• Aluminum Corp of China ADS (NYSE: ACH)
• China Life Insurance ADS (NYSE: LFC)
• China Med Technologies Inc. (NASDAQ: CMED)
• China Mobile Limited (NYSE: CHL)
• Huaneng Power Intl ADS (NYSE: HNP)
• PetroChina Co Ltd ADR (NYSE: PTR)

• East West Bancorp (NASDAQ: EWBC)
• Honeywell Intl (NYSE: HON)
• International Business Machines (NASDAQ: IBM)
• Johnson and Johnson (NYSE: JNJ)
• Johnson Controls (NYSE: JCI)
• United Technologies (NYSE: UTX)

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of ACH, HNP, JNJ, PTR.

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Last year, my best Chasing Value recommendation was Aluminum Corp of China ADS (NYSE: ACH), which sailed from $22 per share to a 52-week high of $90.95. I will take credit for finding a winner, but I cannot in all honesty say that I thought it would more than quadruple -- that part was luck. (The original story was Chasing Value: Aluminum Corporation of China ADS, which I still think is worth a read today.)

If you acquired what is often referred to as Chalco (China Alum. Co.) anywhere near the time I recommended it and still own it you are probably still very content with only perhaps a 90% gain as the stock has come down some, closing last Friday May 9 at $40.98

Another of my recommendations was General Dynamics Corp (NYSE: GD), which closed Friday at $90.92. This one is only up a few percentage points from my starting point of $88 per share, but you will note, curiously, that it is only 3 cents off ACH's high. Given the market's bad year, a gain when the market is losing is a bigger plus than the casual observer would perceive. The defense sector has provided the anticipated market defense as I discussed.

The reason I bring these two stocks to your attention is because I did something I do not often do -- I traded a long-term position. Most readers of my articles know I am a buy-and-hold guy, not a stock trader. However, when ACH hit $88 per share at the same time I was reviewing defense sector stocks, and GD was trading for the same price, I decided that was an unusual event: One pick being at an all-time-high, while the other looked to be a value and a good defensive position for uncertain times.

We sold one-third of our long-term ACH position, capturing all of the original investment and a healthy profit, and bought some General Dynamics for the same price with the "house money" protecting us against giving it all back. This worked out perfectly, and now we have two strong companies going forward and collecting dividends. I think both of these stocks belong on your watch list.

Even us old curmugeons can learn from our mistakes. I did not want to give it all back like I did in 2001.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of ACH and GD.

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The new earnings seasons kicks off tomorrow after the market closes when Alcoa Inc. (NYSE: AA) is scheduled to report first-quarter results.

Pittsburgh-based Alcoa has missed earnings estimates in only one quarter out of the past five. When the leading aluminum producer reported fourth-quarter results back in December, earnings of 36 cents per share beat the consensus of analysts surveyed by Thomson Financial by three cents, but were down from 74 cents per share in the same quarter of 2006. For this current quarter, analysts expect earnings of 50 cents per share.

Alcoa's full-year 2007 earnings per share of $2.60 missed estimates of $2.83, and were down from $2.96 for 2006. However, Alcoa also reported record revenue of $30.7 billion, as well as record income from continuing operations.

In March, Alcoa announced a quarterly common stock dividend of 17 cents per share, continuing a more than 60 year streak of quarterly dividends. In other recent news, former Merrill Lynch (NYSE: MER) CEO Stan O'Neal joined Alcoa's board of directors in January. Alcoa joined rival Aluminum Corp. of China (NYSE: ACH) in acquiring a stake in Rio Tinto (NYSE: RTP). And a lawsuit against Alcoa by the government of Bahrain was suspended by the U.S. Justice Department, which is conducting its own bribery investigation.

Alcoa's forecast earnings per share growth for the year is 9.85%, which is better than the industry average and the S&P 500. The consensus recommendation from analysts is to buy Alcoa, and has been for at least 90 days. The share price has been climbing from the 52-week low of $26.69 in January, and closed at $39.00 on Friday.

