David Sharek

Now that the dust has settled from the Stock Market collapse of 2008, I wanted to take a hypothetical view of what our accounts would have done had we not done anything.

2009 has been the craziest market to work in. On the surface the S&P 500 was up 1%, but at the lows in March the market was down 26% and everyone braced for a move lower.

Bullishness is as high as its been since early 2000, and I think we should remain cautious. I think investors have gotten giddy and swallowed a lot of risk lately.

Here is my ranking of the best of the Magnificent Eight, a list I keep up with daily. I wait for a market correction to buy some of these stocks on dips.

hrough the first three months of 2009 we beat the stock market by 12%. We outperformed with big positions in healthcare, education and food — along with a good portion of cash.

I need to protect our portfolios from losing money. Dumping our stocks is always an option, but I don’t want to do a wholesale sell and just get whatever the market offers.

I am trying to build us a recession proof portfolio. The stocks at the right are the stocks I think can weather the storm and make us money in 2009.

This year I am focusing our efforts on a smaller number of high quality names. Here are my top selections going into 2009.

This environment posses many challenges, ones we have to meet by becoming more nimble and owning what the market favors.

It is now clear that if we are to profit in the market, then we must profit from stocks that profit from a weakening economy. I believe the words within this letter hold the keys to our success in 2009.

During these trying times, it is of utmost importance to stay rational with our investment decisions. A panic move could prove to be catastrophic later. I am nervous, as I think most of you are.

The best thing Wall Street has to offer right now are the tech stocks that are tied in to new generation cell phones.