For example...Just think if a large MKL shareholder got his legs pulled out on the Bear Sterns debacle. I would liquidate and if MKL was aholding that would get sold off too. So be concious that every short seller offsets a long position and you best learn to live with em.
MKL already had a huge drop in share price in January of 2008, it fell to the $400 price range. Since then, however, the stock has steadily been growing.
This is a company with an excellent business model, proven by their ability to use shareholder capital to create real economic value year after year. Merkel Corp has an excellent track record of generating returns, using its assets to earn superior returns on shareholder capital.
In the current reported year MKL earned a return on capital of 17.4%, compared to its cost of capital of 8.5%.
Consistency is also of utmost importance. Beating its peers for one or two years doesn't prove a company's business is superior to the competition; however, in MKL's case, return on capital on average is in line with the returns of its peer group for the last five years.
If you buy this stock, hold it for five years, the company has proven its ability year after year to increase shareholder value. I just bought in today and I think this stock is a winner for the next 5 to 10 years. You won't see me selling my shares for a long time, so even if the stock somehow dropped back to the lower $400-range, I won't fear the stock price one bit. It'll bounce back in no time.
Investors, we've got a winner here and I'm going to ride the train up this hill the entire way!