Six months of 2008 are now behind us and the stock market has not been a friendly place to most investors. Stability that was once found in household names that were industry giants is gone, and they have now been brought to their knees.

Many of them were the stocks we might have looked to in the past for stability, so you can be sure I put forward my five candidates with a little trepidation, but forward I go anyway. First a little review is in order.

Citigroup Inc. (NYSE: C) dropped from around $53 per share last year to around $30 in January and we can buy it today for around $17. Even at that price Goldman Sachs (NYSE: GS) has downgraded it to a sell and thinks there is more bad news to come. Citigroup was the largest bank in the world. Not any more.

General Motors (NYSE: GM) was the largest car maker in the world. That was before the stock tumbled from $43 to its current $11 range. A crushing blow to long time investors hoping that someone in the company could stop the ship from sinking.

Goldman Sachs (NYSE: GS) itself is down from $250 to a very soft $177 (it's traded as low as $161.21 today) and does not appear to be at risk as much as some of its competitors, companies that do not look as competitive any more. Bear Stearns is gone, Lehman Brothers Holdings (NYSE: LEH) is on the ropes and Merrill Lynch (NYSE: MER) and Morgan Stanley (NYSE: MS) are teetering.

Reliable software giant Microsoft Inc. (NASDAQ: MSFT) is down from $37.50 to $27 and is so desperate for some traction that it is wasting its time with something called the Zune and made an unsuccessful offer to acquire Yahoo! (NASDAQ: YHOO), which is also down on its luck; 50% down since it rejected the offer.

I do not own any of these stocks, and I could list a thousand stocks to keep them company. Some that I do own as "core holdings" that are down include Huaneng Power Intl ADS (NYSE: HNP) that was trading as high as $57 and is now a more affordable $27 per share. Another one of my favorites, Intuitive Surgical Inc (NASDAQ: ISRG), is down from $360 to $260 and may drop further as hospitals look to conserve capital the rest of the year and into the uncertainty of a new presidential administration and economy. Even that old standby for tough times Berkshire Hathaway (NYSE: BRK.B) has shown weakness dropping 20% from around $5,000 to $4,000 a share.

I could point to some energy and food stocks that have done well this year but those could lose their footing as well if oil prices do not hold up. There are those that think we are in a short term speculative bubble and they could give back some of the this year's gains.

So where to hide? What if anything has been stable? The following five companies made the grade.

1) Johnson and Johnson (NYSE: JNJ): This one is probably not any surprise. There was no money to be made here but you would not have lost any either. Year to date it has traded between $68 and $64 and that is about where it has been for quite some time. It does pay almost a 3% dividend yield and that's mighty fine these days.

2) Teva Pharmaceuticals ADR (NASDAQ: TEVA): Pharmaceuticals have long been a safe haven in troubled times and the world's largest maker of generic drugs is sitting pretty these days with expanding markets everywhere it looks. This Israeli company has traded roughly between $43 and $47 for quite some time, pays a 1% yield and looks to have plenty of upside going forward.

3) Chubb Corp (NYSE: CB) the conservative insurance company has held up better than most of its peers. Over the past six months and going back two years it has hovered between $49 and $54, all the time paying about a 2.6% yield.

4) Xcel Energy (NYSE: XEL) is a holding company for numerous utilities. Over the course of the past twelve volatile months it has been trading in a 10% range between $20 and $22 while paying a huge yield, which today stands at 4.8%.

5) Walt Disney (NYSE: DIS) may be a great place to hide if you want to forget your troubles, whether you chose the new Pixar hit movie "WALL-E" or Disneyland, or a trip down memory lane renting or downloading any one of its countless hits from its film library. The stock is currently trading in the neighborhood of $30.62, mid-point in its 52 week range. Over the past six months it has spent most of the time drifting between $30 and $33 per share with a few drops and pops here and there. The 1.1% yield is not as generous as the others but it I would be happy to take it.

What do they have in common? They are diversified among their industries, have growth horizons, and of course they all pay dividends. But the standout at this juncture seems to be that they all have shrewd conservative management teams -- and they have been in the right place, at the right time, and prepared.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. DISCLOSURE: I currently own shares of BRK.B, HNP, ISRG, JNJ.

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After five months of tracking my 2008 picks, it is rewarding to finally have a breakthrough -- topping the three major stock indices and Berkshire Hathaway (NYSE: BRK.B) too. It has been painful to have to report each month that I was being bested. However, since I have not seen anything contradicting my original rationale for my eight picks I stood my ground.

