When it comes to the selection of wind energy stocks, a look at the value chain beyond turbine manufacturers reveals what are, in our opinion, some of the best ways to play this market. With the turbine manufacturers located approximately in the middle of the value chain, we first look downstream to where the demand is coming from.

At the end of each trading week, Hillbent scans the equity market for potential anomalies which exhibit extremely oversold and overbought conditions. Past observations have revealed that such candidates may experience reversal corrections to the upside or downside once the market reconfirms that their fundamentals remain solidly intact or relatively poor. From a contrarian perspective, these lists may also serve as a precursor to changes in institutional sentiment and underlying fundamentals.

(The purpose of this report is not to provide specific recommendations, but instead serve as a time-saving reference tool and starting point for investment ideas as the upcoming trading week unfolds. Of course, the results generated are not always perfect and users are strongly encouraged to perform their own due diligence on these names. Note that overbought and oversold conditions are based upon proprietary algorithms and quantitative models instead of conventional technical analysis indicators. As a supplement to this report, please refer to our ETF Trends Report to determine if market direction trends support a bullish or bearish investment bias over short-term, intermediate, and long-term timeframes.)

I never thought 2009 would be a good year for risky stocks, but my readers asked for them anyway. The market's strong third quarter have paid off for risk-takers who gambled on my 10 Green Energy Gambles for 2009.

I started out the year by providing readers with a portfolio of ten relatively conservative plays on green energy. That portfolio was representative of how I planned to approach the market this year, and has produced stronger returns and less volatility when compared to both green energy stocks and the market as a whole. Many of my readers are looking for big gains on little stocks, so I also provided (but did not endorse) ten such green energy gambles.

I never thought 2009 would be a good year for risky stocks, but my readers asked for them anyway. So far, my risk taking readers have not been burnt too badly, and the portfolio as a whole continues to track its benchmarks.

In my first quarter update for my green energy gambles for 2009, I noted that the portfolio had lost about 10%, between the benchmark returns (-12% and -5%), but not very impressive. Since then, the portfolio as a whole has gained a little ground, and is almost exactly midway between the benchmarks.

The Google of Healthcare: Medco Health (MHS) with CEO David Snow

Bullish Calls:

Panera Bread (PNRA): "I see the restaurants making a come back here... I want to double down Panera… I know that the chart looks bad."

Stocks that have dropped significantly in price and are trading at all time lows provide investors attractive entry points, but some of those stocks could be deceptively “cheap”. Being able to discriminate between the two is a valuable skill for every portfolio manager and stock picker.

In order to identify a good investment opportunity, AFG starts with assessing corporate performance by evaluating the ability of firms to generate Economic Margins above their sector median. Companies with expected improvement in their EMs tend to outperform companies with deteriorating EMs. In addition to corporate performance, AFG evaluates the valuation attractiveness and embedded expectations priced into the market through the Value Expectations interface.

The market has turned around over the past month and bargains are harder to come by than they were in March. In the aggregate, equities are still cheap, but not as cheap as before. Despite some of my bullish writings, I actually have a pessimistic long-term view on the economy. Nevertheless, I do like to pounce when the market overreacts and even if the long-term economic perspective isn’t rosy, it doesn’t mean there aren’t great buys out there. The key is valuation; even if the outlook is bad, if the market believes the outlook is significantly worse than reality might dictate, it can be very wise to buy in.

Over the past couple of months, I have examined several REITs, but as prices in that sector have rebounded significantly, I’ve decided to turn my attentions to the world of structural materials and small-cap manufacturer Hexcel (HXL). Hexcel soared in the commodities bull market of the past summer, peaking above $25 per share. It briefly dipped below $5 in March, before climbing back towards the $9 range. Unfortunately, I was not eying the stock back in March and it would've been an easy buy at that point. All the same, even in $9 or $10 range, it still looks quite attractive, so let's take a closer look.

Intuitive Surgical (ISRG) is an old favorite of momentum hounds. From Q1 of 2003 to Q3 2008, the company was the Joe DiMaggio of Wall Street, beating estimates for 23 straight quarters by pretty whopping margins.

In fact, the streak was probably longer than that, but I don't have access to the data.

This year, I published a list of 10 clean energy stocks I thought people should buy, and, because of readers' requests, also published a list of ten speculative clean energy companies. For the most part, these speculative companies were chosen because they have compelling technology or manufacturing capability, but were not profitable or were only marginally profitable, and they had been beaten up because they would likely all need to raise money this year.

That means that if the financial crisis eases quickly, these companies should be able to raise money on favorable terms. If the crisis continues or worsens (which has so far turned out to be the case) the stocks will continue to fall. This is why they are gambles; as a whole, the portfolio is really a gamble on a quick resolution to the credit crunch.

Note: There will be no recap published on Thursday April 9.

F1Q09 (Qtr End 12/31/08) Earnings Call

February 10, 11:00 am ET

The credit crunch made me reassess my investing strategy last September. First, my expectation of the lack of availability of credit for companies without reliable cash flow led me to sell several early stage and troubled companies.

Second, my experience of attempting to re-orient my portfolio in a hurry convinced me that I simply own too many companies. For the purposes of diversifying company-specific risk, nearly all the benefits can be achieved with as few as 10 companies, if those companies have sufficiently different performance characteristics. In less ideal circumstances, 20-40 companies will usually be sufficient. I currently own shares or have written cash covered puts in/ on approximately 100 companies, ETFs, or closed-end funds. I have closed positions in at least 30 more since September.

The financial fiasco has sidelined climate change and energy as hot topics, but the move to sustainability may do far more to shape our lives. Over time, trillions of dollars are likely to be channeled into solutions. For investors, clean and green offer a triple bottom line: Heal the planet, renew the economy and turn a profit.

Green investing is also a terrific way to damage your own bottom line if you make unwise, or unlucky, decisions. In emerging fields with great futures but skimpy track records, shares tend to climb high on faith and fall hard on despair. Crowds of contenders are brutally winnowed, leaving one or two standing and the rest forgotten.

An opportunistic approach

Bearish calls:

Zoltek (ZOLT): “Can't recommend it, too speculative.”

"The skying is falling....all life on Earth will soon perish....."

That means that it’s the perfect time to load up on some stocks with high-growth potential.  If the world is ending, you might as well take some risks, right?  While we experienced a little bit of a reprieve after the early week rally, don't be surprised if we see cries of doom a few more times before things are all said and done. 

While it was another down day for the Dow Jones Industrial Average, the Nasdaq Composite actually broke a string of 7 down days, and posted a modest gain: The index rose 4.39, or 0.3%, to 1,649.51. The index nonetheless finished the horrific week with a loss of nearly 298 points, or 15.3%. At one point today the index touched as low as 1542.45, stretching the loss for the week to just over 400 points, or nearly 21%. Astonishing.

One interesting development in today’s whipsaw session was the emergence of what appears to be some selective bottom-fishing. Apple (AAPL) was the most obvious example; the stock rebounded $8.06, or 9.1%, to $96.80, aided by some bullish comments from Oppenheimer as well as anticipation of the company’s pending launch of new laptops at an event on Tuesday.

A friend recently asked me how to invest in the Pickens Plan.  I named a stock (see below).

He then surprised me by saying "You are the fifth person I've asked, and no one else knew how.  Several said it could not be done."