• Cardinal Health (NYSE: CAH)
• Chevron Corp (NYSE: CVX)
• Exxon Mobil (NYSE: XOM)
• General Dynamics Corp (NYSE: GD)
• Goldman Sachs Group (NYSE: GS)
• JPMorgan Chase (NYSE: JPM)
• Northrop Grumman (NYSE: NOC)
• Pfizer (NYSE: PFE)
• Raytheon Company (NYSE: RTN)

• Automatic Data Processing (NYSE: ADP)
• Adobe Systems (NASDAQ: ADBE)
• Avon Products (NYSE: AVP)
• Black and Decker (NYSE: BDK)
• Cisco Systems (NASDAQ: CSCO)
• Coca-Cola (NYSE: KO)
• Costco Wholesale (NASDAQ: COST)
• Kraft Foods'A' (NYSE: KFT)
• Suntech Power Hldgs ADS (NYSE: STP)

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After five months of tracking my 2008 picks, it is rewarding to finally have a breakthrough -- topping the three major stock indices and Berkshire Hathaway (NYSE: BRK.B) too. It has been painful to have to report each month that I was being bested. However, since I have not seen anything contradicting my original rationale for my eight picks I stood my ground.

This past month saw great improvement. For the first time since I posted the original story Chasing Value: Final list -- 8 stocks for 2008, five of the eight stocks are up:

Moving into positive territory by pennies was Loews Corporation (NYSE: LTR). Among its holdings is a 51% stake in Diamond Offshore Drilling, Inc. (NYSE: DO) that has been doing well as the world remains desperate for more oil and natural gas.

Bunge Limited (NYSE: BG) was the other stock to cross the line into the black, while Valero Energy Corp. (NYSE: VLO), although improving, remains my worst performer. It is still down almost 28% after five months.

The gap between the Dow Jones Industrial Average, Standard & Poor's 500 Index and the technology heavy NASDAQ Composite Index narrowed substantially so that the three are tracking each other very closely. Stocks like Apple, Inc (NASDAQ: AAPL) and Google Inc. (NASDAQ: GOOG) continue to gain significantly and their outlooks have not been shaken amid overall pessimistic economic forecasts.

Most of my picks improved. Last month's three winners stayed on track with continued higher energy and commodity prices along with the war. Raytheon Co. (NYSE: RTN), the high tech defense contractor, Reliance Steel & Aluminum (NYSE: RS) and Anglo American plc (ADR) (NASDAQ: AAUK) do not show any signs of wavering. All three continue to be mentioned in M&A conversations with RTN on the buying side, AAUK on the selling side and RS on both.

In January, I added Newcastle Investment Corp. (NYSE: NCT) and Huaneng Power (NYSE: HNP) to my holdings. In April, as HNP hit new lows, I acquired more stock, happy to collect the 5.6% dividend yield. I did not add anything in May.

Through May, the average return for the eight picks amounted to a loss of -3.36%; a major improvement from last month's -8.96% or March's -15.96% depressing lows. This outperformed the average return of the indices: -5.47%. This year's stalking horse, Berkshire Hathaway (NYSE: BRK.B), while gaining a little during May and still besting all the indices, is down -4% for the first five months. I can't remember the last time I was ahead of 'my pal Warren' -- oooh, maybe I'm learning something!

I am Including dividends for my picks, that averaged an overall 3.91% yield through the first quarter. However, this is being adjusted because of NCT's reduced dividend to 2.99% going forward. Therefore, I will be adding 0.978% for the first three months and 0.249% (2.99% / 12) for each additional month. Through May, the loss was -3.36 + 0.978 + 0.498 = -1.88%. Using 1.8% for the average dividend of the indices times 5/12 adds 0.75%, and reduces the loss to -4.72%.

After five months I have overtaken all of the indices and BRK.B, to my surprise, even without the help of the dividends . BRK.B does not pay a dividend.

