Pettit Funds

Time for spring cleaning.

I’m finally going to dump some of my big losers of this last year: CRDN and CPSS, specifically. I lost half of my money on each of them. Normally, I wouldn’t have held them as long as I did with those kinds of losses, but I cut them some slack since the market as a whole was doing so poorly.

Too many people sell their good stocks too soon (”Ooh! I think I’ll just take my 20% profit and run!”) and hang on to the dogs, hoping they’ll bounce back.

I’m not waiting for a bounce. I was wrong. Time to move on.

Frankly, I’m not terribly thrilled with my screener’s results this time around, so I’m going to take half-positions in two different stocks and spread my nervousness that way. I mentioned that Transcend Services (TRCR) had caught my eye with my last selection and it is one I’m going with this time around. They are in the medical transcription business. My other “semi-pick” is Comtech Telecommunications Corp (CMTL), a telecom company.

Again, I’m not particulary enthused about either one–feel free to skip them. But I am enthused about replacing my old losers…

I’m getting a kick out of the cover of the current FORTUNE Magazine (April 28, 2008), with a picture of Warren Buffett.

Mr. Buffett, you’ll recall, is my major competition here in Omaha with respect to stock picking. (And, I have to admit, he did better this last year than I did).

You can’t tell from the picture at the left, but his expression is unusually “shrewd” as he imbibes a beverage at what I first suspected was a Dairy Queen (which Berkshire owns), but upon closer examination appears to be the local Gorat’s Restaurant where he frequently dines (or, possibly, Piccolo Pete’s).

Anyway, this “look” of his puts me in mind of the increasingly-popular veiled threat from THERE WILL BE BLOOD: “I drink your milkshake”.

Am I reading too much into this? He sure does seem to be looking at me…

So, yeah–okay, one year you do better than me, Warren. The gauntlet is thrown. Next year, it will be I who is drinking your milkshake!!

I had several stocks to choose from this week, after running my screen. Most of them were in the financial sector, however, and I already have more than enough exposure there for a while.

Nevertheless, I’m going with American Physicians Service Group, Inc. (AMPH). They provide brokerage and investment advisories to various institutions and individuals. They had a huge revenue and profit increase the last quarter of 2007, yet still have a startlingly low price/earnings ratio. I took a hard look at Transcend Services, Inc. (TRCR), which provides medical transcription services to the health care industry. It came in a close second.

Good luck!