This past month saw great improvement. For the first time since I posted the original story Chasing Value: Final list -- 8 stocks for 2008, five of the eight stocks are up:

Moving into positive territory by pennies was Loews Corporation (NYSE: LTR). Among its holdings is a 51% stake in Diamond Offshore Drilling, Inc. (NYSE: DO) that has been doing well as the world remains desperate for more oil and natural gas.

Bunge Limited (NYSE: BG) was the other stock to cross the line into the black, while Valero Energy Corp. (NYSE: VLO), although improving, remains my worst performer. It is still down almost 28% after five months.

The gap between the Dow Jones Industrial Average, Standard & Poor's 500 Index and the technology heavy NASDAQ Composite Index narrowed substantially so that the three are tracking each other very closely. Stocks like Apple, Inc (NASDAQ: AAPL) and Google Inc. (NASDAQ: GOOG) continue to gain significantly and their outlooks have not been shaken amid overall pessimistic economic forecasts.

Most of my picks improved. Last month's three winners stayed on track with continued higher energy and commodity prices along with the war. Raytheon Co. (NYSE: RTN), the high tech defense contractor, Reliance Steel & Aluminum (NYSE: RS) and Anglo American plc (ADR) (NASDAQ: AAUK) do not show any signs of wavering. All three continue to be mentioned in M&A conversations with RTN on the buying side, AAUK on the selling side and RS on both.

In January, I added Newcastle Investment Corp. (NYSE: NCT) and Huaneng Power (NYSE: HNP) to my holdings. In April, as HNP hit new lows, I acquired more stock, happy to collect the 5.6% dividend yield. I did not add anything in May.

Through May, the average return for the eight picks amounted to a loss of -3.36%; a major improvement from last month's -8.96% or March's -15.96% depressing lows. This outperformed the average return of the indices: -5.47%. This year's stalking horse, Berkshire Hathaway (NYSE: BRK.B), while gaining a little during May and still besting all the indices, is down -4% for the first five months. I can't remember the last time I was ahead of 'my pal Warren' -- oooh, maybe I'm learning something!

I am Including dividends for my picks, that averaged an overall 3.91% yield through the first quarter. However, this is being adjusted because of NCT's reduced dividend to 2.99% going forward. Therefore, I will be adding 0.978% for the first three months and 0.249% (2.99% / 12) for each additional month. Through May, the loss was -3.36 + 0.978 + 0.498 = -1.88%. Using 1.8% for the average dividend of the indices times 5/12 adds 0.75%, and reduces the loss to -4.72%.

After five months I have overtaken all of the indices and BRK.B, to my surprise, even without the help of the dividends . BRK.B does not pay a dividend.

I continue to hope that 2008 does not end up being about who loses the least. The following are my eight picks with the starting share price as of December 28, 2007:

• Anglo American plc (ADR) (NASDAQ: AAUK) from $30.79 is Up to $34.28 for a gain of 11.33%.
• Bunge Limited (NYSE: BG) from $119.03 is Up to $119.37 for a gain of 0.29%.
• Huaneng Power International (ADR) (NYSE: HNP) from $41.75 is down to $33.74 for a loss of -19.19%.
• Loews Corporation (NYSE: LTR) from $49.35 is Up to $49.57 for a gain of 0.45%.
• Newcastle Investment Corp. (NYSE: NCT) from $13.08 is down to $9.92 for a loss of -24.16%.
• Raytheon Company (NYSE: RTN) from$61.51 is UP to $63.86 for a gain of +3.82%.
• Reliance Steel & Aluminum (NYSE: RS) from $54.32 is Up to $67.97 for a gain of +25.13%.
• Valero Energy Corporation (NYSE: VLO) from $70.55 is down to $50.84 for a loss of -27.94%.

The Indices:

• Dow Jones Industrial Average: 13,365.87 dropped to 12,638.32 for a loss -5.44%
• NASDAQ Composite Index: 2,674.46 dropped to 2,674.46 for a loss -5.68%
• Standard & Poor's 500 Index: 1,478.49 dropped to 1,400.38 for a loss -5.28%

This year's "stalking horse" Berkshire Hathaway (NYSE: BRK.B) (I am tracking the 'B' shares, not the more expensive 'A' shares) saw its B shares down from $4,685 to $4,498 for a loss of -4.0%.

After our Federal Reserve Chairman Ben Bernanke announced a cut in the discount rate of a quarter point to 2% last month, he changed his stance and intimated it would probably be the last cut. Now we are hearing noise there actually could be a raise in the rate depending on inflation fears. The market seems to believe that story in the long term, but not the short term one.