I continue to hope that 2008 does not end up being about who loses the least. The following are my eight picks with the starting share price as of December 28, 2007:

• Anglo American plc (ADR) (NASDAQ: AAUK) from $30.79 is Up to $34.28 for a gain of 11.33%.
• Bunge Limited (NYSE: BG) from $119.03 is Up to $119.37 for a gain of 0.29%.
• Huaneng Power International (ADR) (NYSE: HNP) from $41.75 is down to $33.74 for a loss of -19.19%.
• Loews Corporation (NYSE: LTR) from $49.35 is Up to $49.57 for a gain of 0.45%.
• Newcastle Investment Corp. (NYSE: NCT) from $13.08 is down to $9.92 for a loss of -24.16%.
• Raytheon Company (NYSE: RTN) from$61.51 is UP to $63.86 for a gain of +3.82%.
• Reliance Steel & Aluminum (NYSE: RS) from $54.32 is Up to $67.97 for a gain of +25.13%.
• Valero Energy Corporation (NYSE: VLO) from $70.55 is down to $50.84 for a loss of -27.94%.

The Indices:

• Dow Jones Industrial Average: 13,365.87 dropped to 12,638.32 for a loss -5.44%
• NASDAQ Composite Index: 2,674.46 dropped to 2,674.46 for a loss -5.68%
• Standard & Poor's 500 Index: 1,478.49 dropped to 1,400.38 for a loss -5.28%

This year's "stalking horse" Berkshire Hathaway (NYSE: BRK.B) (I am tracking the 'B' shares, not the more expensive 'A' shares) saw its B shares down from $4,685 to $4,498 for a loss of -4.0%.

After our Federal Reserve Chairman Ben Bernanke announced a cut in the discount rate of a quarter point to 2% last month, he changed his stance and intimated it would probably be the last cut. Now we are hearing noise there actually could be a raise in the rate depending on inflation fears. The market seems to believe that story in the long term, but not the short term one.

I still think investors should be looking at the defense sector Chasing Value: General Dynamics & Raytheon: The defense does not rest.

May Recap:

• 2008 picks: -1.88%
• BRK.B: -4.0%
• Major Indices: -4.72%

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 currently own shares of AAUK, BRK.B, HNP, NCT, and VLO.

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I have not decided who I am voting for yet. Or maybe it would be more accurate to say I have decided on multiple occasions only to become undecided again. While some will see me as fickle, or worse, others may be in the same boat.

I am also continuing to think about what difference any of the candidates can make on the economy, and based on these musings, where to invest. My current belief is that none of them will have a profound impact on our economy.

There are no financial wizards among them. Here is the shocker though: I like all three candidates, or at least can find some good in each of them. Each of them is a fighter, and I believe each one of them brings certain skill sets to the job. There are also things about each candidate that are inescapably negative. Clinton has so much baggage, Zsa Zsa Gabor would be jealous. Obama does not have the experience and he has a degree of arrogance (right sweetie); McCain is an old stick-in-the-mud who, as a long-time senator, has spent more hours with lobbyists than almost anybody, though he is pretending otherwise.

Where does this leave me from an investment perspective? My first choice, for stability with moderate growth and dividends, remains the defense sector. I wrote Defense sector rolls over S&P 500 for 8th straight year a while back and I still think that it is the most secure. Here's why:

A) None of the candidates will want to appear soft on defense when we are at war, and all three have made threatening remarks in some country's direction to make sure the electorate knows that.

B) The War in Afghanistan and Iraq rages on, and even the most optimist view is that a draw-down will take years.

C) Even if all war ceased immediately, the upgrading and replenishment of the hardware will cost billions of dollars and most of the defense contractors have that in their backlogs now. Chasing Value: General Dynamics & Raytheon -- The defense does not rest

Mike Huckabee made news by suggesting he would be delighted to pair up with John McCain as his VP running mate. He is another guy that has a real hunger to be heard, but has no interest in a real job. While this may strengthen the party ticket, shoring up conservative support, historically successful candidates move to the center in the general election. Huckabee would lose him as many votes as he would gain.

Nobody is more hungry to be president then Hillary Clinton, who may view this go-around as her one shot at the oval office, since the next occupant could be there eight years if they don't screw up too bad (right Dubya).

Hillary Clinton is doing some big time pandering to stay in the presidential race, and does not look like she has lost any of her fight yet. She seems to be the most polarizing of the three candidates, because there are many that simply do not trust her. Oddly, if this were any other type of race, trust might not be an issue, just success -- and an argument could be made that she might be the most successful. For all her husband's problems in office, the economy was humming and legislation was moving.