BloggingStocks contributor Sheldon Liber took a good look at Alcoa's prospects back in February. For other news that could influence Alcoa's results, see BloggingStocks' Alcoa coverage.

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In one of my recent posts on stock pricing, I received a comment from one of our more acerbic readers, who asks some good questions once he simmers down. He wonders why investors have not bid up the share price of Alcoa Inc. (NYSE: AA):

• "How come nobody has the hots for ALCOA? It is very cheap. . . There is mining stock merger-mania yet nobody is buying ALCOA in anticipation of it occurring to ALCOA as well. Are we gonna wait until it is too late?"
  

First of all, I should remind everyone that the price of a stock on any given day is a myth. It is worse than a myth, it is just a fleeting moment in time. I would call it semi-arbitrary most of the time.

Alcoa closed yesterday at $34.06, having a trailing P/E ratio of 11.5. That falls between its 52 week low of $26.69 and its high of $48.77. Also worthy of note, Alcoa has a yield of 2% which is about 10% higher than your average S&P stock. This seems positive.

Perhaps my friend is on to something. Alcoa is off its high considerably and has a lower P/E and higher yield then any of the indices. But its ROE of 15 and ROIC of 11 are all too average, not exceptional -- and these are important considerations. The P/B of 1.89 also seems average but the P/S of 1.03 looks very appealing.

An investment in a stock is based on future earnings and the metrics that we use to anticipate them. In examining Aloca prospects for this year I found that analysts believe 2008 earnings will be less than they were in 2006 and perhaps the same as last year. Speculation about 2009 is higher, but it is speculation.

It seems that in making a bid for Alcan last year and buying a portion of Rio Tinto plc ADS (NYSE: RTP) this year, Alcoa is trying to buy its way into some growth because on its own it is having difficulty finding any. That is not to say that the company is not valuable, but the value is very well established. Hopes for a rally may rely on the futures price of aluminum more than expanded operations.

In comparing Alcoa, which I have considered buying periodically, to one of my favorites, the Aluminum Company of China (NYSE: ACH) (often referred to as Chalco), I found it wanting. ACH has a lower P/E of 10 and higher yield by 10% of 2.2%, a P/S of 0.35, an ROE or 30 and a ROIC of 21 and better growth prospects in the largest new market, China.

As I remind investors, AA and ACH share prices are based on future prospects and ACH wins that discussion very easily. Given that the P/S is less than half and the ROE and ROIC are double that of Alcoa, there is no contest. Alcoa knows this all too well and has actually teamed up with Chalco in acquiring a portion of Rio Tinto and helping them hold off hostile bidders BHP Billiton Ltd ADR (NYSE: BHP).

If I were to guess how Alcoa (the stock) does this year, I think it just keeps on coasting along with the price of aluminum until some new catalyst triggers some buying. That could be a major merger or acquisition, a buyout, a huge increase in the demand side if construction spending in North America picks up, or entering a new related business with better growth prospects.

All said, Alcoa should be on your watch list because even without a major catalyst it is still building equity, just slower than others, and if the price stays depressed at current levels, by next fall it could very well be a steal and you will get to it first.

Sheldon Liber is the CEO of a small private investment company and the design and research principal for an architecture & planning firm. To find potential opportunities and verify his track record, read Chasing Value or Serious Money. Disclosure: I own shares of ACH.

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One of our readers commented recently that I had earned his respect because I always tracked and posted my bad picks not just the good picks. I have been told this often but it is not so uncommon in better publications. Barron's weekly and Fortune Magazine both do the same. It's only fair, and should be standard operating procedure. I have not seen James Cramer do it but then he makes thousands of recommendations so how can he track anything?

I also think that in a blog you have the opportunity to establish a dialogue with readers and might even learn something. I have learned plenty from readers and colleagues alike. So having exposed some of my failings in the past month I thought I would look back and and review some of my successful picks.

When I posted Chasing value: Aluminum Corporation of China ADS eleven months ago in March, ACH was $22.98. It closed yesterday at $39.03 for a 70% gain. It had reached a 52-week high of $90.95 in between. We took some money off the table at $88 and are now playing with the 'house money'. This one has worked out great.

