One Guy's Investments: What to buy? The red beckons.

This has been a brutal week on the 'ol portfolio. I have sold only the one company that I really lost faith in, as I wrote here, but many of my holdings are down 10% or more in the last few days. This is, of course, the price you pay for having a primarily growth-oriented portfolio when the market loses confidence and selloffs ensue -- the speed with which they rise is ably matched by their speed of descent.

I am virtually always fully invested -- I generally don't see the point of holding much cash in my investment accounts. After all, if stocks generally go up over time wouldn't you want your investment money to be in stocks? Now, certainly we might make predictions about which stocks will rise or fall, but I'm unfcomfortable making market-wide predictions. If the market generally goes up over long periods of time and my holding periods tend to be long, then holding cash is counterintuitive -- at current money market rates, cash is losing money if it sits in my brokerage account.

Of course, this logic is easily assailed when the market is going down, as it is this week. And this week, when I have the funds freed up by my sale of Great Wolf (WOLF) to invest, I am overwhelmed by the number of my current holdings that appear to me to be reasonable places for new money right now.

There are a few stocks that have simply been clobbered in my portfolio -- Taser (TASR), by far my worst investment ever, is down 60%+ since my purchase and I'm certainly not willing to buy more with the SEC investigation looming. Click Commerce (CKCM), Design Within Reach (DWRI), Dreamworks Animation (DWA), FARO (FARO), Overstock (OSTK), and Shanda (SNDA) are all down at least 25%, most quite a bit more than that. I still like all these companies to varying degrees, and I think I paid fairly reasonable prices for them, given my estimates of their long-term growth prospects.

In the case of Click Commerce and Design Within Reach I leapt in too early, but in most cases I don't think their prospects have changed ... so should I buy more of one of these? Given my penchant for coming up bloody-handed when trying to catch a falling knife, I worry about that.

Or there are the stocks in my portfolio that I'm pleased with and think offer real potential going forward, though they're not particularly beaten up at the moment. Some I'm already overweight in, like Google (GOOG), Protein Design Labs (PDLI), and Vertex Pharma (VRTX), so I'm not interested in piling on any more in those guys.

Other ones that I'm still excited about and think look reasonable at these prices are Universal Display (PANL), Harris and Harris (TINY), Rofin-Sinar (RSTI), Marvel (MVL), Imax (IMAX), Exelixis (EXEL), MEMC Electronic Materials (WFR), Formfactor (FORM), and Chico's (CHS). I can justify having my next purchase be in any of those companies -- none have climbed dramatically since I last purchased them, but neither are they completely beaten down bargains, though all have good prospects over the next few years. I need to look more closely at FARO and RSTI in particular, since I'm intrigued by these manufacturing services companies and have not put any money into that sector in quite some time.

Some, like EXEL and FORM, have potential catalysts in the coming months (EXEL with clinical trial news next month, FORM with eventual news of their new and oft-delayed plant) that could move them in either direction -- do I want to be in before that news comes? Others seem to be riding trends that the market is pretty shaky about right now -- semiconductor growth for WFR and FORM, OLED commercialization for PANL, the expected nanotechnology IPO boom for TINY. I'm confident that I'm on the right side of those trends for the long term right now, but am I confident enough that I want to double down on one of those bets?

And there are lots of other stocks I've been looking at as well. In retail, I still think about buying Costco (COST) -- today it's about at the same price it was when it went on my wish list in July, and I'm a little bit regretful that I didn't jump on in the low 40s when gas price mania was at its worst. In the financial sector, I've recently taken a shine to Affiliated Managers Group (AMG), a really unique company -- I think they look solid moving forward, especially if we are really entering a stock-pickers market where institutions and individual investors are going to flock to the best money managers ... but I'd rather look at AMG if they pulled back a bit on fears of a declining market, which they haven't done to any real degree as of yet, and I'm still a little uncomfortable with their debt levels.

And there are several companies that I've owned in the past and sold for one reason or another, but would like to own again. Frontline (FRO), Torm (TRMD), and Ship Finance (SFL) in the tanker sector will at some point look attractive again if I can get a handle on the levels of new tankers entering the market in the next two years -- or if their share prices continue to fall and dividends become more predictable. I continue to love ProLogis (PLD) but am very wary about buying into a REIT with such a low yield (even though growth, especially in Asia, looks quite solid).

So that's a peek inside one cluttered investment mind -- when the portfolio turns to a deep red as it's doing these days and I have cash at the ready, the temptations to buy at sale prices are everywhere. I have no idea what the market is going to do today or next week or next year and, in fact, I don't believe that part of the future is really knowable ... but I do believe I can make smart long-term investments if I understand a company and its prospects very well and pay a reasonable price for its shares.

So what should I buy if I can afford only one new position in the next couple weeks? I think I need to lay off the biotech investments for a while, since I'm pretty overweight in that sector, but otherwise it's pretty wide open ... I'll let you know what I decide.