There are a growing number of hungry folk -- the continuous rise in food prices has supported one of my thesis from last December Serious Money: ADM, Bunge, Potash Corp. -- it's a hungry world and I expect, like the defense sector this is still a smart place to be investing, although these three stocks are on the pricey side. However, who is to say they have topped out. Archer-Daniels-Midland (NYSE: ADM), Bunge Ltd. (NYSE: BG) and Potash Corp. of Saskatchewan (NYSE: POT) dominate a major portion of he world market in grains, oils and fertilizers.

A) Our sinking dollar makes our prices on the world market more competitive.

B) China, Russia, India, Brazil -- the whole world for that matter have been adding more meat to their diets and that is raising the price of everything. The number of capitalists has doubled!

C) Diets will change in tough economic times, but food will remain a higher priority than most everything else.

Looking beyond the economics of guns and butter for other themes and hearing every day the drum beat that change is afoot, I wonder where else things might remain stable or grow. What comes to mind is power, and I have thought this for quite some time -- Serious Money: Electric utilities are the place to be. I still like the Southeast U.S. and own stock in Duke Energy (NYSE: DUK) and the Southern Company (NYSE: SO) for the long haul.

A) Power companies will be open for business every day of the year and pay solid dividends.

B) Even if housing is down and foreclosures are increasing, someone will own the homes and they will still need the power company.

C) The increase in consumer products requiring power, and the movement toward electric vehicles, will increase demand.

Speaking of a newcomer that seeks power -- Barack Obama promotes himself as the candidate of change. I ask, CHANGE WHAT? Does he think he can become more touchy-feely, like Jimmy Carter, and make nice to everyone? That did not work. He wants to bring us all together, but that's not going to happen. Some folks want to eliminate capital gains taxes and others want to raise them; some want to stop all abortions and others want a women to have a right to choose; and some want health care coverage to be provided by the private sector and others want the government to take over. There will have to be a compromise, but there will be a battle royale to get there.

The Democrats are happy to run against Bush, because even many Republicans would not like to do the Bush economy over again and economics does not seem to be McCain's strong suit anyway. If Obama is the survivor of the political process ("winner" does not seem apt), the biggest surprise will be the economy. Since he is the biggest wild-card, we may see the market go soft, at least in the short term, if he is elected.

One of the most fascinating things about the economy, reported on this site and in business journals, is that the economy often does the best when there is a log jam in Washington and nothing happens. Maybe the economy would improve the fastest if Bush left office and we had a one-year moratorium in Washington and they all just went home. There was a time, a long time ago, when that's how it was.

No matter who wins the election, I think the defense, food and energy sectors will remain strong and the housing sector, airlines, and retail remains weak for a few more years. In this case the past may be a good predictor of the future.

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 in DUK, GD & SO.

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When it comes to defense spending over the last nine years, there has not been any rest. As I have reported on numerous occasions, the defense sector has beaten the market indices year after year. This year is no exception and two of my recommendations remain ahead of the market and are reporting new contracts every day.

Today, theThe Arizona Republic reports [registration required] that General Dynamics (NYSE: GD) is to receive billions in contracts for its C4 Systems as part of the Army's extensive modernization plan. The company is building a communications network for the Army and is the lead contractor with Lockheed Martin (NYSE: LMT) for a wireless network that will deliver mobile connectivity to soldiers on the field.

General Dynamics is up about $10 (12.5%) in the last year and offers a 1.5% dividend yield. Its current P/E is 16.5 and its P/S is 1.33 with a 15% ROIC. It opened today at $90.58.

The Times of Shreveport, La., writes that Raytheon Company (NYSE: RTN) recently acquired S.I. Government Solutions, a small Florida software company that specializes in protecting government and commercial data. The deal is estimated to be worth $35 million. The acquisition is expected to give Raytheon the ability to sell more services to its DOD clients.

Raytheon is up about $7 (12.7%) over the last twelve months and you can add the 1.8% dividend yield to that. It has a P/E of 15 and a P/S of 1.26 and almost a 19% ROIC. Raytheon opened at $62.78.

Everything these companies make is very high-tech but you will not find them mentioned in that investment category -- that will be the subject of another story.

