When Merck and Co. (NYSE: MRK) took a nose dive upon news of the the Vioxx (TM) 'scandal' and the stock plunged rapidly in the usual panic that besets such stories, I received a call from my mother-in-law. She is a long time Merck shareholder and she asked me what to do. I immediately said buy more - and she did, at $28 if memory serves me correct.

Now to the average contrarian, value investor or fool, buying at this time (catching a falling knife) may result in a less than satisfactory financial position and the risks could be high. But sticking your neck out to make this call when it's your mother-in-laws retirement money and you are making on the spot calculations, could lead to some very unpleasant and long lasting situations. Like on every phone call or family get together forever.

Actually I was recommending Merck to my whole family and have been for some time but this one was both the easiest and the toughest because even if you are right the downside risk was higher than usual.

Oh well, I am right for this moment in time and she still loves me. Things could change, but so far so good...and getting better it seems. A late breaking report by the Associated Press Merck Soars to Post-Vioxx High reviews the days legal events.

Merck Closed today up $3.85 today at 50.21 but reached an interim day high of $50.80, the highest it has been in years. And as I do like to look at the funny analysts from time to time several investment houses either started Merck as a buy or changed their calls from sell to buy. For myself, it is a hold. I hate to buy in the midst of such euphoria and absolutely would not follow any analysts calls.

If you are interested in long-term value investing read Chasing Value.

Sheldon Liber is the CEO of a small private investment company and the vice president for design and research at an architecture & planning firm. Check out my other posts for BloggingStocks here.