Are you looking for stability in a down market? If you come across Merck & Co. (NYSE: MRK), you found it!. Yes, I have been a Merck cheerleader the past few years and I think it is one of the safe havens (how daring of me) for 2008. In fact, the large pharmaceutical companies have traditionally been safe havens when the stock market is under stress.

As I type away today, the market is down again, no it's up, no it's down -- It finally ended higher with a nice gain, but Merck has been going only up, closing today at $60.50. The stock could actually trade horizontally this year, or offer only a slight gain over the year. Given the negativity in the market, that might be just fine when you add in Merck's dividend.

Below is Merck's five-year chart, which indicates the real time to buy was during the height of the Vioxx scandal in the fall of 2004, although you would have done fine almost any time in the past three years. The stock has not fully regained its past glory but it is heading there.

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or 43 cents per share, in the year-ago period when it took a $598 million charge for legal expenses related to its withdrawn Vioxx arthritis drug.

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.

And I'm one of them...

It was reported today in the WSJ Law blog that Merck's Win Another Loss for Plaintiffs' Bar as the company withstood an onslaught of potential claims when the judge in the case threw out the law suit based, not on Merck's outlined defense, but on the simple timing of the claims which according to statute missed an implied deadline to file of two years. Naturally the case will be appealed but this is a big win and the shares are up over $4 to $50.40 as I write. It closed yesterday at $46.36 per share. More stock highlights are being reported on Marketwatch.com Merck shares jump on Vioxx rulings, raised forecast.

This is sure to be one of the big stories of the day, and should be big news in the coming week as more details unfold.

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.