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 GD.

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Harris Corp. (NYSE: HRS) has had a nice run. Over the past five years, the stock price has gone from $14 to $59.

The company is a key player in communications and IT - with about 7,000 engineers and scientists. With the spread of terrorism and the wars in Iraq and Afghanistan, the company's skill sets are certainly "must haves."

But, trends do come to an end (especially in the defense industry). That may be the thinking with the folks at Harris. That is, according to a report in the Wall Street Journal (subscription only), it looks like the company is shopping itself for a potential sale.

I doubt they will have much trouble finding suitors. After all, the sector is full of major operators looking to bulk things up, such as Raytheon (NYSE: RTN), BAE Systems PLC (NASDAQ: BAESY) and Northrop Grumman (NYSE: NOC).

Moreover, the fundamentals still are intact at Harris. According to its Q1 report, revenues increased from $1.07 billion to $1.33 billion. Net income came to $108 million, or $0.78 per share.

So far in today's trading, the shares of Harris are up about 9%.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

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MAJOR PAPERS:

• Harris Corporation (NYSE: HRS), concerned about its future growth, may see limited opportunity and may consider selling itself, the Wall Street Journal reported. If it does decide to sell, suitors could include Raytheon Company (NYSE: RTN), BAE Systems Plc (OTC: BAESY) and Northrop Grumman Corporation (NYSE: NOC).
• The Wall Street Journal reported that, in an attempt to toughen its regulation standards, SEC chairman Christopher Cox said earlier this week the agency would push Wall Street investment houses will have to reduce borrowing and rely less on short-term financing.
• As part of plans to reduce costs and restore profit growth, people close to the situation said that Citigroup Incorporated (NYSE: C) is likely to today identify up to $400B in non-core assets that could be sold. Additionally, the Financial Times reported that Citigroup CEO Vikram Pandit will confirm his pledge to cut the bank's cost base by about 20% at a meeting with analysts today. Sources familiar with the matter believe Pandit will dismiss calls for a break-up of the company.

• According to sources, the New York Post reported that the ax may fall as early as next week on some investment bankers at The Bear Stearns Companies Inc (NYSE: BSC).

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This month saw great improvement after last month's disaster. Having to conclude my findings on a specific month end day, or any day, depending on the news, sometimes distorts results. For example news on March 31 sent the market down and on April first my picks shot up an unusual amount; hopefully the trend will continue.

My riskiest stock pick Newcastle Investment Corp (NYSE: NCT) was down the most in March but recovered about 35% of the loss in April leaving Valero Energy Corp. (NYSE: VLO) the dubious honor of being my worst performer, down over 30% in the first four months of the year.

April showed improvement as many companies reported positive earnings reports or beat expectations.

The Dow Jones Industrial Average gained some ground in April as did the Standard & Poor's 500 Index, and the technology heavy NASDAQ Composite Index was up with stocks like Apple, Inc (NASDAQ: AAPL) and Google Inc. (NASDAQ: GOOG) improving significantly on very strong reports. Google is up over 25%.

Most of my picks improved. Higher food prices no doubt helped Bunge Limited (NYSE: BG) which recaptured losses moving up 23% from its recent bottom. My two winners Raytheon Co. (NYSE: RTN), the high tech defense contractor, and Reliance Steel & Aluminum (NYSE: RS) were joined by a third, Anglo American plc (ADR) (NASDAQ: AAUK) which had a 10% swing entering positive territory.

Even though it has been a tough year for most of my stock picks I have not changed perspective and my original rationale for my eight picks remains, with the exception of Valero based on its outlook. I do not change my mind based on price but on facts, and that is why though others are down it is only VLO that I am re-examining. See Chasing Value: Final list -- 8 stocks for 2008 for the original story.

In January, I added Newcastle Investment Corp. (NYSE: NCT) and Huaneng Power (NYSE:HNP) to our holdings. I made no additions in February or March among these stocks. In April as HNP hit new lows we acquired more stock. This is a long term position and we are prepared to ride the 5.6% yield as long as it is there for the taking.

Through April the average return for my eight picks was a loss of -8.96%; a welcome improvement from last months sad -15.96% showing. This under-performed the average return of the indices: -6.71%. This years stalking horse, Berkshire Hathaway (NYSE: BRK.B), sagged a little more during the month, still besting both my average and overall indices average. However, the DJIA is slightly ahead of 'my pal Warren' so far this year -- oooh!

