The Deen's List Vol.6 #342

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 #342 Saturday, November 15, 2008 4:41PM EST

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 November 14, 2008 -24.2% * -39.4%

12 months (Nov 14, 2007 to Nov 14, 2008) -23.8% * -39.3%

24 months (Nov 14, 2006 to Nov 14, 2008) +0.8% * -34.8%

* 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 November 6, 2008)

If you want increased gain, you must take on increased risk. This is a fundamental law of investing. My goal is to defy that law -- to give you increased gain with DECREASED risk. In 2006 and 2007, we saw the increased gain. In 2008, it's all about decreased risk. Last week, managed accounts gave back 3.8%. That's a lot, but it's much less than the S&P's drop of 6.1%.

Since September 30, the difference is truly dramatic: Deen Capital -5.2%, S&P -24.8%. Now THAT is decreased risk with an exclamation point!

So, which way from here? There is a technical argument to be made for the idea that a major market bottom is at hand. The market rallied on heavy volume off of a double-bottom on Thursday. Friday's slide was only a partial retracement, and on lighter volume.

However, my NASDAQ Timing Model, which is designed to distinguish true double-bottoms from false alarms, is saying watch out, this smells like a false alarm. I did bite briefly on Thursday's rally, however, which looked so much like a double bottom. I bought the S&P 500. But I quickly exited this position mid-day Friday with a 2% loss. This explains much of our 3.8% loss on the week.

I do want to be quick to get on board when the market finally is ready to turn around. There is a lot of gain to be had in the early days and weeks of a new bull market. The trick is to distinguish the start of a new bull market (or even a 6-week bear market rally) from the false alarms.

And I think this past week's "double bottom" pattern was likely a false alarm. I suspect this market has not hit bottom yet.

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:  +0.7 BEARISH       -2.9 BEARISH (2)

Market Internals:                    15% NEUTRAL        11% NEUTRAL (3)

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

Stocks:Cash ratio (average):              25:75              26:74

(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, November 15, 2008

Open Positions

Model Portfolio

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

Cubist Pharmaceuticals CBST 11/13/08 $24.95 $24.64 0.3 5.0% -1.2%

Greatbatch Inc. GB 11/11/08 $25.54 $24.40 0.6 4.9% -4.5%

Thoratec Corp. THOR 10/31/08 $24.67 $23.08 2.1 7.9% -6.4%

LHC Group Inc. LHCG 10/30/08 $30.61 $30.96 2.3 8.5% +1.1%

Cash 73.7%

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 11/03/08 $96.60 11/05/08 $98.97 0.3 +2.5%

S&P Depositary Receipt SPY 11/04/08 $100.20 11/05/08 $95.62 0.1 -4.6%

Ensign Group Inc. ENSG 11/03/08 $17.92 11/05/08 $15.93 0.3 -11.1%

S&P Depositary Receipt SPY 10/30/08 $94.91 10/31/08 $95.02 0.1 +0.1%

S&P Depositary Receipt SPY 10/17/08 $95.44 10/21/08 $95.81 0.6 +0.4%

Royal Gold Inc. RGLD 09/18/08 $37.73 10/16/08 $33.18 4.0 -12.1%

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%

* 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.

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