Absolut Must Read Stock Links

This week’s recap starts with Cramer’s less than stellar stock picking performance on Mad Money versus the major market indexes. I mixed in a couple links about the Fed decision on Friday from Bonddad and Bloomberg. Madstocks has a post about interesting stocks that perform better than average when hurricanes start to develop and cause havoc in the Gulf of Mexico. StockBee highlights characteristics of stocks that typically outperform the market after a correction or pullback. I touched on this subject earlier in the week with a short list of my own. I rounded out my weekly top 10 links with posts from solid perennial stock bloggers such as Brett Steenbarger, Roger Nusbaum and Bill Rempel. Enjoy and don’t forget to read them ALL!

• The Cramer Effect and Defect:
  By Bill Alpert via Barrons Online

  “But a comprehensive and careful review of his stock picks by Barron’s finds that his picks haven’t beaten the market. Over the past two years, viewers holding Cramer’s stocks would be up 12% while the Dow rose 22% and the S&P 500 16%, according to a record of 1,300 of the CNBC star’s Buy recommendations compiled by YourMoneyWatch.com, a Website run by a retired stock analyst and loyal Cramer-watcher.”

• Friday’s Markets: via The Bonddad Blog
  

  “Bernanke has continued the the “Greenspan put” tradition. When financial markets screw-up and make a ton of bad loans, the Federal Reserve will bail them out.”

• Fed Cuts Discount Rate to 5.75% to Ease Credit Crunch: via Bloomberg
  

  “Today’s move also shows how Bernanke, like his predecessor, is prepared to temporarily abandon Fed growth forecasts and inflation objectives to offset the risk of a credit crunch. Former Chairman Alan Greenspan was known for his tendency to give financial market conditions a primary role in policy, and he came to the rescue on several occasions when turmoil struck.”

• Mood, Emotion, and Trading: via Brett Steenbarger at TraderFeed
  

  “We have a lot of volatility at the moment, but we have more fear than we have seen in a very long time. As the markets have rallied during the course of the day, the VIX to SDS ratio has remained stubbornly higher, suggesting that the fear component of the VIX may now be the tail wagging the volatility dog.”

• Hurricane Plays: via Madstocks
  

  “I have traded hurricanes many times, this is a list of stocks that made huge moves when a hurricane was present in the Gulf of Mexico:”

• Creating and Managing a Trading Journal: via Toni Hansen
  

  “One of the most common, and least helpful, forms of a trading journal that people use is the spreadsheet. I despise spreadsheets… We are talking a level much higher than simply disliking them. If I ask a client to bring me their trading journal and they show up with a spreadsheet showing things like stock symbol, entry time and price, exit time and price, amount gained or lost and that is all, then I just want to take that spreadsheet and throttle them with it… ”

• Search For Stocks With Fattest Profit Growth: via Pradeep Bonde at Stockbee
  

  “Today Investor’s Business Daily has a piece on stock selection and importance of earnings and earnings acceleration in stock selection process. Market corrections like the one we are currently witnessing are good time to focus on such stocks. These stocks withstand such corrections. Even if they pullback, they do it reluctantly.”

• Financial Sector: via Roger Nusbaum at Random Roger’s Big Picture
  

  “One thing we all need to think about is that at some point the financial sector carnage will end. When it does it will make sense to go heavier into financials… The sector is in trouble, the trouble will end, and once it does makes sense that the more volatile names within will provide leadership. As a general idea increasing volatility at the start of a new cycle and then letting up on that volatility as the cycle matures has been a reliable pattern in the past.”

• From One Perception to Another: via David Kneupper at The dk Report
  

  “So far, this correction has a bizarre, unpredictable quality to it that’s about de-leveraging, illiquidity and other serious matters. However, there’s no evidence that the weakness is about an economy tipping into recession. As a result, it’s worth repeating that remarkable opportunities are being created through the mis-pricing of equities. High quality watchlists will come in handy soon enough.”

• Irony, Possible Bottoms, and Scaling In: via Bill Rempel, a.k.a. NO DooDahs!
  

  “No one is consistently on time, even though it’s a fact that someone always buys right at the bottom or right at the top, because, you know, there was a tick there… I still see nothing to change the thesis that this was a forced-selling panic, and I expect these buys to be profitable before long, probably before most of the demagogues even recognize a bottoming has occurred.”