The Deen's List Vol.6 #317

The Deen's List^TM

Our Goal: To outperform the S&P through up markets and down.

A service of Deen Capital Management, Inc. (www.deencapital.com)

Vol.6 #317 Saturday, October 11, 2008 2:18PM EDT

Please read carefully our disclaimers at the end of this newsletter.

Weekly Status Report: Contents

Performance
Market Commentary
Open Positions
Stocks Sold Over Past 13 Weeks
Subscription Information
Privacy Policy
Disclaimers
Contact Us

Performance

Deen Capital S&P 500

Year-to-date as of October 10, 2008 -20.4% * -37.7%

12 months (Oct 10, 2007 to Oct 10, 2008) -21.6% * -41.2%

* An average of managed accounts, net after all commissions and fees.

Click here for more performance data.

Click here for information on managed accounts.

Market Commentary

Market Stance: BEARISH (since September 24, 2008)

This past week was the worst week for the S&P since 1933 -- down 19.7%. Deen Capital accounts, on the other hand, gave back only 0.3% on average.

Since late 2005, I have made it my #1 priority to outperform the S&P 500 through up markets and down. My goal is to defy the most fundamental rule of investing -- that with greater reward comes greater risk, that if you want outsized gains during good times, then you have to expect outsized losses during bad times. In other words, my goal is to capture those outsized gains while largely avoiding those outsized losses.

I measure my success, our success, by the spread between Deen Capital performance and the S&P. So how are we doing? In 2006, the spread was +6 percentage points (+21.2% for Deen Capital vs. +15.6% for the S&P). In 2007, it was even better: +22 points (+27.6% vs. +5.4%). In 2008 to date, we have a spread of +17 points (-20.4% vs. -37.7%). And, over the last 2 years, October 10 2006 to October 10 2008, the spread is +39 points (Deen Capital +20.4%, S&P -18.7%).

While the market, and the great majority of mutual funds, have lost 5 years' worth of gains in recent weeks, Deen Capital has given back some, but not all, of last year's gain.

I am now waiting for the right time to put our cash back to work. But identifying "the right time" is key. For this crucial and notoriously difficult decision, I will again rely on my proprietary market timing model, which has served us so well in the past.

My Three Primary Technical Indicators:

                                       Prior week             Now
                                       ----------           -------
NASDAQ Timing Model (Ver.10q):           BEARISH            BEARISH (1)
Last signal:  BEARISH on Sep 4, 2008

Performance of Recent Stock Picks:  -9.0 BEARISH       -9.4 BEARISH (2)

Market Internals:                    10% BEARISH         3% BEARISH (3)

-----------------------------------------------------------------------
Market's Overall Technical Rating:       BEARISH            BEARISH

Stocks:Cash ratio (average):              6:94               6:94

(1) A proprietary computer model based on technical analysis of the NASDAQ Composite.

(2) This number (from -10 to +10) is based on the performance of ALL my recent stock picks (I actually buy only some of these). A positive number means my recent stock picks are generally rising; a negative number means they are generally falling. Even so, I consider a reading below +3.1 to be bearish. I require a reading of +5.6 or better to call this indicator bullish.

(3) This is the percentage of stocks ($8 and up) which are trading above their 50-day moving average. The rating of this percentage (bullish, bearish or neutral) is based on which way it's been moving recently -- up, down or sideways.

-KD, Saturday, October 11, 2008

Open Positions

Model Portfolio

Company Name Stock
Symbol Buy
Date NetBuy
Price* Current
Price Weeks
Held % of
Portfolio Gain
(Loss)

Royal Gold Inc. RGLD 09/18/08 $37.73 $37.32 3.3 6.2% -1.1%

Cash 93.8%

Total 100%

* Buy prices shown are net after commissions and fees.

Stocks Sold Over Past 13 Weeks

Company Name Stock
Symbol Buy
Date NetBuy
Price* Sell
Date NetSell
Price* Weeks
Held Gain
(Loss)*

