Well I bought some (FLIR)

Yep, on Friday I sold my first shares of Illumina after its big gain and used the proceeds from that NVT sale a week or so ago to start a position in FLIR -- probably no more than 25% of the ultimate position size. Why did I buy some FLIR?

1. I kept the position size small because the current price isn't the best entry point for the stock.

2. I bought the stock because:

a. its a great secular story that is only dependent on falling costs/prices. Its true that there are technology stories with much better growth rates (salesforce.com - CRM for one) but they also come with much higher valuations and often with much lower margins. FLIR is already quite profitable and is only 25X earnings -- I say only because with a history of high teens revenue growth, Flir is in a rare group indeed. Not too many businesses have that kind of organic revenue growth.

b. in the last recession (2000-2002) they grew revenues during that period despite the economic weakness because with FLIR it ALL depends on new defense contract wins as well as new commercial product cycles. Thermography started one last year and I am hoping its good for another few quarters. Meanwhile, the commerical vision systems business is just beginning new product cycles based on falling prices. They are adding distribution and partnerships to increase sales in this area just like they did with thermography a few years ago.

c. if it pulls back, I will buy more -- do not think any slowdown will last long because their new product cycles seem short. Key is their ability to continue to produce step function cost/price drops that encourage new applications and new customers.

d. momentum is strong -- what happens if the pullback comes after the stock has doubled? that's why I buy some now -- would really be upset if I missed a double in a stock I identified as having a great secular story.

e. expect margins to widen some more based on continued operating leverage in the commercial vision area where margins are quite low compared to the corporate average. stocks do well on increasing margins.

that's all I can think of tonight.