One of my stock alerts was triggered last February when Anadarko Petroleum hit $42 and I posted Anadarko Petroleum - hmmm, getting interesting followed by Chasing value: Anadarko Petroleum - got it! when I actually let it be known I had purchased it in several portfolios at $40. APC has been as high as $68 but closed yesterday at $55.10. We have not sold any but this still made for a nice 38% gain.

Check out the original stories. Both of the stocks belong on your watch list for sure. I think that APC may still be a value today with a trailing P/E of 7.23, and net profit margins of 24% and the same ROE. It is trading higher today. ACH is a little pricier so I might not jump in today. However, I remember saying that before and watching it shoot up to $90 shortly thereafter. Once you're into either of these companies, they should continue to be rewarding for many years. Both pay dividends.

Sheldon Liber is the CEO of a small private investment company and the design and research principal for an architecture & planning firm. To find potential opportunities and verify my track record read Chasing Value or Serious Money. Disclosure: I do own shares of ACH and APC.

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I have wriiten so much about Huaneng Power International ADR (NYSE: HNP) that I am not sure there is much more to say. This is another one in my must-own category, so it is just a matter of when you get in. Most of my sentiments can be found in Volatile Markets: Huaneng Power (HNP) is my pick for the next 50 years.

HNP pays a sizable 3.6% dividend yield and has plenty of room to run. It has come down a lot with the rest of the inflated Chinese stock market, but this one is not threatened by competition and is a good long-term value. It is the largest utility company in China, entrenched in government projects and receives support that would be full of conflicts of interest in a western economy.

I have made the case recently that electric utilities have been great investments over the long term in Serious Money: Electric utilities are the place to be, and I am still a believer. China's growth curve will continue to dwarf that of the United States. It takes electricity for all the things you know about and many you do not. I am not sure that the average investor is aware for example that the production of aluminum consumes a lot of electricity. And it is being used in increasing amounts as reducing energy costs often means reducing weight.

Aluminum is used in windows, cars, planes, electronics, and this is a great trend to follow as well. One of my top picks last year was Aluminum Corp of China ADS (NYSE: ACH), and I would have included it here if not for its sky-high price.

The largest potential downside to HNP might be costs associated with environmental clean-up. Somehow I tend to think the expenses will be broadly diverted to all industries paying for it. China is addressing these issues, but has a long way to go.

HNP is increasing equity every day. We have all read lately that the Chinese stock market might be ready to bust, and it has been tamed plenty in the last two months, but if it does, I will probably ride it out long term with this particular stock. It is beyond my imagination how it cannot be a success in the long term.

Among the many Chinese stocks one might consider, Huaneng Power is likely to be less volatile and is currently the only Chinese stock we would put new money in.

To find potential opportunities and verify my track record, read Chasing Value and Serious Money.

DISCLOSURE: I currently own shares of HNP.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm.

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To quote one of my college professors (with thick Chicago accent) "Ya pays yer nickle 'n ya takes ya bes' shot." This year I wrote over 200 stories and reviewed even more stocks. Going over all of this material I came up with the ones listed here as my four best and four worst of the year.

• Dow Jones Industrial Average: 12,501.52 is Up to 13,359.61 (+6.86%)
• NASDAQ Composite Index: 2,425.57 is Up to 2,676.79 (+10.36%)
• Standard & Poor's 500 Index: 1,424.73 is Up to 1,476.37 (+3.62%)

The worst stocks were primarily in the financial sector, and I stepped in it with both feet.

• Not only did I have too much faith in the managers, but I went as far as to post the dubious title of "once in a lifetime" in the case of IndyMac Bancorp (NYSE: IMB). Not one to hide from my mistakes, one of my kids reminded me that the title is still fitting, just not as I meant it -- I get it everywhere -- there is no escaping my blunder. Chasing Value: IndyMac Bancorp - once in a lifetime in May recommended IMB at $30.09. IMB closed Thursday at $6.35 for a 78.9% loss. Adding the yield of 6.3% reduces the loss to -72.6%.