S&P Depositary Receipt SPY 09/25/08 $121.56 09/29/08 $113.48 0.6 -6.6%

S&P Depositary Receipt SPY 09/19/08 $124.54 09/29/08 $113.48 1.4 -8.9%

S&P Depository Receipt SPY 09/19/08 $124.33 09/24/08 $118.73 0.7 -4.5%

S&P Depository Receipt SPY 09/18/08 $120.17 09/24/08 $118.73 0.9 -1.2%

S&P Depository Receipt SPY 09/18/08 $120.17 09/22/08 $120.50 0.6 +0.3%

Varian Medical Systems VAR 07/24/08 $59.79 09/19/08 $60.12 8.1 +0.5%

Thoratec Corp. THOR 08/05/08 $23.18 09/19/08 $27.48 6.4 +18.6%

Covidien, Ltd. COV 08/05/08 $52.60 09/19/08 $53.60 6.4 +1.9%

Estee Lauder Cos Inc. EL 08/18/08 $51.31 09/19/08 $50.51 4.6 -1.6%

Super Micro Computer, Inc. SMCI 09/03/08 $10.71 09/17/08 $9.98 2.0 -6.8%

DXP Enterprises, Inc. DXPE 09/08/08 $60.40 09/17/08 $57.66 1.3 -4.5%

Questcor Pharmaceuticals, Inc. QCOR 09/11/08 $6.19 09/17/08 $5.78 0.9 -6.7%

CSX Corp. CSX 09/12/08 $61.28 09/16/08 $56.59 0.6 -7.7%

Solera Holdings Inc. SLH 08/28/08 $30.01 09/15/08 $28.74 2.6 -4.2%

II-VI, Inc. IIVI 09/08/08 $42.30 09/15/08 $40.26 1.0 -4.8%

Bruker Corp. BRKR 09/02/08 $16.37 09/12/08 $15.30 1.4 -6.5%

Parametric Tech PMTC 09/08/08 $20.77 09/11/08 $19.76 0.4 -4.9%

Sapient Corp. SAPE 08/27/08 $9.25 09/10/08 $8.66 2.0 -6.4%

SkillSoft PLC SKIL 08/22/08 $10.67 09/09/08 $10.43 2.6 -2.3%

Ebix Inc. EBIX 08/14/08 $105.10 09/05/08 $102.11 3.1 -2.8%

VisionChina Media Inc. VISN 08/21/08 $19.22 09/05/08 $17.33 2.1 -9.8%

LDK Solar Co. Ltd. LDK 08/26/08 $48.65 09/05/08 $43.52 1.4 -10.6%

Kendle International Inc. KNDL 08/28/08 $50.63 09/05/08 $46.49 1.1 -8.2%

II-VI, Inc. IIVI 08/05/08 $39.98 09/04/08 $41.88 4.3 +4.8%

PAREXEL International Corp. PRXL 08/07/08 $32.62 09/04/08 $30.63 4.0 -6.1%

SunPower Corp. SPWR 08/18/08 $89.00 09/03/08 $85.19 2.3 -4.3%

Woodward Governor WGOV 07/22/08 $44.19 09/02/08 $45.87 6.0 +3.8%

Amphenol Corp. APH 08/22/08 $48.98 08/25/08 $47.52 0.4 -3.0%

St. Jude Medical STJ 07/16/08 $45.55 08/20/08 $46.03 5.0 +1.0%

Sapient Corp. SAPE 08/08/08 $8.16 08/19/08 $8.70 1.6 +6.7%

Badger Meter Inc. BMI 07/22/08 $55.68 08/18/08 $51.49 3.9 -7.5%

Amphenol Corp. APH 08/06/08 $48.29 08/18/08 $50.15 1.7 +3.8%

Innophos Holdings Inc. IPHS 08/06/08 $34.71 08/15/08 $33.70 1.3 -2.9%

Amedisys Inc. AMED 07/17/08 $59.44 08/12/08 $54.31 3.7 -8.6%

Altera Corp. ALTR 07/18/08 $21.45 08/12/08 $23.71 3.6 +10.5%

IBM IBM 07/21/08 $129.38 08/12/08 $124.71 3.1 -3.6%

EZCORP, Inc. EZPW 07/25/08 $17.71 08/11/08 $15.48 2.4 -12.6%

Titan International Inc. TWI 07/31/08 $46.52 08/11/08 $40.35 1.6 -13.3%

Calgon Carbon Corp. CCC 07/31/08 $19.69 08/11/08 $18.70 1.6 -5.0%

America's Car-Mart, Inc. CRMT 07/03/08 $18.95 08/04/08 $19.34 4.6 +2.0%

Robbins & Myers Inc. RBN 07/16/08 $50.30 08/04/08 $48.98 2.7 -2.6%

Amphenol Corp. APH 07/17/08 $50.73 08/04/08 $46.32 2.6 -8.7%

Northwest Pipe Co. NWPX 07/23/08 $56.53 08/04/08 $52.56 1.7 -7.0%

Tyler Technologies Inc. TYL 07/25/08 $17.15 08/04/08 $15.37 1.4 -10.4%

VisionChina Media Inc. VISN 07/30/08 $23.16 08/04/08 $19.37 0.7 -16.4%

ENGlobal Corp. ENG 07/09/08 $13.92 07/31/08 $12.38 3.1 -11.1%

CIRCOR International Inc. CIR 07/10/08 $62.06 07/31/08 $59.62 3.0 -3.9%

Plexus Corp. PLXS 07/25/08 $30.28 07/30/08 $29.33 0.7 -3.1%

Balchem Corp. BCPC 07/08/08 $25.56 07/29/08 $25.69 3.0 +0.5%

AeroVironment Inc. AVAV 06/25/08 $28.28 07/24/08 $30.19 4.1 +6.7%

Fuel Systems Solutions Inc. FSYS 07/09/08 $31.64 07/24/08 $37.36 2.1 +18.1%

Crown Holdings Inc. CCK 07/18/08 $29.16 07/24/08 $27.65 0.9 -5.2%

Lufkin Industries Inc. LUFK 07/17/08 $91.00 07/18/08 $83.84 0.1 -7.9%

SAIC, Inc. SAI 06/04/08 $20.69 07/16/08 $19.05 6.0 -7.9%

AZZ Inc. AZZ 06/27/08 $39.10 07/14/08 $44.25 2.4 +13.2%

* Buy and sell prices shown are net after commissions and fees. This means that the gains/losses shown are also net after transaction expenses.

Subscription Information

Welcome to The Deen's List^TM, an e-mail stock newsletter from Deen Capital Management, Inc.

My intention is to inform you as quickly as is practical regarding my stock market moves. When I buy or sell a stock, first I take care of client accounts, then I buy/sell for my personal account(s), and then, third, I send out this newsletter.

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Disclaimers

All stocks discussed in The Deen's List^TM involve a high degree of risk. It should not be assumed that any stock discussed in The Deen's List^TM or purchased by Deen Capital Management, Inc. will be profitable.

Past performance is not necessarily indicative of future results.

The information contained herein has been compiled from sources deemed to be reliable; however, we are not responsible for its accuracy or completeness.

The Deen's List
PO Box 30925
Santa Barbara, CA 93130
(800) 353-4990
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