I still think investors should be looking at the defense sector Chasing Value: General Dynamics & Raytheon: The defense does not rest.

May Recap:

• 2008 picks: -1.88%
• BRK.B: -4.0%
• Major Indices: -4.72%

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. DISCLOSURE: I currently own shares of AAUK, BRK.B, HNP, NCT, and VLO.

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This month saw great improvement after last month's disaster. Having to conclude my findings on a specific month end day, or any day, depending on the news, sometimes distorts results. For example news on March 31 sent the market down and on April first my picks shot up an unusual amount; hopefully the trend will continue.

My riskiest stock pick Newcastle Investment Corp (NYSE: NCT) was down the most in March but recovered about 35% of the loss in April leaving Valero Energy Corp. (NYSE: VLO) the dubious honor of being my worst performer, down over 30% in the first four months of the year.

April showed improvement as many companies reported positive earnings reports or beat expectations.

The Dow Jones Industrial Average gained some ground in April as did the Standard & Poor's 500 Index, and the technology heavy NASDAQ Composite Index was up with stocks like Apple, Inc (NASDAQ: AAPL) and Google Inc. (NASDAQ: GOOG) improving significantly on very strong reports. Google is up over 25%.

Most of my picks improved. Higher food prices no doubt helped Bunge Limited (NYSE: BG) which recaptured losses moving up 23% from its recent bottom. My two winners Raytheon Co. (NYSE: RTN), the high tech defense contractor, and Reliance Steel & Aluminum (NYSE: RS) were joined by a third, Anglo American plc (ADR) (NASDAQ: AAUK) which had a 10% swing entering positive territory.

Even though it has been a tough year for most of my stock picks I have not changed perspective and my original rationale for my eight picks remains, with the exception of Valero based on its outlook. I do not change my mind based on price but on facts, and that is why though others are down it is only VLO that I am re-examining. See Chasing Value: Final list -- 8 stocks for 2008 for the original story.

In January, I added Newcastle Investment Corp. (NYSE: NCT) and Huaneng Power (NYSE:HNP) to our holdings. I made no additions in February or March among these stocks. In April as HNP hit new lows we acquired more stock. This is a long term position and we are prepared to ride the 5.6% yield as long as it is there for the taking.

Through April the average return for my eight picks was a loss of -8.96%; a welcome improvement from last months sad -15.96% showing. This under-performed the average return of the indices: -6.71%. This years stalking horse, Berkshire Hathaway (NYSE: BRK.B), sagged a little more during the month, still besting both my average and overall indices average. However, the DJIA is slightly ahead of 'my pal Warren' so far this year -- oooh!

Including dividends for my picks, they averaged 3.91% yield though the first quarter. However that must be adjusted because of NCT's reduced dividend, so I have adjusted to 2.99% going forward. Therefore I will be an adding .978% for the first 3 months and .249% (2.99% / 12) for each additional month. Through April the loss was -8.96 + .978 + . 249 = -7.73%. Using 1.8% for the average dividend of the indices divided by 3 adds 0.6%, and reduces the loss to -5.57%. I'm still the loser so far while the gap did close some. BRK.B does not pay a dividend.

I continue to hope that 2008 does not end up being about who loses the least. The following are my eight picks with the starting share price as of December 28, 2007:

• Anglo American plc (ADR) (NASDAQ: AAUK) from $30.79 is Up to $32.75 for a gain of 6.37%.
• Bunge Limited (NYSE: BG) from $119.03 is down to $114.09 for a loss of -4.15%.
• Huaneng Power International (ADR) (NYSE: HNP) from $41.75 is down to $33.65 for a loss of -19.4%.
• Loews Corporation (NYSE: LTR) from $49.35 is down to $42.11 for a loss of -14.67%.
• Newcastle Investment Corp. (NYSE: NCT) from $13.08 is down to $9.89 for a loss of -24.39%.
• Raytheon Company (NYSE: RTN) from$61.51 is UP to $63.97 for a gain of +3.4%.
• Reliance Steel & Aluminum (NYSE: RS) from $54.32 is Up to $60.78 for a gain of +11.89%.
• Valero Energy Corporation (NYSE: VLO) from $70.55 is down to $48.85 for a loss of -30.76%.

