7th of my holding. I purchased 77 shares of Walgreen in my Trading Account on March 27, 2009, at a cost basis of $26.73/share. I sold 11 shares of Walgreen Wednesday at $34.75 for a gain of $8.02 or 30% since purchase. Since I currently only hold 6 positions, well under my maximum of 20 holdings, this sale on "good news" generated a purchase signal for me, and I added a new position into my trading account.

One of my favorite stocks (that I do not currently own) is ResMed (RMD) a company that manufactures equipment that treats Obstructive Sleep Apnea. A very common disease that affects millions of people worldwide and that untreated can increase your risk of dying early by as much as 46%.

As this same report relates, sleep apnea

I apologize to my readers for my relative paucity of posts to my blog. I am committed to continuing to share my ideas with all of you and certainly to continue to offer you my actual experience in my own trading account.

The economic deterioration appears to have slowed in intensity yet it has not yet reversed direction. As reported the other day, the national unemployment rate as of August, 2009, has reached 9.7%, the highest level since June, 1983. The economy shed 216,000 jobs in August, an awful figure yet a continuation of the gradual improvement from June, 2009 when the number was 463,000 jobs lost and July, 2009 when 276,000 jobs disappeared. Suddenly less bad news is becoming good news.

I really felt like an "amateur investor" Thursday when I needed to sell my shares of Oshkosh (OSK) after they hit and passed my 8% loss tolerance. Like the rocket on the way up, the stock turned around and plunged with the market. I am still very impressed by the company, the $2 billion in new contracts for MRAPs and would consider this a very worthwhile stock to be acquiring shares in--as soon as the technicals show a little bit of support.

Like a car, I have my driving rules (and I was 'speeding' with my Oshkosh purchase), my seat belts and my airbags---in order that I can survive in the chaos of the investment world. Like airbags in vehicles designed to limit injury to inhabitants of colliding motor vehicles, my trading rules to limit losses are designed to get me out of a bad situation intact--or at least only slightly injured.

As is part of my blogging, I wanted to share with you a 'swap' I made out of my position in Haemonetics (HAE) and into Oshkosh (OSK). Both of these are mid cap stocks but that is where the similarity ends.

On Monday, August 3, 2009, I sold my 50 shares of Haemonetics at $55.08 after what I viewed as both technical weakness on somewhat less than stellar earnings, and purchased 80 shares of Oshkosh Corp at $30.73 on what I viewed as compelling news on this 'old favorite' of mine and a nearby Wisconsin-based firm. Oshkosh closed at $32.22 Tuesday, up $1.28 or 4.14% on the day...so I am already a few percentage points ahead on this purchase.

Before I write about the 'swap' I made with PetSmart (PETM) and TJX (TJX), I want to talk to you a little about "chasing performance". There is a good article on attempting to improve results by chasing after the best and latest hot stock or fund that you might want to read. In general, it is counterproductive to be switching investments or funds in pursuit of investments that have performed well in the past. Simply doesn't work.

Perhaps as an amateur investor, I am guilty of the same amateur mistakes that others make. So with that in mind, after my latest review of TJX, I have been growing impatient with my PetSmart stock which appeared to be underperforming my other holdings.

Late on Thursday, I was having a bit of seller's remorse. Earlier Thursday I parted company with my shares of Colgate (CL) because of a slight miss on revenue while earnings exceeded expectations in the latest report.

I think I got a bit 'self conscious' of the public nature of my blogging and trading and probably rushed that trade. Over and over we have seen stocks pummeled on announcements that really aren't bad. The market wants to sell on good news and sell more on bad. It is probably best not to respond to these actions after earnings announcements and instead concentrate on breathing slowly, relaxing, and letting the chaos pass as it always do.

Colgate-Palmolive (CL) is definitely one of my favorite 'comfort stocks'. However, I wasn't very comfortable when they reported their 2nd quarter results that beat expectations on earnings but missed on revenue. As reported Thursday before the open, profit came in at $1.07/share exceeding expectations of $.98/share, but revenue came in a little light at $3.75 billion, under the expected $3.83 billion. Not really a big deal in my humble opinion, but enough to spook skittish investors (like myself) who really don't enjoy hanging on to a stock when the market roars ahead and the stock price drops on a small disappointment. Earlier Thursday I sold my 43 shares of CL at $71.92/share. These shares had been purchased 4/24/09, just 3 months ago at a cost basis of $59.55/share. Thus, I had a gain of $12.37/share or 20.8% since purchase.

Preserving gains is about as important as avoiding losses in my strategy and I chose to swap out of Colgate and purchased some shares of Coca-Cola (KO) hoping that my portfolio would 'go better with Coke'.

This past month I presented TJX Companies (TJX) to my Stock Club and they went ahead and bought a few shares for our portfolio. I do not personally own any shares of TJX Cos. but do think it deserves a spot in my blog. TJX closed Tuesday (7/28/09) at $36.25, up $.35 or .97% on the day.

Most of us know TJX through the 'flagship' store of the chain TJ Maxx, however, TJX is more than just the Maxx chain. As noted on this Yahoo "Profile" for TJX:

I recently posted a PODCAST ON SYSCO (SYY). Usually I write up an entry first and then follow with a podcast. Last night I did it the other way around.

