Gannon On Investing

First, I can't help mentioning this odd headline, I assume it will have been changed by the time you follow this link: "Stage Stores Completes $50 Mln Sock Buy Back Program." How many pairs is that?

On to slightly more serious topics. If you haven't seen my list of the Eight Best Investing Blogs, you might want to check it out. I was glad to see a few of the bloggers that made the list clearly saw the post, linked to it, etc. as the eight blogs are very different from each other and any cross-pollination that might occur among the readers/authors as a result of their having seen the list and visiting the other blogs would be a great thing. All eight blogs are worth reading whenever you have the chance.

One of the blogs, 24/7 Wall Street (which has its own best blogs list) does a regular post called "The 52-Week Low Club". It's a list of fifty-two week lows with a short description. Lexmark (LXK), a stock I wrote about last year, made today's list.

The first time I wrote about Lexmark, I think it was trading around $45 or so – maybe slightly higher, but definitely under $50 a share. During the second half of 2006, the stock briefly tried to make me look good – but right around the new year it headed south again. The stock is now almost back to where it was when I first started writing about it in early 2006. I think it's an interesting idea at $50 a share. It's an obvious LBO candidate – in fact, that's how Lexmark began life as an independent company (it separated from IBM in the early 1990s).

Another stock I wrote about at around the same time was Energizer Holdings (ENR). It was maybe $55 a share back then. It's now bumping up around the triple digits. The company has bought back a lot of stock. Energizer has been an excellent performer over its short life as an independent company (it was spun off from Ralston Purina in 2000). The annual total return has been north of 20% since the spin-off and probably closer to 30% over the last five years.

It's a good company – however, the stock's success story is really a simple tale of smart capital allocation. The Schick acquisition, the buybacks, etc. have been crucial to the stock's success. Of course, a large part of that may be luck – it's always hard to tell – as money was cheap and the stock was cheap. That can make anyone look like a genius. Now, the stock certainly isn't cheap. I still like the company and I think there's a tendency for investors/analysts to ignore Energizer's very real completive advantages simply because the company faces a much larger, much stronger competitor.

Remember: It's better to trail in batteries and blades than lead in most anything else.

I know it's not as poetic as Milton's line; but, it's better investment advice.

Actually, there is one quote from Milton that might serve investors well:

With prosperous wing full-summ'd to tell of deeds
Above Heroic, though in secret done,
And unrecorded left through many an Age,
Worthy t'have not remain'd so long unsung.

Deeds above heroic though in secret done – that's what investing is all about. The scorecard is visible; however, the struggle itself isn't. It's a mini-epic of the mind.

Disclaimer: Reading Paradise Regained will not make you a better investor. Nothing in that poem should be considered investment advice. John Milton is not a registered investment adviser. All poetic contractions are subject to change without notice.