I have been doing a little bit of "micro-managing" of my portfolio.  I swapped out my VIVO for RMD hoping to catch a bit more momentum, and now, noting that my Lufkin (LUFK) stock, which I just recently purchased 7/16/08 at a cost basis of $91.10 has been struggling while the rest of the market has been rallying, I chose to sell my shares.

They really hadn't hit a sale point, and we shall need to see if this is a reasonable decision or whether by ignoring my own 'trading rules' I was a bit hasty, lost patience with a great company, and instead jumped on a stock that was heading towards a correction.

However, in light of my own sale of Lufkin (LUFK), I am reducing my rating.

LUFKIN (LUFK) IS RATED A HOLD

What has been driving this market higher recently has been the relative collapse in the price of oil.  However, what is good for the market, may not be good for Lufkin (LUFK), which otherwise has superb fundamentals.  The market paints stocks with a very broad stroke, so that the "baby is frequently thrown out with the bathwater".  My approach to investing is strongly related to earnings growth and fundamental performance reflected in a higher stock price.  When a stock starts trading in a fashion tied to a commodity, whether that commodity be oil, gold, or pork bellies, then all bets are off.

I decided to move on.

As reported:

"A strengthening dollar helped lower the price of a barrel of oil. Light, sweet crude fell $4.91 a barrel to $115.11 on the New York Mercantile Exchange, bringing its decline over the past four weeks to more than $30."

That's right.  $30 drop in four weeks.  Virtually a collapse.

Will oil move higher next week or next month?  Will it trade instead closer to $80/barrel than $140 or is it going to trade at the same price?  Frankly, I don't know.  And I am not sure anyone knows for sure anyhow.  But I want to be investing in some sort of rational fashion.  I am not interested in speculating on stocks based on the movement of commodities. 

I suppose it is also just sour grapes.  After all, I wouldn't be complaining if Lufkin was moving higher today instead of being slightly lower while most of the rest of the market powered ahead.

So earlier today, I sold my 70 shares of Lufkin (LUFK) at $89.76.  These shares, as I have noted, were purchased 7/16/08 at a cost basis of $91.10/share.  Thus I had a loss of $(1.34) or (1.5)% on this purchase. 

Generally I wait for a loss to build to (8)% before initiating a sale after a purchase of a new position.  However, as I have said many times, I reserve the right to sell a stock based on any 'fundamental' issues.  With the oil market correcting, I wanted to step aside.  To make sure that my own holdings would not be overly impacted by a correction in a commodity as significant as oil.

With the sale completed, I turned to the list of top % gainers on the NASDAQ where I found an 'old favorite' of mine, Quality Systems (QSII) on the list.