The Indices:

• Dow Jones Industrial Average: 13,365.87 dropped to 12,820.13 for a loss -4.08%
• NASDAQ Composite Index: 2,674.46 dropped to 2,412.80 for a loss -9.78%
• Standard & Poor's 500 Index: 1,478.49 dropped to 1,385.59 for a loss -6.28%

This year's "stalking horse" Berkshire Hathaway (NYSE: BRK.B) (I am tracking the 'B' shares, not the more expensive 'A' shares) saw its B shares down from $4,685 to $4,457 for a loss of -4.87%. This is the second month Berkshire has had a loss which increased by a small fraction while most everything else improved.

This year, so far, it looks like the big cap DJIA was the place to be.

Yesterday our Federal Reserve Chairman Ben Bernanke announced another cut in the discount rate of a quarter point to 2% and changed posture to signal it would probably be the last cut.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. DISCLOSURE: I currently own shares of AAUK, BRK.B, HNP, NCT, and VLO.

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• Amazon.com Inc. (NASDAQ: AMZN) profits rose 30%, easily beating analysts' expectations.
• AMETEK Inc. (NYSE: AME) beat Q1 estimates on global strength and recent acquisitions.
• Apple Inc. (NASDAQ: AAPL) easily beat Q2 expectations but offered a weak outlook.
• AT&T Inc. (NYSE: T) posted strong Q1 results thanks to the popularity of the iPhone.
• Baidu.com Inc. (NASDAQ: BIDU) beat earnings and saw an upgrade from Citigroup Inc. (NYSE: C).
• Broadcom Corp. (NASDAQ: BRCM) Q1 profit soared, and it raised its guidance.
• Cymer Inc. (NASDAQ: CYMI) beat Q1 estimates and announced a share million buyback program.
• Electronic Data Systems Inc. (NYSE: EDS) posted Q1 profits on cost cutting and new contracts.
• EMC Corp. (NYSE: EMC) Q1 earnings fell on on acquisition-related charges.
• Hexcel Corp. (NYSE: HXL) beat Q1 estimates on increased commercial aerospace sales.
• Huaneng Power ADS (NYSE: HNP) earnings plunged on coal prices, but the stock went higher.
• Level 3 Communications Inc. (NASDAQ: LVLT) narrowed its loss on higher sales of networking services.
• McAfee Inc. (NYSE: MFE) Q1 profit plunged on product development and marketing costs.
• MEMC Electronic Materials Inc. (NYSE: WFR) missed analysts' estimates for the first quarter.
• Microsoft Corp. (NASDAQ: MSFT) beat earnings expectations and raised its full-year guidance.
• Netflix Inc. (NASDAQ: NFLX) profit soared in the first quarter on increase in subscriptions.
• Nintendo Co. (OTC: NTDOY) posted record results due to the popularity of the Wii system.

• optionsXpress Holdings Inc. (NASDAQ: OXPS) reported solid results in the first quarter.
• Qualcomm Inc. (NASDAQ: QCOM) reported mixed results for the second quarter but raised its guidance.
• Texas Instruments Inc. (NYSE: TXN) Q1 earnings rose 40%, in line with analysts' expectations.
• VMware Inc. (NASDAQ: VMW) posted strong earnings and offered a positive outlook.
• Vocus Inc. (NASDAQ: VOCS) reported its 35th consecutive quarter of revenue growth.
• Yahoo! Inc. (NASDAQ: YHOO) beat Q1 estimates, helping it to face Microsoft.

Also, Jim Cramer discusses "crummy lenders" and Sheldon Liber takes a closer look at Amazon.com's results. Joseph Lazzaro considers Citigroup Inc. (NYSE: C) as a barometer of the economy. One analyst thinks financials may have hit bottom and it may be time to buy, and Jon Ogg looks at what short sellers are making of tech stocks. Ted Allrich discusses what to sell/what to buy.

Upcoming results to watch for include Verizon Communications (NYSE: VZ), Tyson Foods (NYSE: TSN), CBS Corp. (NYSE: CBS), Countrywide Financial (NYSE: CFC), U.S. Steel Corp. (NYSE: X), Office Depot (NYSE: ODP), General Motors (NYSE: GM), Procter & Gamble (NYSE: PG), Kraft Foods (NYSE: KFT), Starbucks (NASDAQ: SBUX), Time Warner (NYSE: TWX), Comcast (NASDAQ: CMCSA), Exxon Mobil (NYSE: XOM), and Chevron (NYSE: CVX).

Visit AOL Money & Finance for more earnings coverage.

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Watching one of your largest holdings go up in value is a vision of joy. The same is not true on the way down. Huaneng Power ADS (NYSE: HNP) is indeed way down from its high of $57.50. I recommended the stock last year at $26.50 and looked brilliant until last month when it completed retracing its upward trajectory back to that level.

