Kirkland's, Silicon Laboratories, Southwest Airlines, Sirius XM Radio, and Unisys have floated to the top.

The one thing I love more than a stock success story is a stock success story that nobody saw coming. These frequently come from the small cap segment of the market, and almost as frequently, these stocks start out their journey as penny stocks. I've got five such stocks to consider today... two are true penny stocks (four, if you go back to February's prices), and four are 'small' by most everyone's definition. Yet, I think all five could pack a large punch for portfolios.

There’s an old saying used to describe the inability to see the bigger picture simply because there are too many other nearby distractions….”You can’t see the forest for the trees.” I have to wonder if the recent obsession with determining fundamental values, finding the bottom, and dealing with economic Armageddon has let us lose sight of something I think may be even more alarming.

What could possibly be more alarming than the S&P 500 losing 40% in three months? How about a good chance we could do it again four to five years from now? Such is the nature of a secular bear market - two words I heard batted around more in 2002 than I have in 2008. That’s odd, too, considering there’s a better argument for a secular bear now than there was then.

Let's see, with inflation growing the fastest it has in 17 years last month - a whopping 0.8% - the twelve month inflation rate is now 5.6%. We've not seen annual inflation like that since 1991. Wow. The Fed really should do something (i.e. raise rates), but the lesser-told yield curve story may have them trapped between a rock and a hard place. More on that below.

The culprits were the usual suspects - energy and food.

I'd be the first to admit that if you had told me a year ago that the iShares Malaysia ETF (EWM) was going to outperform almost any other ETF, I would have been surprised there was even an ETF for the country. It's a little smaller than Montana.

Since then, we've all learned big things can come in small packages.

In an article that I recently penned, I made the argument that the U.S. economy is already in a recession - even if the powers that be don't want to see it. My argument was fairly simple - unemployment is up, capacity utilization is down, inflation is up, and the Fed is still pushing rates lower. Even if all of those trends were halted right now, the damage has still been done.

I want to add another layer of recession evidence in this article. More importantly, I want to give you a few ideas so you can defend your portfolio just in case any recession cuts deep.

If it looks like a duck, walks like a duck, and quacks like a duck, well my friends, it's a duck. I think the same can be said about a recession. Even though our friends down at the National Bureau of Economic Research aren't saying it yet, I'll go ahead and go on record... I think we're already in a recession. (Insert gasp here.)

Before you start cursing at me or stick your head in the oven, let me also say that this isn't inherently a reason to sell stocks. Well, it might be a reason so sell some stocks, but I think it could be a reason to buy other stocks. More on that in a second.