Recommendation: Long Target: $6.96+

DESCRIPTION

NUHC distributes high technology active and passive components (memory chips, microprocessors, consumer electronics, etc).

For the time being, it may be prudent to expose yourself to the long side of the market. The incredible correction and volatility the market has enjoyed these past few weeks has been nothing short of mind-numbing, heart attack-causing, hair-loss catalyst action. Just look at the following chart of the S&P 500 while bearing in mind the VIX closed at 53 and change from a peak of 80 or so.

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Whether or not the statement made yesterday by Microsoft (MSFT) CEO Ballmer holds any weight, Yahoo! (YHOO) is looking very attractive at these levels. A few things to consider:

A few more points of interest regarding Yahoo!. It's currently trading at ~6x cash & ST debt securities with a market cap of ~$18b and ~$3b in cash and ST debt securities. Carl Icahn sits on the board now and was a proponent of the initial buyout offer.

Gushan Environmental Energy Limited (GU) is a Chinese company that produces biodiesel and by-products of biodiesel.

Here is some fundamental information relevant to a potential decision. Current capacity of 290,000 tons is expected to increase to 400,000 tons in Q408 through the construction of two additional production facilities and a ramp up in production capacity at a pre-existing facility. In addition, GU has expectations of adding an additional 200,000 tons of capacity throughout 2009. Using what I expect to be an extremely conservative estimate for the price per ton of biodiesel ($435pt or ~50% of Q208 price), I derive FY09 revenue of $172mm with operating income of $57mm.

Oil has enjoyed what I would describe as an “increase of excess” in recent months. For a commodity to appreciate by over 34% in seven weeks is an extraordinary feat. This is especially true when demand has certainly not outstripped supply to warrant such a rapid and exorbitant move. Allow me to welcome you all ladies and gentlemen, to the gravity-free zone [GFZ] of the oil trade.

The gravity-free zone is when a specific asset or asset class is on a bullish momentum run that simply refuses to be stopped. The money is just so damn easy that you don’t question it or the faulty reasoning behind it. Why look a gift horse in the mouth? In essence it’s like that Tiger Woods commercial where he hits a golf ball on the moon and Newton’s 1^st Law of Motion comes into play: every object in a state of uniform motion tends to remain in that state of motion unless an external force is applied to it. Well the bullish force in the oil trade is greed while the bearish force is common sense and paranoia. As of now we all see that the bulls are winning hand over fist, battle after battle. In fact it’s as if the bears aren’t even showing up. Some commentators and authors in recent articles have even suggested that the bears are helping the bulls because they’re covering wrong-way bets, thus furthering the price appreciation.

There have been some authors on Seeking Alpha over the past couple of days who have taken it upon themselves to shout from the rooftops "Ackman's a self-serving thief! Ackman's a self-serving thief!" while laying out their arguments, er, should I say MBIA's (MBI) arguments, and infusing their own little twist. I've decided to use a logical approach to the situation and ask some questions.

First, some disclosure: I don't know Ackman, never met him, and I am not long or short the insurers, although I do own Citigroup (C) puts, which would see an indirect benefit if the insurers were downgraded.

Recommendation: Strong Buy

Reasoning: Incredible valuations, Superb financial security

Courtesy of our Federal Reserve I am requiring myself to pen an article regarding my outlook on the stock market. My previous article regarding the economy still applies. However, one thing I've learned in my short years is that the stock market rarely ever ebbs and flows in unison with the economy. Expectations determine stock market prices more often than stated facts.

I still see great economic suffering coming down the pipeline. This has become drastically more prevalent since the insurers have come under intense financial pressure. Despite this, in terms of the stock market I'm beginning to come around. While we may still have a few large selloffs in our immediate future, the Fed has seemingly decided to further the continuation of the asset bubble/recession cycle. In the good old days, which for me were the 90s (I know, you all hate me now), I saw one of the greatest asset bubbles ever occur in the tech boom. From what I've gathered the economic cycle is supposed to boom and then bust but rarely to the severe extent that we've seen in the past decade. It's as if our economy is beginning to enjoy the rapid increases in volatility that our financial markets are currently experiencing.

Folks, in everyone's favorite Governator's words, "Let's get serious". Take off your bear and bull suits. Take off your biases determined by your current portfolio allocations. Step back, take a deeeeeeep breath, and look at the overall picture.

Our current situation is bad. Plain and simple b-a-d. No, we're not going to zero. No, the Dow probably won't hit 5,000 like some foolish person on tv said recently. But yes, housing is in crisis mode. Yes, the sell off last week was false. This rally is a simple retest of resistance prior to the Fed's ruling on rates. Yes, the market has been acting like a spoiled little brat - screaming and whining for more and more rate cuts. The problem is that these cuts came too late AND they're helping the wrong people. The Fed is too data dependent and it causes a reaction instead of a response. Oh, and Greenspan, well, not much to say to you except thanks for creating opportunity through destruction (I was one of your biggest fans in high school but hindsight has taught me to be otherwise - not that I wouldn't have done 100x more damage than you).

Circuit City (CC) is a company wrought with cancer. To one side lay death and bankruptcy and the other a prosperous and heroic return to life and profitability.

The issue shareholders are currently facing is that the man who will probably determine which way CC falls is the same man who brought them to this point: current Chairman and CEO Philip Schoonover. I quote from the most recent 10Q: "We underestimated the financial impact from the disruption of our transformation work." Mr. Schoonover is describing the negative financial impact caused by his decision to remodel stores during the holiday season. How intelligent would one need to be to understand that holiday shoppers want things clean, fresh, and decorated? They don't want construction going on while they shop – it ruins the mood and is an especially dangerous business maneuver when everyone knows Best Buy (BBY) is always a pleasant place for holiday gift-finding. Why would one who holds such a responsibility to the shareholders of the company he operates make this type of decision?

"Ad augusta per angusta" [to high places by narrow roads]… it seems as though our Latin predecessors were seeking alpha as well!

2008 is shaping up to be a difficult market to navigate for individuals as well as professionals. The croupier is about to spin the roulette wheel and wealth managers are placing their bets. Will the ball land on red (recession) or black (progression)? Let's examine a core-strategy for red. This is intended to make suggestions on a few key areas which should not be ignored, not as a design for an entire portfolio.

"If I were your age, I'd be depressed."

That is a quote from a conversation my grandfather and I had over Thanksgiving. It came after he listed off several of the recent global economic and political events. While I'm about as far from depressed as it gets, I do share some of his views on what's happening economically.

It's been an exciting run since January of 2003 for many of us. The S&P has seen tremendous growth (better than any CD, that's for sure). Retailers such as Best Buy (BBY) have also enjoyed phenomenal growth over the same period. However, ladies and gentlemen, the gig is up. Short BBY now, while it's above $50. My price target is $45.