The company reported an 80% drop in earnings attributed to higher coal costs Tuesday. However, today the value buyers must be back in droves because the stock closed up almost 16% as one of the day's big movers. The stock closed at $30.25, up over $4 per share. The following three-year chart captures the drama.

The reduced profit margins ran contrary to the company's growth, having produced about 19% more power. I have been buying the stock recently, a little early, but I am a believer in the long term story and I am on record that Huaneng Power will have a 50-year run as the largest utility in China.

This coming year it is pledged to contain (not control) coal costs. In the mean time, the stock is paying over a 6% yield. That's pretty compelling when US banks have been lowering rates on deposits along with the Fed rate and shrinking dollar.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of HNP.

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"For global income investing, I ran a screen of Chinese ADRs, and my favorite from the list is Huaneng Power (NYSE: HNP), with an indicated yield of 5.3%," says Nilus Mattive, editor of Dividend Superstars.

"Tons of power is being consumed in China, and Huaneng is right there to serve it up - the company is China's largest independent power producer. All told, Huaneng owns 17 plants outright, controls another 12, and has minority interests in five power companies.

"Profits have been rolling in at a steady clip. However, investors have recently become concerned about shrinking profit margins at Chinese utilities.

"There is certainly cause for concern: Coal is the main power source for utilities' plants, and the price of the raw material has been rising because of increased demand around the world. To make matters worse, the severe winter weather that struck China in January pushed up coal prices even further and created a
whole host of other challenges for Chinese utilities.

"However, it looks to me like investors have been far too aggressive in their selling. They're now pricing Huaneng at 10.5 times next year's earnings. The stock is so oversold that it's currently yielding 5.3%.

"What about the coal situation? Well, I think supply and demand will come back in line, and I also think this politically well-connected company will be granted price hikes to compensate for its higher input costs. I recommend income investors buy at the market."

Each day, Steven Halpern's TheStockAdvisors.com offers the latest market commentary and favorite investment ideas from the nation's leading financial newsletter advisors.

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After three months it is time to face the facts: two of the three indices beat my picks handily. I have not made a good showing so far and unlike most investment idea sources, I feel obliged to air my dirty laundry for all to see.

My riskiest stock pick Newcastle Investment Corp (NYSE:NCT) is down almost 37% this year, and the energy stocks did almost as poorly even though fuel prices are near all-time highs. The downers were not offset by this months' repeat winners.

March was a seesaw battle, but in the end there was not much to show for it. However, unlike the last day of January (down 370 points in the Dow) and February's last trading day (down 315 points), March had a final day of plus 46.49, which is not very meaningful.

The Dow Jones Industrial Average gave some ground in March as did the Standard & Poor's 500 Index while the technology heavy NASDAQ Composite Index was marginally up with stocks like Apple Inc (NASDAQ:AAPL) improving notably.

Most of my picks sagged a little more, while two remain in positive territory. Raytheon Co. (NYSE: RTN), the high tech defense contractor is up and Reliance Steel & Aluminum (NYSE: RS) is way up.

My original rational for my eight picks remains intact as far as I'm concerned, and although they are down I still like all of them for the year. See Chasing Value: Final list -- 8 stocks for 2008 for the original story. In January, I added Newcastle Investment Corp. (NYSE: NCT) and Huaneng Power (NYSE:HNP) to my holdings. I made no additions in February or March among these stocks. The only purchase we made in March was noted in Chasing Value: Tiffany is looking more polished and that has performed very well.

This month the average return for my eight picks was a loss of -15.96%, almost doubling the -8.06% through February. This under-performed the average return of the indices: -11.19%. This years stalking horse, Berkshire Hathaway (NYSE: BRK.B), sagged a little during the month, still besting both my average and overall indices average. So once more, I must take my hat off to 'my pal Warren'.

Now, including dividends for my picks, which average 3.91% yield divided by four for the three months, allows for an additional .978%, reducing the loss to -14.98%. Using 1.8% for the average dividend of the indices divided by 4 adds 0.45%, reduces the loss to -10.74%. Nothing can make my picks look good this month. BRK.B does not pay a dividend.

Newcastle Investments reduced its dividend by two-thirds in March (going forward) to increase liquidity and possibly buy back shares. In the coming months I will account for this and reduce the accrued dividends proportionally.