PetSmart (PETM) is currently one of my six holdings in my 'trading portfolio'. Up until Thursday I owned 90 shares of PetSmart that I purchased back on November 20, 2008, at a cost basis of $15.50. PETM closed at $20.35 Thursday, down $1.95 or 8.74% so I still have a significant gain on this particular purchase.

Wednesday, after the close of trading, PetSmart announced 1st quarter 2009 results. For the quarter ended May 3, 2009, the company earned $46.3 million or $.37/share on revenue of $1.33 billion, up from $41.2 million or $.32/share last year. According to this report, Thomson Reuters analysts had been expecting a profit of $.30/share on revenue of $1.35 billion.

Much has been written about McDonald's (MCD) being a recession-resistant stock. You can read about it here, here, here, here, and here for example.

There is some truth to the thesis. After all, people still need to eat, so doesn't it make sense to be eating at an affordable place like McDonald's when times are tough. In the same manner, Wal-Mart (WMT) has proven to be recession-resistant. People still need to 'buy things' but instead of shopping at the more expensive retail firms, or eating out at more expensive restaurants, the McDonalds and the Wal-Marts are likely increasing their market share in these recession-ridden times.

On Monday, Haemonetics (HAE), one of the six holdings in my trading account, announced 4th quarter results. Revenue for the quarter rose 10% to $152.4 million. Excluding items the company earned $.65/share. Analysts had been expecting $.63/share so the company beat expectations on earnings. Analysts had been expecting $151.1 million according to Reuters estimates; thus the company beat on revenue as well. The company went ahead and guided pretty much to expectations.

In spite of this the stock plummeted. Looking at the chart for the action Monday, we can see how the stock price hit its low around 12:25 pm when the price high was $47/share. After that point, the price gradually closed into the close of the day.

Sunday afternoon I received a twitter from my son Ben, who asked me about what I thought about the recent article by Jeffrey Goldberg in the Atlantic, "Why I Fired My Broker". Goldberg laments the failure of his Merrill Lynch broker who seemingly was unable to anticipate the market implosion and he cynically visits with investment gurus from George Soros to a survivalist who tells him to buy 'things' and not have any debt.

Mr. Goldberg suffered along with most Americans who had believed that investing for the long-term was the only way to go. One simply had to have the appropriate balance of funds in one's 401k or IRA and then dollar-average over time. It didn't work out well for Goldberg and in my own retirement accounts where I have been doing more or less the same thing it hasn't been working out well. It turns out this time there has been 'no place to hide' and diversification and dollar-cost-averaging hasn't protected anyone very well.

It has been awhile since I have been able to report to you about a sale on 'good news' which for me means one of my holdings hit an appreciation target. If you are new to my blog and my investing technique, let me briefly point out that after an initial purchase I try to sell my holding quickly and completely should it decline 8% (or 12% if I am at my minimum of 5 holdings) and call this a sale on 'bad news'. In these cases, I generally 'sit on my hands with the proceeds (or replace that position with a smaller position if I am at my minimum of 5 holdings). In this fashion, my portfolio 'management system' directs me to move towards cash on these sales and out of equities.

On the other hand, if one of my holdings hits an appreciation target, that is advances in price to a predetermined level, I plan on selling a small portion of that sale and using that sale as a 'signal' that I should be moving further into equities by purchasing a new position--indeed a position larger than the average size of my remaining holdings! Currently, I use 30, 60, 90, 120, 180, 240, 300, 360, 450% and so on appreciation targets to make these partial sale. These 'small portions' are currently set at approximately 1/7th of my holding--small enough to allow the remaining position to grow over time in spite of these continued sales. These sales are also useful in offsetting the many small losses that can accumulate with the quick sales on declines.

One of the things this bear market has done to me is to change my own perspective on stocks. I am less a momentum player and more a conservative stock picker. That of course could change if the market indeed makes a fundamental readjustment.

I am of course waiting for a signal from my own portfolio which would consist of one of my own stocks hitting an appreciation target and triggering a partial sale of shares. If that should happen, and if the market rally continues it is likely, then I shall be looking for a new holding to add to my small clutch of 5 stocks (I max out at 20 positions).

I was listening Friday night to Jim Cramer's "Lightning Round" and I was surprised to hear him discourage a caller who asked about Smucker (SJM).

I have to tell you that I have a 'soft spot' for Smucker ever since years ago I remember visiting the Watsonville plant with my father and being amazed at the spectacular processing plant that made so many of the jams and jellies that I and my family regularly consumed. Looking now for information on this factory, it does appear that it was closed back in 2003.

As is my policy, I try to share with you my own actions in my Trading Account as soon as possible as part of my own 'trading transparency'. On Friday I sold my 350 shares in Rollins (ROL) at $16.054. These shares had been purchased 10/16/08 at a cost basis of $14.69/share; thus, I had a gain of $1.364/share or 9.3% since purchase.

In general I have a very defined program for buying and selling shares based on the underlying performance of the stock in question. But simply put, Rollins represented an over-weighted position in my trading account and I didn't like the way it was trading. In many ways, this is exactly the type of transaction I try to avoid, this gestalt approach to investing, but I have always reserved the right to make small adjustments to my account, including replacing a position, when it simply didn't seem to be trading well. For instance, the stock has been trading down when the market has been otherwise strong, and the chart looks vulnerable to a correction from my amateur perspective.