I'd make a fine housewife.

Wait...what?

I decided that next time I bought a stock, I'd go into more detail here so you can understand some of my thought processes. Also, so you can follow the stock price (if you're so inclined) and mock me if it's down 75% from today in three months.

So what stock did I buy today. And why do I have such an unusual title for this entry? Well my newest position is Lenox Group (LNX). My male readers might not know what that company does (or perhaps that I'm a terrible speller of Linux). But I'm willing to bet that the female readers know them. Lenox is a specialty retailer that sells items such as fine china and collectible items. The company used to be known as Department 56 which made items that you could put in a Christmas village for decorations. They then bought Lenox and changed the name to Lenox Group. They now operate under four different brands; Department 56, Lenox, Dansk, and Gorham.

So why have I went all motherly and put my money in this company. Mainly, because the stock has collapsed since Friday. On Thursday, it was trading for 6.63 (it had been as high as 15 in mid-2005 not long after the merger was announced). Since then, the proverbial poop has hit the fan. The CEO unexpectedly left (probably not a bad thing of what I understand). Even worse though is that the company had a miserable holiday season. Apparently there were some SNAFUs with the shipping and they had many orders cancelled and their inventory got higher than usual. And now they're forecasting a very bad loss for the quarter and year. On Friday it fell to $4.19 a loss of nearly 37%. I made a mental note to watch it because when there is awful news, it's sometimes nice to play the part of the vulture. I decided to watch and see what it did today and make a move accordingly. I figured it would rebound some and wouldn't be as attractive a purchase. However, I was mistaken. It fell again today. It got down below $4 and I decided I would probably buy some tomorrow. However, by the end of the day LNX was beginning to crash. It went through $3.50 and then got to around $3.20 so I decided to pull the trigger because I thought that was a steal. Probably should have been a little more patient though as it actually got all the way down to $2.97 before rebounding to finish at $3.17. So it was down another 24% today.

Obviously, this is going to be an extremely risky stock so why did I buy?

1. There are some worrisome loan payments. But to my knowledge they haven't missed any yet. That's a good sign.
2. Strong brand. It's going to have to get real bad for a company with such a strong name to go down the tubes. Look at Krispy Kreme. Somehow they're still alive.
3. It's really trading cheaply. I think it's Price/Sales is less than 0.1 That's ridiculous. And it's trading for less than half book value.
4. I think bringing a turnaround specialist as CEO is a good sign. They always seem to do well in dire straits.

So there's my reasoning. Hopefully the bleeding will stop and I'll be part of a big rebound tomorrow. We can only wait and see.