I hope 2008 does not end up being about who loses the least, instead of who makes the most. The following are my eight picks with the starting share price as of December 28, 2007:

• Anglo American plc (ADR) (NASDAQ: AAUK) from $30.79 is Down to $29.77 for a loss of -3.31%.
• Bunge Limited (NYSE: BG) from $119.03 it's down to $86.88 for a loss of -27%.
• Huaneng Power International, Inc. (ADR) (NYSE: HNP) from $41.75 is down to $30.54 for a loss of -26.85%.
• Loews Corp. (NYSE: LTR) from $49.35 is down to $40.22 for a loss of -18.50%.
• Newcastle Investment Corp. (NYSE: NCT) from $13.08 is down to $8.26 for a loss of -36.85%.
• Raytheon Co. (NYSE: RTN) from$61.51 is UP to $64.61 for a gain of +5.04%.
• Reliance Steel & Aluminum (NYSE: RS) from $54.32 is Up to $59.86 for a gain of +10.2%.
• Valero Energy Corp. (NYSE: VLO) from $70.55 is down to $49.11 for a loss of -30.39%.

The Indices:

• Dow Jones Industrial Average: 13,365.87 dropped to 12,262.89 for a loss -8.25%
• NASDAQ Composite Index: 2,674.46 dropped to 2,279.10 for a loss -14.78%
• Standard & Poor's 500 Index: 1,478.49 dropped to 1,322.70 for a loss -10.54%

This year's "stalking horse" Berkshire Hathaway (NYSE: BRK.B). I am tracking the 'B' shares, not the more expensive 'A' shares. The B shares are down from $4,685 to $4,472.90 for a loss of -4.53%. This is the first month Berkshire has had much of a loss, but it still bested most everything else....so 'my pal Warren' outperformed all of the indices and my average as well. As was the case last month, individually RTN (defense sector), AAUK and RS (metals) made a better showing.

The Federal Reserve Chairman Bernanke, speaking before Congress used the recession word quite freely, and again shared his willingness to lower interest rates again.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. DISCLOSURE: I currently own shares of AAUK, BRK.B, HNP, NCT, and VLO. (and TIF)

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Two months into the year and investors' true 'metal' was tested, and mine more than most. February showed signs of improvement over January, but the last week ended hopes of any rally. The last day of January saw a 370 point drop in the Dow and February's last trading day closed with similar results, down 315 points.

The soft stock market did display many points worth noting. The Dow Jones Industrial Average was about break even for the month, indicating investors were showing some signs of support for large cap stocks, prompted in part by news of increased profits at Wal-Mart (NYSE: WMT) and share buy-backs at IBM Corp (NYSE: IBM).

I cannot say the same for the other major indices, NASDAQ Composite Index and Standard & Poor's 500 Index, which dropped significantly last month.

Some of my picks also sagged a little more, although not as much, while two turned into positive territory. In January, only Raytheon Co. (NYSE: RTN), the high tech, defense contractor, was up. In February, the weak dollar and inflation concerns boosted Anglo American plc (ADR) and Reliance Steel & Aluminum (NYSE: RS) -- two commodity plays.

I still like all of my picks for the year and if things follow the pattern that is emerging, all should be fine for my eight picks. See Chasing Value: Final list -- 8 stocks for 2008 for the original story. In January, I added Newcastle Investment Corp. (NYSE: NCT) and Huaneng Power to my holdings. I made no additions in February.

As noted among the indices, the DJIA lost the least while the NASDAQ's losses increased. The average return for my eight picks was a loss of -8.06% (in January it was -7.82%). This outperformed the average return of the indices: -10.1% (last month-7.58%). But the stalking horse, Berkshire Hathaway (NYSE: BRK.B), improved during the month besting both my average and overall indices average. So once more, I must take my hat off to 'my pal Warren'.

Now, including dividends for my picks, which average 3.91% yield divided by six for the two months, allows for an additional .652%, reducing the loss to -7.41% (-7.49%). Using 1.8% for the average dividend of the indices divided by 6 adds 0.3%, reduces the loss to -9.8% (-7.43%). You can see the importance of dividends here. When they are included, I actually have reduced my loss from last month and increased the marginal benefit over the indices. All things being equal, I will have an inherent advantage all year. BRK.B does not pay a dividend.