• A mistake in judgment made by many was the support of Washington Mutual - WaMu (NYSE: WM) that I had mentioned many times as a safe haven. While many on Wall Street find safety in numbers, I do not. It's my mistake -- I own it just the same in a group or by myself -- it's my money! I do not get to pass the hat around the Street and have no boss to answer too. Chasing Value: Washington Mutual - WaMu recommended WaMu at $39.00 in April. WM closed Thursday at $13.54 for a 65.3% loss. Adding the yield of 4.5% reduces the loss to -63.8%.

• The folks at Bear Stearns (NYSE: BSC) should feel very, very badly about their stupid trades in various CDOs and hedge funds. They are supposed to be the "smart money" on The Street and not make these type of mistakes. I was not very smart for believing that, and took the hit in our newest portfolio. Chasing Value: Bear Stearns - cheap and growing in April recommended BSC at $148.00. Shares of Bear Stearns closed Thursday at $88.25 for a 40.4% loss. Adding the yield of 1.8% reduces the loss to -38.6%.

• Bank Popular (NYSE: BPOP) turned out to be very UN-popular with investors. Although this one has taken a big hit and it does have some of the questionable types of loans on its books, it also fell with the sector and may be worth more than the stock price would indicate. Chasing Value: Bank Popular (BPOP) should be very popular in June recommended BPOP at $17.00. Shares closed Thursday at $10.58, for a 37.8% loss. Adding the yield of 5.5% reduces the loss to -32.3%.

There were a few other bad picks, but those will be highlighted elsewhere. My good calls have exceeded the bad by almost 2:1 this year and you can check it out for yourself, or find potential opportunities and verify my track record in the Chasing Value or Serious Money sections.

Happy New Year & Best of Luck in 2008!

DISCLOSURE: At the time of this post I owned or control shares of all eight of these stocks -- I eat my own cooking.

Sheldon Liber is the CEO of a small private investment company and the design and research principal for an architecture & planning firm. Check out his other posts for BloggingStocks here.

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You all can worry about whatever you want to worry about. You can follow the bulls or bears, day traders or CD holders, Wall Street pundits or the guy next door, it does not matter to me. I am looking for opportunity in the rubble.

If you are a true investor, you have a watch list -- when there is fear and negativity in the market like there has been the past few days, there will be opportunities. It is not a time to jump in with both feet, and it is not a time to speculate. It is a time to pick and choose among the companies and stocks you know well.

I would like to own more Intuitive Surgical (NASDAQ: ISRG) but it has run up so fast it has escaped my grasp, although I sense an opportunity is in the wings. I would like to own more Anglo American PLC (NYSE: AAUK) but it jumped up after recent acquisition talks in the mining industry and has not settled down yet. And it may not, but I will be patient. My regular readers know I love Huaneng Power Intl ADS (NYSE: HNP), which hardly moved today but has come down significantly in the past week, and that is very, very tempting.

Others on my watch list include:

• Aluminum Corp of China ADS (NYSE: ACH)
• General Dynamics (NYSE: GD)
• Johnson & Johnson (NYSE: JNJ)
• Nucor Corp. (NYSE: NUE)
• Reliance Steel and Aluminum (NYSE: RS)
• Valero Energy (NYSE: VLO)

These represent just a handful on my list, and I have written about all of them. There are many more I'm watching -- most of these are in defense, health, commodities or energy. There will be opportunities in the financial sector and housing too, but not until they come clean, and so far it seems they are only releasing information sparingly when they have no other choice.

It is not my intention to make light of a difficult market, or those of you that are getting queasy stomachs right now. I just want to make two points in closing. Both points I have made numerous times before and will again in the future.

First, if the current volatility of the market has you worried, and you fear the worst, you must adjust your portfolio until you are comfortable -- in the future do not let it get out of proportion to your level of tolerance.

The second point, and one that has allowed the most successful investors to make big money, is to buy when there is fear in the market, and only buy strong companies with solid balance sheets, that have experienced managements demonstrating a high level of integrity.

