Shortly after the Vioxx fiasco about three years ago, Merck & Co (NYSE: MRK) stock took a dive, and many analysts thought it would be down for the count, with potential losses from litigation running into the tens of billions of dollars. Some analyst reports thought the losses could reach as high $50 billion.

Looking back now, I am glad I bought it when it was down and I am glad I kept it after its run-up. About six months ago, after Merck continued to make progress in defending itself against the thousands of pending lawsuits, I penned Merck shareholders dancing in street; new ones join in! As long as you continue to educate yourself about business and investing, you will continue to read about the importance of good management in the longterm success of a company. More than any other, Merck has been voted the top-managed company in the world, yet the stock dropped immediately as traders and fair-weather friends ran.

Well, those that looked closer can be proud of the current state of the company, as Merck again has reported better-than-expected earnings results. The company said it earned $1.53 billion, or 70 cents per share, compared with $941 million, or 43 cents per share, in the year-ago period when it took a $598 million charge for legal expenses related to its withdrawn Vioxx arthritis drug.