I hope 2008 does not end up being about who loses the least, instead of who makes the most. The following are my eight picks with the starting share price as of December 28, 2007:

• Anglo American plc (ADR) (NASDAQ: AAUK) from $30.79 is Up to $31.72 for a gain of +3.02%.
• Bunge Limited (NYSE: BG) from $119.03 it's down to $110.84 for a loss of -6.88%.
• Huaneng Power International, Inc. (ADR) (NYSE: HNP) from $41.75 is down to $32.50 for a loss of -22.16%.
• Loews Corp. (NYSE: LTR) from $49.35 is down to $41.84 for a loss of -15.22%.
• Newcastle Investment Corp. (NYSE: NCT) from $13.08 is down to $10.77 for a loss of -17.81%.
• Raytheon Co. (NYSE: RTN) from$61.51 is UP to $64.84 for a gain of +5.41%.
• Reliance Steel & Aluminum (NYSE: RS) from $54.32 is Up to $55.46 for a gain of +2.10%.
• Valero Energy Corp. (NYSE: VLO) from $70.55 is down to $57.77 for a loss of -18.11%.

The Indices:

• Dow Jones Industrial Average: 13,365.87 dropped to 12,666.39 for a loss -5.23%
• NASDAQ Composite Index: 2,674.46 dropped to 2,271.48 for a loss -15.06%
• Standard & Poor's 500 Index: 1,478.49 dropped to 1,330.63 for a loss -10.00%

This year's "stalking horse" Berkshire Hathaway (NYSE: BRK.B) was one of the few stocks that were up on Friday 2/29/08 as investors ran for cover while the DJIA sank 2.5%. I am tracking the 'B' shares, not the more expensive 'A' shares. The B shares are down from $4,685 to $4,674.50 for a loss of $0.002%, basically nothing. This is actually an improvement from January. I guess it is no shocker that 'my pal Warren' outperformed all of the indices and my average as well. Only RTN (defense sector), AAUK and RS (metals) made a better showing.

The Federal Reserve Chairman Bernanke, speaking before Congress, discussed his willingness to lower interest rates again. The "smart money" is looking for action the month of March. He spoke before Friday's drop increased the odds of a rate cut.

The annual presidential pastime of embellishing the federal budget and deficits came out indicating a $400 billion deficit is likely -- so maybe $800 billion is more likely given all that's not included and the source of the predictions.

Most comments I have received during the past month support my notion that interest rates are a band aide remedy to an economic policy that has shown no signs of long or short term fiscal restraint. But I cannot say the American consumer has shown much restraint either.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. DISCLOSURE: I currently own shares of AAUK, BRK.B, HNP, NCT, and VLO.

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January was a wild ride and February holds the promise of more of the same after yesterday's 370 point drop in the Dow. All the major indices were down in January and so were seven of my eight picks. Only Raytheon Co. (NYSE: RTN), the high tech defense contractor, was up. My two high flyers from last year, Huaneng Power International, Inc. (ADR) (NYSE: HNP) and Valero Energy Corp. (NYSE: VLO), were the biggest losers.

I have not changed my opinion of these stocks from that of the original story Chasing Value: Final list -- 8 stocks for 2008 and I am following them closely for buying opportunities. We have already added more Newcastle Investment Corp. (NYSE: NCT) and Huaneng Power to our holdings.

Among the indices, the DJIA lost the least and the NASDAQ lost the most. The average return for my eight picks was -7.82%. This underperformed the average of the indices that was -7.58% -- but my new stalking horse Berkshire Hathaway (NYSE: BRK.B) bested both, so Buffett is still the man.

Now including dividends for my picks which average 3.91% divided by 12 for the one month allows for an additional .326%, reducing the loss to -7.494%. Using 1.8% for the average dividend of the indices divided by 12 adds 0.15%, reducing the loss to -7.43%. The dividends tighted things up. BRK.B does not pay a dividend.

The following are my eight picks with the starting share price as of December 28, 2007:

• Anglo American plc (ADR) (NASDAQ: AAUK) from $30.79 is down to $27.67 for a loss of -10.13%.
• Bunge Limited (NYSE: BG) from $119.03 it's down to $117.03 for a loss of -1.63%.
• Huaneng Power International, Inc. (ADR) (NYSE: HNP) from $41.75 is down to $32.97 for a loss of -21%.
• Loews Corp. (NYSE: LTR) from $49.35 is down to $46.57 for a loss of -5.63%.
• Newcastle Investment Corp. (NYSE: NCT) from $13.08 is down to $12.50 for a loss of -4.43%.
• Raytheon Co. (NYSE: RTN) from$61.51 is UP to $65.14 for a gain of +5.9%.
• Reliance Steel & Aluminum (NYSE: RS) from $54.32 is down to $49.21 for a loss of -9.41%.
• Valero Energy Corp. (NYSE: VLO) from $70.55 is down to $49.21 for a loss of 16.28%.

