I have heard several politicians, including John Culbertson, banty around "mark to market", in conjunction with an increase in insured limits (to $2.5 million) on bank deposits as a solution to the current financial crisis.

I am here to completely debunk that idea as a workable solution. While it will alleviate some pressure on banks, it will definitely not start them lending again. It will not turn on the spigot of credit, only new capital will solve that problem -- and new capital will only invest in financial institutions when the "toxic assets" are removed from the balance sheets.

I have been interested in adding some energy exposure to the portfolio for some time, but prices had increased so much that I was uncomfortable with all sectors of energy.

In the last month though, prices have moderated with the drop in oil prices and concerns about expiration of government incentives for clean energy alternatives. I am taking this opportunity to add exposure to the clean energy space.

I have two daughters and last week I took a vacation day to take them to Six Flags Great America, just north of Chicago. In years past, I have followed the amusement park industry as a potential investment, but I have never pulled the trigger. Good thing I haven't; this industry looks like a disaster and Six Flags (SIX) is the poster child.

I have followed Build a Bear Workshop (BBW) since it first went public in late 2004, and I have owned it profitably for a brief period after the IPO. However, I had last sold shares in late 2005 and had lost track of the company during the past year. BBW first came public around $25 per share and had traded as high as $37 in the early days, so I was amazed to learn that the stock had dropped below $11 per share. At those prices, I snapped up 400 shares late last week. BBW is a retail concept with 375 Build a Bear Workshops worldwide. Parents bring their kids for an interactive make-your-own stuffed animal experience. My two girls love the place, and I constantly hear about how long it has been since we have last been to BBW. They have been branching into other similar concepts, including make-your-own Major League Baseball mascot in-stadium locations, Build a Dino stores and a virtual world, www.buildabearville.com.

Earnings were down about 18% in the first quarter to $0.32 per share, but the drop was less than analysts expected. For the year, the Company is expected to earn about $1.13 per share which would be about 10% growth from 2007. However, even if earnings are flat this year those would be decent results in the face of this recession.. The real growth for the Company will come internationally as they currently have 271 stores in the US with a total potential US market of 375-400 stores.

Bear markets and recessions bring out the Crazy, Paranoid Mr. Market instead of the Happy Go Lucky, Greedy Mr. Market.Crazy, Paranoid Mr. Market does not want to own certain stocks or asset classes at any price; he is selling indiscriminately without looking back. Greedy, level-headed investors would be wise to take notice when Crazy, Paranoid Mr. Market is running to hide. There are opportunities ripe for the taking.

During the last recession in 2002, the small internet companies were the investing toxic waste that no one wanted to own. If you can remember back to 2000, virtually every investor in the U.S. was overweighted in technology stocks with a heavy bent toward the internet. By 2002, most of these stocks had fallen 70% to 90% and most Americans had felt that pinch. Any reminder of those days was painful, and so most investors had purged their portfolio of anything internet-related and they did not want to get back in. However, for a few of us, this represented a huge opportunity that we could not pass up.

A couple weeks ago I mentioned some empirical data that I was seeing in industries that I follow in my private equity job. As a result, I bought a hedge in the Proshares Ultra QQQ (QID).

The recent retail sales drop of 0.6% in February is the first market indication of this weakness. Unfortunately, I think there is more bad news to come in the short term. I would expect the durable companies and home improvement companies to pre-announce bad earnings for the first quarter. Both January and February have been very soft in consumer spending, especially for big ticket items.

I am not a technical analyst nor am I a market timer, but I am very concerned about another leg down in the economy and stock market over the next several months. If such a decline occurs, then this QID position will provide me with more buying power when I sell it. If it does not occur, then I will have muted the returns in the rest of my portfolio, but I think that may be a wise hedge right now.

On China Security & Surveillance (CSR), I just wanted to give a brief impression of the recent transaction involving Whitehorse Technology Ltd., a company owned by its CEO. In the transaction, Whitehorse sold Exchangeable Senior Notes due 2012 to an unnamed third party investor (not affiliated with CSR) for $50 million. The Notes are backed by a pledge of 8,750,000 shares of CSR owned by Whitehorse.

In total, Whitehorse and the CEO, Tu Guo Shen own about 13,800,000 shares of CSR stock, or about 32.8% of the current fully diluted outstanding shares of 42,381,000.

It appears that Cryptologic has weathered the US prohibition on cash transfers related to gambling from October 2006, and earnings have begun to increase on a sequential basis.

The Company reported $0.19 per share earnings in the 3rd quarter vs the average estimate of $0.13 per share, a 46% positive earnings surprise.

Next time you are at a cocktail party and someone starts expounding on efficient markets theories, you can counter with two words that perfectly rebut the efficient markets theory --- momentum investing.

Case in point this morning: Buffalo Wild Wings (BWLD) vs Chipotle Mexican Grills (CMG). I have owned BWLD since August 2006 and I really like the Company and its growth characteristics. Since purchasing the shares in 2006, the Company has provided a wild ride, I have seen the gain in the stock increase to 150%, drop to 74%, increase to 100%, drop to 40% -- but I remain unfazed.

Well I have had quite a ride so far with China Security (CSCT.OB). I bought the shares at an average price of $17.68 per share back in July and August. In the past 3 months the shares have nearly doubled to $30.

When I wrote-up my investment thesis on the Company, I indicated that one of the investment catalysts that was forthcoming was movement to a larger exchange. On Monday that will become reality when the Company moves to the NYSE under the symbol CSR. This is great news for the Company as many institutional investors will now be able to look at the Company.

It is always nice when management thinks like owners. While earnings have been flat at CEC for a couple of quarters, yesterday management announced a large scale recapitalization to buyback a significant amount of the outstanding shares.

With less than a 1:1 debt to equity ratio and only 1.2x Debt to EBITDA ratio, the company has the ability to utilize debt to significantly reduce the share base outstanding and enhance shareholder value for the remaining owners. Yesterday they increased their share buyback by $200 million to a total remaining of $346 million. This represents about 40% of the outstanding shares.

This is the time to put your stocks away in a drawer and forget about them. If you have done your homework on your holdings, then you should be confident about the company and its prospects. Don't get sucked into the negative mood and make rash selling decisions.

-- Consumer Services
-- Internet
-- The emergence of China as the new "consumer superpower"
-- Gambling

To recap the opportunity (see initial writeup), the company is a Chinese security company focused on the video surveillence industry. They are a leading player in China in an industry segment that the government is requiring capital spending of companies and local governments -- to add video surveillance to curb the threat of terrorism.

Clearly the company was having a great run. Management was making the right moves and growth was outstanding. Earlier this week, the company released earnings that were in line with analyst expectations of $0.22 per share. While they met expectations, they did not exceed them as they had the previous 3 quarters.

The Street did not like this and Mr. Market took the stock down by about 20%. A couple analysts downgraded the stock primarily because of same store sales. On the surface same store sales looked excellent at an 8% increase. However, that also included an overall price increase of about 6%, so the net amount of growth was 2% and analysts did not like this slower growth rate.