From October 2001 until November 2005 we were adamant in the belief that there was a bull market in small/mid-capitalization stocks. From March 2003 we have been unwaveringly bullish on Japan and remain so. Additionally, we have steadfastly embraced “stuff stocks” (energy, timber, fertilizer, agricultural, base/precious metals, etc.) since October 2001 even though we have periodically rebalanced those investment positions to keep their portfolio weightings in-line with our objectives. Yet we continue to think “stuff” is in a secular bull market and evidentially we are not the only ones given Anadarko’s (APC) ($44.90/Outperform) bid last week for Kerr-McGee (KMG) ($68.61) and Western Gas (WGR/$59.67/Market Perform), which put “bid” into the entire energy space. Given the fact that most energy stocks have experienced 20%+ declines, we called our Houston-based energy analysts to get their top names. To wit: Ultra Petroleum (UPL) ($56.02/Strong Buy); Todco (THE) $35.86/Strong Buy); Patterson-UTI Energy (PTEN) ($27.31/Strong Buy); and Comstock Resources (CRK) ($27.41/Strong Buy). We continue to like the strategy of buying the “flops” in fundamentally sound companies.