I read a story that the SEC is going to implement some new rules that are intended to curb naked short selling and I think the SEC should have passed tougher rules long ago.

I believe hedge funds and institutions have been using naked shorting to manipulate stock prices for quite a while, especially among small caps. I think this has gotten more pronounced in the last couple of years.

Beacon Power (BCON) is my top stock pick for 2008. Beacon Power is on the verge of commercializing its “flywheel” technology and the company has a ton of positive catalysts going forward. I think this stock could very easily be a multibagger.

Beacon Power’s flywheel energy storage system helps support stable and reliable electricity grid operation. The flywheel system stores excess electrical energy from the grid in the form of kinetic energy via a mechanical battery spinning at very high speeds (>20,000 rpm). When the grid is short on electrical power the motor driving the flywheel acts as a generator and the kinetic energy is converted back to electrical power. (Look at these two short videos from the Beacon website for a better understanding of frequency regulation: video 1, video 2.)

One of the investment strategies Peter Lynch touches on in his book One Up on Wall Street is to invest in companies that that you see every day. For instance, if you notice a new restaurant or retail store is performing really well you should check out the company’s stock (assuming it’s a publicly traded company) and see how the stock is performing. This can lead to potentially profitable investment opportunities.

One company that I have recently checked out is Redbox. If you don’t know the company by its name you have probably seen its DVD kiosks at a McDonald's (MCD), Walmart (WMT), or Walgreens (WAG). I first saw Redbox kiosks a couple of years ago but I never rented a movie from one until a few months ago. Now that I have tried it out I will only use Blockbuster (BBI) as a second option to Redbox.

One of the first stocks I recommended on my website was Silverleaf Resorts (SVLF). The stock was trading at low PE ratio and was also trading below book value. I recommended selling too early, but my recommendation still resulted in a gain of 18% in five months. I have continued to follow Silverleaf Resorts and I think the current stock price provides a better opportunity than when I recommended the company previously.

Silverleaf Resorts is a perfect example of what value investors look for. According to Yahoo Finance, Silverleaf has a book value of $4.98; however, the current stock price is only $1.88 at yesterday’s close. That means Silverleaf Resorts is trading at only 38% of its actual value.

I have written quite a few articles about the speculation in oil over the last few months and I want to revisit some of those articles because I have been proven correct.

First, there can no longer be a debate about whether the excessive rise in oil futures was due to speculation or supply and demand fundamentals. It was obviously due to speculation. In fact, the last thing oil was trading on during its run was supply and demand.

I’ve looked into the financials of several solar companies and Akeena Solar is by far the worst solar company I’ve checked out based on fundamentals. Akeena Solar is a good example of what not to look for in a stock.

For the last five quarters the net loss of Akeena Solar has grown. In Q1 of 2007 Akeena Solar reported a net loss 930,000. In Q1 of 2008 Akeena’s net loss ballooned to 4.6 million.

There have been a lot of dramatic steps taken by the Fed and the SEC to prevent the deserved collapse of some banks. While I understand that they don’t want to see a run on the banking sector I don’t think that would be the case if the market were left to sort things out on its own. The banks that took excessive risk and leverage would be in trouble and the banks that managed their risk and leverage would be fine. In fact the actions taken by the Fed and the SEC are doing more harm than good.

First, the Fed and the SEC are sending the message that financial institutions can profit from excess risk when times are going good and not have to face the consequences of their actions when times turn bad. This is a terrible message to send and it is only going to lead to the same problems in the future. Banks will have no deterrent from taking the same risks in the future if they know that the government is going to bail them out with taxpayer money when the risks turn sour.

I wrote an article about the foolish speculating in Converted Organics (COIN) a couple of months ago, and just as I predicted, the greed that was driving up the stock price turned to fear and the stock price took a huge dive. However, the stock price rebounded from its lows and held up for a little while but is now starting to sell off again.

The reason for the most recent sell-off is the company issued a dismal earnings report last Friday. Converted Organics reported revenue of $260,000 and a loss of $2.4 million. That is pretty egregious. Some of the greater fools that are still buying Converted Organic are going to say that this earnings report is better than the last earnings report because the company actually reported some revenue. However, this company was actually a better speculative investment when it had no revenue.

I recommended airline stocks, American Airlines (AMR) in particular, as a play on oil falling in price from its highly speculative levels. I figured oil would pull back quite a bit after the Fed announced it would halt future rate cuts since oil has been rising mainly as a hedge against the falling dollar. However, after a very brief fall, speculators have sent oil right back up in spite of bearish reasons for oil to go down.

Yesterday it was reported oil inventories rose 5.7 million barrels last week and supplies of oil have now climbed a total of 11.9 million barrels over the past three weeks. However, oil continues to go up for reasons such as supply disruptions in Nigeria that only affect a few thousand barrels.

The entire airline industry has rallied just as I predicted and American Airlines (AMR) is already close to my price target. However, I think airlines have more room to run and I wouldn't recommend selling yet. Oil is still way overpriced and should continue to correct. Also, there may be more merger/alliance announcements released.

