Some real stinkers in the market

It’s been tough for everyone on the stock-picking front lately. 

In the latest edition of Fortune, the magazine laid out its worst picks from its "The Best Stocks for 2008" issue published in December. The 10 stocks the magazine picked have posted an average return of minus 12 percent, versus minus 10 percent for the S&P 500. 

Topping the list of stinkers was Merrill Lynch (MER), which has dropped 55 percent since December. Dick’s Sporting Goods (DKS) has also dropped 40 percent in that time. Other losers thus far included: Berkshire Hathaway (B shares, BRK.B), down 20 percent; Annaly Capital Management (NLY), down 13 percent; and Jacobs Engineering (JEC), down 22 percent. 

The magazine did score with Florida real estate developer St. Joe (JOE), up 30 percent, and pharmaceutical firm Genentech (DNA), up 44 percent. And the magazine didn’t count out the others -- with the exception of Dick’s -- for a late-year comeback. 

Good news  still bears no fruit   

Investors' obsession of late had been the price of oil going up. Everyday the price of a barrel of crude went up, stocks typically went down. Well has anyone noticed where crude is now? On Friday, at one point it went below $100 a barrel for the first time since April. 

That's after hitting a peak of $147 in July. But the reaction's been less than enthusiastic, giving all the turmoil that still continues in the credit markets. Deals are being made and proposed and as of this writing, everyone awaits the fate of Lehman Brothers (LEH), which is poised to fail unless it finds a buyer or a savior. 

Bond guru Bill Gross of Pimco was preaching the gloom-and-doom of a "financial tsunami" in the works. That was, until his firm, which had invested heavily in the debt of Fannie Mae and Freddie Mac, netted $1.7 billion from the government takeover of the two mortgage agencies. 

After the bailout, Gross was on CNBC saying that the Fannie-Freddie bailout likely signaled a turnaround — a rosy view that a $1.7 billion payday would no doubt inspire (no shot at him; he's a smart guy). 

But hopefully he's right and the little guys get a chance here soon. 

Down but not out 

I realize I've been a broken record lately about how dismal things are, but I have not given up. Even though I pulled the plug on my positions, I still await signs of some sort of restored faith. There's been a lot of chatter about retailers coming back in favor soon. Jim Cramer of "Mad Money" thinks that if gas prices continue to go down, consumers may actually go shopping this Christmas. 

I think his thesis overlooks the thousands of people who are losing their jobs each month. Also, pump prices haven't been heading down like crude prices have. But hey, maybe he's right. If you agree, here are a few that Investor's Business Daily have been giving high marks based on sales and fundamentals: Urban Outfitters (URBN), Wal-Mart (WMT), Aeropostale (ARO) and Buckle (BKE). 

Happy hunting, but as always, proceed at your own risk.

Brian