• Dow Jones Industrial Average: 13,365.87 dropped to 12650.36 for a loss -5.35%
• NASDAQ Composite Index: 2,674.46 dropped to 2389.86 for a loss -10.64%
• Standard & Poor's 500 Index: 1,478.49 dropped to 1378.55 for a loss -6.7%

As I said earlier, this year's "stalking horse" will be Berkshire Hathaway (NYSE: BRK.B). Note that I will be tracking the 'B' shares, not the more expensive 'A' shares. The B shares are down from $4,685 to $4,550 for a loss of $2.88%. I guess it is no shocker that 'my pal Warren' out-performed all of the indices and my average as well. Only RTN (defense sector) and BG (food) made a better showing.

The Federal Reserve Board lowered interest rates twice during the month. I would hate to see how the market would be performing without the cuts. It seems to me that the interest rates are a band-aid remedy to an economic policy that has shown no signs of long or short term fiscal restraint. A healthy economy would not need proping up with gimmicks. I will elaborate on these issues in upcomming stories.

To find potential opportunities and verify my track record, read Chasing Value and Serious Money.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. DISCLOSURE: I currently own shares of AAUK, BRK.B, HNP, NCT,and VLO

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The price-to-cash flow ratio has been repeatedly promoted in various publications as one of the more important metrics to consider when evaluating a stock to buy. Apparently over long periods of time it is more telling than the often quoted price-to-earnings ratio. I have read that cash flow is a key metric that "my pal Warren" looks at for Berkshire Hathaway (NYSE: BRK.B) investments.

Here are the figures for the Chasing Value: Final list -- 8 stocks for 2008 in order from highest to lowest P/CF. The 12/28/08 starting stock price, yesterday's closing price and the current P/CF for the most recent fiscal year (MRFY) are listed. Only two stocks are up, while six are down.

Although Warren Buffett is a value investor and many of us would like to follow in his footsteps, he is quick to point out that value is not always the lowest P/E or historic price. Value is what you are getting for what you are paying. You want to get the most and pay the least, and you hope that some of the metrics you consider give you a picture of that. However, looking at P/CF in the case of my eight picks, at least in the short term is not very useful because the two best performers have the highest P/CF. This would seem to contradict the theory.

Notice that NCT has a negative P/CF. This is because it is a REIT with good cash flow that has been savaged by being in bad company and having some derivative loans on its books. By the way, Berkshire Hathaway's P/CF is 14.37 is on the high side too. It closed yesterday at $4,327.50.

To find potential opportunities and verify my track record, read Chasing Value and Serious Money.

DISCLOSURE: I currently own shares of AAUK, BRK.B, HNP, NCT,and VLO

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm.

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I recently posted Chasing Value: Final list -- 8 stocks for 2008 and mentioned that all of them pay a dividend. If this year is going to be as gloomy as some would have you believe, then stocks that pay dividends, as a group, will outshine those that do not.

The following are my eight picks, with the closing stock price as of my start date December 28, 2007 and the dividend yield. Last year, there were more stocks among my picks that paid a dividend higher than the S&P 500 Index average of 1.8% . This year there are only two.

• Anglo American plc (ADR) (NASDAQ: AAUK) $30.79. 1.9%
• Bunge Limited (NYSE: BG) BG was $119.03. 0.56%
• Huaneng Power International, Inc. (ADR) (NYSE: HNP) HNP was $41.75. 3.5%
• Loews Corp. (NYSE: LTR) at $49.35. 0.50%
• Newcastle Investment Corp. (NYSE: NCT) was $13.08. 22%
• Raytheon Co. (NYSE: RTN) RTN was $61.51. 1.65%
• Reliance Steel & Aluminum (NYSE: RS) $54.32 per share. 0.58%
• Valero Energy Corp. (NYSE: VLO) VLO was $70.55. 0.66%

The overall average yield for the pool of eight stocks is 3.91%, more than double the average of the indices. This will remain true even if Newcastle is forced to cut its yield in half, something I do not anticipate. Over the last 75 years, it is a historic fact that dividend paying stocks have had, as a group, a higher return than non-dividend paying stocks. This may account for why the Dow Jones Utility Index has outperformed the Dow Jones Industrial Average.

I will be tracking the progress of these stocks all year long in the Chasing Value section of BloggingStocks.

DISCLOSURE: I currently own shares of AAUK, BRK.B, HNP, NCT,and VLO

Sheldon Liber is the CEO of a small private investment company and the principal for design and research n architecture & planning firm.

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