To find potential opportunities and verify my track record, read Chasing Value or Serious Money.

DISCLOSURE: I own shares of ACH, AAUK, GD, JNJ, HNP, ISRG, VLO (NUE I do not own.....yet)

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm.

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Aluminum Corp. of China Ltd. (NYSE: ACH) stock is slumping today as aluminum futures are off by more than 2% as are other industrial metals like copper. Investors may also be locking in their gains after Friday's big positive move. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on ACH

The stock has been climbing steadily all year, hitting a one-year high of $76.99 on Friday. This morning, ACH opened at $74.00. So far today the stock has hit a low of $72.78 and a high of $75.33. As of 11:00, ACH is trading at $74.92, down $1.93 (-2.5%). The chart for ACH looks bullish but slightly deteriorating, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bearish hedged play on this stock, I would consider an October bear-call credit spread above the $85 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverages nice returns. For this particular trade, we will make a 6.4% return in 2 weeks as long as ACH is below $85 at October expiration. Chalco would have to rise by more than 33% before we would start to lose money. The stock has never been above $77 and would have to jump by over 14% in less than two weeks to cause a problem.

Brent Archer is an options analyst and writer at Investors Observer. DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in ACH.

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Today Alcoa Inc. (NYSE: AA) announced some restructuring plans that will trim down (SELL) some under-performing consumer packaging and automotive castings divisions. It will be taking some charges to the tune of $845 million as well, and intends to gear up for expansion into higher margin areas. Alcoa also said it raised cash by selling its 7% stake in Chalco, the Aluminum Corp China ADS (NYSE: ACH) and bringing in $2 billion dollars on what was initially a $200 million investment -- "A ten bagger."

It is this latter decision that is not smart, and without further explanation from management I have to question selling a winner. If you look at all of the things that Alcoa did in the last 10 years you will find that the Chalco investment was the smartest, and more importantly, the most profitable, thing it has done. For many years Alcoa stock has been adrift. Since it sold the stock it has only gone up further and as I write these words and look at the price now, ACH is trading up over 5% more to $75.70.

Since I first reported earlier in the year on ACH it is up over 300%, but even after the initial story buying in the low $20's I followed up with Chasing Value: Aluminum Co. of China driving me nuts. This is one of my best picks ever and although I know it will likely get trimmed down some when the fervor ends, I'm not selling. This is a long term hold. If Alcoa has other plans to participate in the Chinese aluminum market and compete with Chalco, I would like to know what they are because I do not see how it can match its growth with anything it is planning. As a matter of fact, since it got in before I did and knew more about the company, from the inside, than any of us, it should have been buying more. That would have helped the bottom line immensely.

I am coming to think there are times when some companies should operate more like Berkshire Hathaway (NYSE: BRK.A) and make these type of outside investments when they see such potential profits. Most investors do not care how they make an honest dollar and many do not even care about that. Therefore, while I think Alcoa is to be applauded for active pursuit of self improvement, I think selling ACH will prove to be a bad move.

To find potential opportunities and verify my track record read Chasing Value or Serious Money.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He is on the advisory board of Internet start-up CircleBuilder.com.

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I think you all have gone mad if you are buying stocks today just because the market is moving up, or you are planning on federal rate cuts yet to be announced, or Hilary Kramer or James Cramer said so, or you are afraid the train is leaving the station without you, or your stock broker or palm reader has become bullish. There is only one reason to buy stocks and that is to make money and secure your future for the long run. To do that you need to have solid reasons that can be accounted for and demonstrated to have a high degree of probablity. I did not see that today.

A friend of mine asked me today whether they should sell their shares of Google Inc. (NASDAQ: GOOG) and take profits after it's recent runnup. I told them I had no idea whether to buy, sell or hold. There was no concrete data that has been released since it's last quarterly report (after which it dropped by $50 in one day) so to me it is all wild speculation. If you believe that the rate cuts are good for the overall market which includes Google then perhaps you can hang your hat on that -- I won't be.

