A portfolio of 8 stock picks from the edge

Today we have witnessed the engineered bailout of America's fourth largest bank Wachovia (WB), failure to pass the government's rescue plan, and the largest point drop for the Dow in history. In ancient Greek tradgedies there was a plot device known as "Deus ex machina." This literally means "God from a machine." Man would get himself into a insoluable crisis and a god was lowered onto the stage using machinery to quickly resolve the situation. In recent … read on »

When I picked stocks for the 8 Stock Portfolio, I had initially short listed a group of 28 stocks. I eventually removed 20 stocks and decided to focus on a select group of eight. I wrote a series of posts about the 20 Stocks Left Behind explaining my rationale for eliminating the various names from consideration. After the historic events of last week and the tumultuous movements of the markets, I thought that now would be … read on »

"Don't you see what's happening? Potter isn't selling. Potter's buying! And why? Because we're panicky and he's not." -George Bailey Around mid-week the overall performance of the 8 Stock Portfolio actually dipped into negative territory. At the time, every stock with a financial aspect was being sold into oblivion, dragging down every asset that wasn’t made of gold. The market was either going to capitulate horribly or something was going to happen to prevent it. On … read on »

"Marge, my friend, I haven't learned a thing." -Homer Simpson I don't think I have to rehash the events of the past few days. I've put together a quick list of possible lessons or takeaways. If you've lost money, at least learn from it. You don’t have to be in on every trade or every situation. When FNM and FRE were teetering on the brink, they experienced periods of sharp gains amidst the sharp declines. Even during the … read on »

"On top of the world or in the depths of despair." This week Wall Street's fourth largest investment bank fell 77%. The largest US Savings & Loan declined 36% after being down as much as 59%. The largest US insurance company fell 46%.  But despite these crushing losses for Lehman Brothers, Washington Mutual, and AIG, the indexes all posted gains for the week. At various times this year, the entire market has become seemingly fixated on a … read on »

As noted by Bespoke, Chico's stock has put together an enviable string of up-days amidst a period of market turmoil. The stock has now risen for 11 consecutive trading days. The streak started on August 22, 2008. The stock rose from the prior day's close of 4.48 to 4.84. The following days saw the stock close at 4.98, 5.09, 5.59, 5.70, 5.74, 5.90, 6.11, 6.28, 6.32, and today 6.67. During the 11 day period, Chico's experienced a … read on »

"If I'm too scared to use my powers... then I don't deserve them." -Hiro Nakamura Friday stories began to circulate that the government would soon act to bail out Fannie Mae and Freddie Mac. Today a top House Democrat confirmed that Treasury Secretary Hank Paulson "intends to use the powers that Congress provided." Paulson had obtained his "bailout powers" from Congress back in July under the premise that having such powers would insure that they never needed … read on »

"No, there's no one else, I find, To undermine or dash a hope Quite like you." -Aimee Mann Bad news from every direction tortured the stock market 3% lower. The selling was broad based and few stocks were spared. Let's take a break from the carnage and look at some recent news items for the 8 Stock Portfolio. Chico's Chico's (CHS) reported a same store sales decline of 10% for August. This double digit decline was apparently better than expected and … read on »

“So wake up the members of my nation It's your time to be There's no chance unless you take one And it's time to see The brighter side of every situation Some things are meant to be So give me your best and leave the rest to me” -Miranda Cosgrove With the utterly disheartening collapse of today's "Gustav Relief Rally" I thought it would be a good time to write a post on some of the ideas going through my head around the … read on »