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 »

"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 »

“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 »

I made brief mention of how the 8 stocks were purchased on the Performance page, but wanted to provide a full post on the topic. In general, "the bottom" is not an event, but a process. This is true of stock markets and should also hold true for individual stocks. When I decided to begin the 8 Stock Portfolio on August 1, 2008, it was not because I thought the stock market or any of the … read on »

Over the weekend R.H. Donnelley was featured in a Barron's article. The article outlines some of the obstacles which have weighed on the stock, but provides a measure of optimism saying that the stock is a "risky but attractive" way to bet on the continued viability of the yellow pages. The stock responded by rising over 15% today. I selected RHD for the 8 Stock Portfolio when it was $1.47 per share. After today's move it … read on »

Why these 8 stocks? After running a variety of screens, I came up with an initial list of almost 30 candidate stocks. All of the stocks in this group were down more than 50% from their 52 week highs and were under pressure for a variety of reasons. After individually reviewing each of the candidate stocks, a small group of 8 rose to the top. Many of the stocks are consumer focused, but I believe that … read on »

"Oh what happened now? Did the rubble burn down?" - Ned Flanders The stock market is not in a happy place. Even though the major indexes are down a mere 20% or so, many individual stocks have been absolutely taken to the woodshed. Despite the recent rally in the financials, many stocks are still down stomach turning amounts. Some stocks are down 50%, 70%, 90% or more from their 52 week highs. The reason? Take your … read on »