I have been touting Huaneng Power ADS (NYSE: HNP) for a long time and those that paid heed to my comments made a ton of money with me, but even though I love this stock I am not promoting it today after it's 45% jump in the last six weeks Volatile Market picks: Huaneng Power (HNP) is my pick for the next 50 years. I like to buy on dips as I wrote when it was down 20% off its high not when it is screaming forward to new highs. I think patience is in order.

I think Apple Inc. (NASDAQ: AAPL), Valero Energy (NYSE: VLO), Aluminum Company of China (NYSE: ACH), and Intuitive Surgical (NASDAQ: ISRG) are all unbelievable stocks but all of them have been on fire for quite some time. My last buy recommendation among this group was ACH at $22 per share and it closed at $73.90 today. I have made 236% in six months and I am telling you this is nuts!!! I would love to buy some more but only when there is value not just momentum.

My last word of caution which is a historical fact, not just a popular saying: Those that play with fire will get burned. I think the market is getting a touch giddy. One reader with similar thoughts responding to Hilary Kramer's pumping Google today quipped tongue-in-cheek that "Trees do grow to the sky". I know there are those that will tell me "your supposed to buy on the rumor and sell on the fact". My response is that there are stocks that are values in today's market but most are not, and it is a big mistake to run into a mob!

Disclosure: I own ACH, HNP, ISRG and VLO.

To find potential opportunities and verify my track record read Chasing Value or Serious Money.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He is on the advisory board of internet start-up CircleBuilder.com.

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This is the fourth update on the stock price status of the first seventeen Chasing Value companies. Closing prices are from September 14, 2007.

The first quarter produced amazing results but the second quarter was downright sad. No one will be surprised to see that anything touching constuction or finance took a bath. I own most of these stocks, so if you do too, I feel your pain. Anyone considering my commentary should "do their homework" too, as James Cramer says on his Mad Money TV show. These recommendations are from the first and second quarter 2007 and I have linked to the original stories.

February 16, 2007: Chasing value: Wells Fargo: Wells Fargo & Company (NYSE: WFC) closed at $35.66 down from $35.76: a loss of -0.02%, even money.

February 23, 2007: Chasing value: Anadarko Petroleum - got it! Anadarko Petroleum Company (NYSE: APC) closed at $50.58 up from $40.84: A gain of 23.85%.

March 3, 2007: Chasing value: Aluminum Corporation of China ADS: Aluminum Corp. of China (ADS) (NYSE: ACH) closed at $60.95 up from $22.98: A gain of 165%

March 20, 2007: Chasing Value: Anglo American - Inflation hedge & more: Anglo American plc (NASDAQ: AAUK) closed at $28.90 up from $24.65: A gain of 17.24%

March 23, 2007 Chasing Value: Cemex and LaFarge look solid: CEMEX S.A. B de C.V. (ADR) (NYSE: CX) closed at $29.17 down from $34.92: A loss of -16.47%. LaFarge (ADS) (NYSE: LR) closed at $37.80 from $39.02: A loss of -3%.

Cemex sank with the continuous reports of the deteriorating housing market in the United States. In the meantime it continues to move forward with the integration of Rinker, the largest supplier of construction materials in Australia. This makes Cemex the largest in the world and sets the stage for continued growth in Southeast Asia. It also is continuing to focus on reducing debt.

Of all the stocks I have written about in the Chasing Value section, I feel that this one suffered the most from guilt by association. I believe it was fairly valued before and it is on sale now. This company, with it's PEG ratio at .83 and lowered, P/E, P/S, P/B (SEE: AOL Money & Finance) has a ROE over 22 and pays about a 2% dividend yield.

April 6, 2007: Chasing Value: Johnson & Johnson (NYSE: JNJ) closed at $63.20 up from $61.25: A gain of 3.18%

April 11, 2007: Chasing Value: Duke Energy (NYSE: DUK) closed at $18.66 down from $19.00: A loss of -.018%, even money.