One of the reasons I was able to make such a great call on airline stocks is I like to keep track of the price of oil. However, for the past couple of years I have been disturbed by the obvious bias that is not disclosed in stories about the price of oil. If you read ten stories about the price of oil maybe one will mention the actual supply and demand of oil compared to normal levels. Most stories will have some obviously biased clown talking about potential supply disruptions, the falling dollar, or some other speculative nonsense.

The stock prices of airlines have taken quite a hit in the last year as speculators sent the price of oil up to record levels. In the past few days, oil has pulled back from its record highs and the airlines have started to rally. I expect oil to continue to sell off and I think buying airline stocks is a good short term play. There is also talk of consolidation in the airline industry so this too should bode well for airline stocks.

I think oil will continue to sell off for a couple of reasons. First, the Fed is expected to signal that it is going to stop lowering interest rates for a while. This will help the dollar strengthen and it takes away the major reason speculators have been bidding up oil (they have been buying oil as a hedge against the falling dollar). Second, the high price of oil and the sluggish economy is reducing demand for oil. I think future supply reports will show this.

The market is expecting the Fed to cut its key interest rate by a quarter-percentage point next week and then signal that it is finished cutting rates for the time being. However, I think the best action would be to leave the interest rate unchanged. This would help deter some of the rampant speculation that has been driving commodities to record levels.

The prices of commodities, especially oil, have veered away from supply and demand fundamentals for quite some time. The speculators in oil have seized upon the theory that oil should continue to go up as a hedge against the falling dollar, regardless of what the current supply and demand situation is. If the Fed were to take the unexpected move of leaving interest rates the same I bet oil would quickly fall to one hundred dollars, maybe lower. Other commodities that have reached bubble like levels would also pull back.

Stocks that are related to “green” technology have been some of the biggest gainers over the past year. However, a lot of these stocks (think solar companies) have already had tremendous run-ups in price and they are trading at very lofty valuations.

I have found a “green” company that is experiencing strong growth, trades at a lower valuation than most “green” stocks, and even pays a dividend. That company is Aixtron (AIXG).

Financial companies have seen severe declines over the past year and they still have the potential to go down a lot further. The reason financial companies are on such shaky ground is because the risk of rising foreclosures and loan defaults has resulted in a really severe credit crisis. For those of you who don't understand the current credit fiasco, I will try to explain it and show why financial companies still present good shorting opportunities.

Before I start I want to point out that the stock market surged on the Fed cut just like I predicted and also sold off quickly just like I predicted. If you bought financials Wednesday I hope you sold on the news and got out quickly. If you did play the short term volatility, I would recommend that you take new short positions in financials again. Now I'll go back to the credit fiasco.

Bank of America (BAC) is down moderately since my initial short recommendation and I think now would be a good time to cover and take the gain off the table. I still think financial companies are going to see further weakness but they will most likely rally today when the Fed cuts interest rates. If the Fed cuts by a point, which I have a feeling is going to happen, financials could get a significant short term boost. Instead of holding through the volatility I think it would be wise just to cover.

If you shorted Bank of America when I gave my recommendation you are sitting on a 9.5% gain in just a couple of weeks. That is not an insignificant gain considering the short amount of time it took to obtain it. You could have made an even better gain shorting other financial companies when I gave my recommendation. If you shorted Bear Sterns (BSC) you would be sitting on a huge gain.

Financials have been one of the worst performing stock sectors over the last few months and I think the weakness in the sector is going to continue. The housing market is nowhere close to finding a bottom, the economy and job growth are slowing, and gasoline prices are projected to hit all time highs this summer. All of these things are going to bode ill for financial companies in the form of increasing foreclosures and overdue credit card and loan payments. Consequently, I think it is a good time to short financial companies.

Financial companies rallied earlier this year when the Federal Reserve caved into Wall Street demands and drastically cut interest rates by 1.25 points. However, the rally didn’t last long and the share prices of financial companies are once again dropping quickly. I think you can take your pick of which financial company to short, but I am going to give a recommendation to short Bank of America (BAC).

8×8 Inc. (EGHT) is a company I have been following for a few quarters and I think now is an opportune time to buy some shares.

Sunpower Corporation (SPWR) announced their fourth quarter 2007 earnings Thursday and reported disappointing results.

Sunpower reported revenue of 224.3 million and GAAP earnings of 0.06 per share. Revenue and EPS were both down from the prior quarter’s results of revenue of 234.3 million and EPS of 0.10 per share. Sunpower gave mediocre guidance of revenue between 230 and 250 million and GAAP EPS of 0.13 – 0.16 for next quarter. The company also raised full year guidance for 2008 EPS between 1.17 and 1.27 per share.

Stocks related to solar power made a tremendous run in 2007 but they are currently grossly overpriced and overdue for a pullback. The insiders of most of these companies have been dumping shares like crazy which is never a good sign. Also, the market is expected to have a turbulent year so I think now is a good time to short some of these companies.