April 11, 2007: Chasing Value: Washington Mutual - WaMu (NYSE: WM) closed at $35.53 down from $39.00: A loss of -8.9%

April 17, 2007: Chasing Value: Bear Stearns - cheap and growing (NYSE: BSC) closed at $117.19 down from $148.00: A loss of -20.82%

April 18, 2007: Chasing Value: InfoUSA: Low share price for the kids (NASDAQ: IUSA) closed at $9.56 down from $10.53: A loss of -8.93%

May 1, 2007: Chasing Value: IndyMac Bancorp - once in a lifetime (NYSE: IMB) closed at $22.95 down from $30.09: A loss of -23.73%

May 29, 2007: Chasing Value: USG -- A bargain, plain and simple! (NYSE: USG) closed at $36.37 down from $52.00: A loss of -29.42%

June 7, 2007: Chasing Value: Quest Diagnostics Inc. (NYSE: DGX) closed at $55.53 up from $50.83: A gain of 9.25%

June 11, 2007: Chasing Value: Berkshire Hathaway -- the time is now (NYSE: BRK.B) closed at $3,995.95 up from $3,612: A gain of 10.36%

June 12, 2007: Chasing Value: Tata Motors LTD - patience, patience, GOT IT! (NYSE: TTM) closed at $17.02 up from $16.00: A gain of 6%

June 19, 2007: Chasing Value: Bank Popular (BPOP) should be very popular (NYSE: BPOP) closed at $12.03 down from $17.00: A loss of -29.24%

Well, if you bought into my first quarter picks, you would be putting me on a pedestal and if you bought into my second quarter picks, you would be knocking it down. However, If you were to have acquired equal dollar amounts of all seventeen stocks, you would be up 5.55% plus dividends. The S&P 500 was up about 3.5% through September 4, 2007 plus dividends. In my last update the "scoreboard" was quite amazing and I wrote that someday I might have to eat humble pie. Through June that is the case because I expected to have done much better.

The question now is whether the financials have absorbed too much fear and pessimism overshooting the mark to the low side, or if the fear is justified and there is a lot of bad news that has not yet surfaced.

My own feeling is that all the bad news, and then some is priced into these stocks. Interest rates will stay flat or go down over the next few months easing some of the pressure on many of my picks and the overall market. Many of these companies will improve as many of their competitors disappear. For the most part it's clear I was too optimistic about the strength of these institutions and got in way too early.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He is on the advisory board of Internet start-up CircleBuilder.com.

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It just keeps rolling along. "China Inc." keeps beating it's own trade records. It posted a trade surplus of $24.97 billion for August, up from $18.8 billion a year earlier, the customs administration said today, according to CNBC. That's not all, China just passed Canada as our number one trading partner, which although not unexpected, is just another example of the export steam roller that shows no signs of slowing down. All this despite numerous product safety recalls.

We are buying Chinese products at an ever increasing rate. It should also be noted that they are buying our goods and services at an ever increasing rate too. The problem is that they are getting the better end of the deal for now and the gap between imports and exports is increasing. When I wrote Stop blaming China - partners win, whiners lose, I addressed some of these issues, and readers added many more. Some categorized the situation as a Chinese trade war but I take exception to this. I think we are facing very strong Chinese competition and the question is are we prepared?

Our trade deficit is only part of the problem. While China is creaming us with very low labor rates and worse environmental, safety, and legal (piracy) issues, all of which need to improve to level the playing field, there are other issues that we should fear more. That is our failure to compete in producing math, science, and engineering graduates or even having a plan to stimulate improving our graduate rates in these areas. If we do not remain strong in these areas we will be exporting more and more engineering jobs, and worse, the things China imports now might slow down drastically. Many of the things China manufactures now are designed and engineered in the United States. Nothing guarantees this situation will remain as is. It is all very fluid and will become more so. We face the same dilemma with regards to India and eastern Europe.

One statistic that I would like to see discussed more, is the raw numbers showing the balance between our productivity and our consumption as a nation. We hear about the Gross National Product (GNP) all the time but what about "Gross National Consumption?"

One of the other issues that struck a chord with me was a comment that people like me, as an investor, are not feeling the pain of the average working person who is not able to take advantage of investing overseas. In general this is correct. Like other investors, I am benefiting from foreign investments. This is a very good way to share in the growing prosperity in China and elsewhere. The only thing I can suggest in this regard is to add an international stock mutual fund that allows small periodic investments on a regular basis. The problem for those of lesser means is not that they lack opportunity but that they lack the knowledge about how to help themselves. This too gets back to education.

Three individual stocks I have discussed on bloggingstocks.com that we own in several portfolios should all be on your watch list and have done very well over the last year.

• Aluminum Corp of China ADS (NYSE: ACH) see Aluminum Company of China -- laughing my head off!, Twelve months ago ACH was $17. It closed yesterday at $60.78 for a 257.53% gain.
• Huaneng Power Intl ADS (NYSE: HNP) see Volatile Markets: Huaneng Power (HNP) is my pick for the next 50 years, Twelve months ago HNP was $27. It closed yesterday at $43.10 for a 59.63% gain.
• PetroChina Co Ltd ADR (NYSE: PTR) see PetroChina: Not a bargain, but one to watch for 2007. Twelve months ago PTR was $105. It closed yesterday at $143.01 for a 36.2% gain.

The returns from these investments did very well by a wide margin over the increases in China's trade activity. Unless something unforseen happens I expect this trend to continue and these three stocks to appreciate faster than the overall Chinese or U.S. economies or stock markets will in the long run.

To find more potential opportunities and verify my track record read Chasing Value or Serious Money.

[Photo Allan Siew]

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He is on the advisory board of Internet start-up CircleBuilder.com.

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Aluminum Corp of China (NYSE: ACH) volume & volatility spikes on wide price swings. ACH is engaged in bauxite mining, alumina refining and aluminum smelting. ACH is recently up $10.73 to $64.81. ACH closed at $37.04 on 8/16/07. ACH call option volume of 6,490 contracts compares to put volume of 4,671 contracts. ACH September option implied volatility of 88 is above its 26-week average of 47 according to Track Data, suggesting larger price risk.

Open Text (NASDAQ: OTEX) volatility Elevated at 80 into 8/30 EPS & Outlook. OTEX develops, markets, sells, and supports enterprise content management solutions. OTEX is recently down $0.29 to $19.98. OTEX will report EPS on August 30th. Canaccord Adams says: :We maintain our Hold recommendation and U.S. $18 target based on our Discounted Cash Flow analysis." OTEX September option implied volatility of 80 is above its 26-week average of 50 according to Track Data, suggesting larger risk.

Corus (NASDAQ: CORS) volatility elevated on exposure to commercial real estate. CORS is an active commercial real estate lender nationwide, specializing in condominium, hotel, office and apartment loans. CORS had outstanding commercial real estate loans and construction commitments of $8 billion as of 6/30/07. CORS over all option implied volatility of 60 is above its 26-week average of 49 according to Track Data, suggesting larger risk.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

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The stock market has stabilized somewhat in recent days, but I still have a very pessimistic outlook for stocks, as I explain in this video. I think stocks could fall another 25%.

I am deeply worried about the financials, like mortgage company Countrywide Financial Corporation (NYSE: CFC) and high-end consumer stocks like Nordstrom, Inc. (NYSE: JWN).

Nonetheless, I think there are opportunities in some niche plays. I advise investors with cash to put in the market to take a look at electric utility Pinnacle West Capital Corporation (NYSE: PNW), ballbearing company Kaydon Corporation (NYSE: KDN), and bridge builder Chicago Bridge & Iron Company N.V (NYSE: CBI).

Internationally, I suggest looking to China plays like Aluminum Corp. of China Limited (ADR) (NYSE: ACH) and global environmental plays like Veolia Environment (ADR) (NYSE: VE). Finally, I offer a stock tip: Darling International Inc. (ASE: DAR) is a little-known environmental company which gets paid to collect waste like animal by-products and cooking grease and turns it into biodeisel which it then sells. Enjoy the video!

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