Including dividends for my picks, they averaged 3.91% yield though the first quarter. However that must be adjusted because of NCT's reduced dividend, so I have adjusted to 2.99% going forward. Therefore I will be an adding .978% for the first 3 months and .249% (2.99% / 12) for each additional month. Through April the loss was -8.96 + .978 + . 249 = -7.73%. Using 1.8% for the average dividend of the indices divided by 3 adds 0.6%, and reduces the loss to -5.57%. I'm still the loser so far while the gap did close some. BRK.B does not pay a dividend.

I continue to hope that 2008 does not end up being about who loses the least. The following are my eight picks with the starting share price as of December 28, 2007:

• Anglo American plc (ADR) (NASDAQ: AAUK) from $30.79 is Up to $32.75 for a gain of 6.37%.
• Bunge Limited (NYSE: BG) from $119.03 is down to $114.09 for a loss of -4.15%.
• Huaneng Power International (ADR) (NYSE: HNP) from $41.75 is down to $33.65 for a loss of -19.4%.
• Loews Corporation (NYSE: LTR) from $49.35 is down to $42.11 for a loss of -14.67%.
• Newcastle Investment Corp. (NYSE: NCT) from $13.08 is down to $9.89 for a loss of -24.39%.
• Raytheon Company (NYSE: RTN) from$61.51 is UP to $63.97 for a gain of +3.4%.
• Reliance Steel & Aluminum (NYSE: RS) from $54.32 is Up to $60.78 for a gain of +11.89%.
• Valero Energy Corporation (NYSE: VLO) from $70.55 is down to $48.85 for a loss of -30.76%.

The Indices:

• Dow Jones Industrial Average: 13,365.87 dropped to 12,820.13 for a loss -4.08%
• NASDAQ Composite Index: 2,674.46 dropped to 2,412.80 for a loss -9.78%
• Standard & Poor's 500 Index: 1,478.49 dropped to 1,385.59 for a loss -6.28%

This year's "stalking horse" Berkshire Hathaway (NYSE: BRK.B) (I am tracking the 'B' shares, not the more expensive 'A' shares) saw its B shares down from $4,685 to $4,457 for a loss of -4.87%. This is the second month Berkshire has had a loss which increased by a small fraction while most everything else improved.

This year, so far, it looks like the big cap DJIA was the place to be.

Yesterday our Federal Reserve Chairman Ben Bernanke announced another cut in the discount rate of a quarter point to 2% and changed posture to signal it would probably be the last cut.

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 currently own shares of AAUK, BRK.B, HNP, NCT, and VLO.

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Teledyne Technologies (NYSE: TDY) manufactures sophisticated electronic components, instruments and communications products. These include defense electronics, data acquisition and communications equipment for airlines and business aircraft; monitoring and control instruments for industrial and environmental applications; and subsystems for wireless and satellite communications. The firm also provides systems engineering and information technology services for defense and space applications; manufactures general aviation and missile engines; and makes on-site gas and power generation systems. Clients include Boeing (NYSE: BA), NASA and the U.S. Air Force. Lockheed Martin (NYSE: LMT), Northrop Grumman (NYSE: NOC) and Raytheon (NYSE: RTN) are competitors.

The company pleased investors last week, when it announced Q1 EPS of 77 cents and revenues of $451.8 million. Analysts had been looking for 66 cents and $424.6 million. The CEO noted that it was the twenty-fifth consecutive quarter of year-over-year earnings growth. Management also guided Q2 EPS to 72-74 cents (74 cent consensus) and FY08 EPS to $2.98-$3.06 ($2.93 consensus).

TDY shares popped on the news and are now forming a bullish "flag" consolidation pattern. Prices frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.

Brokers recommend the shares with two "strong buys", three "buys" and one "underperform". Analysts see a 15% average annual growth rate, through the next five years. The TDY P/E ratio (19.67), Price to Sales ratio (1.20), Price to Book ratio (3.59), Price to Cash Flow ratio (14.13), Sales Growth rate (17.17%) and EPS Growth rate (35.09%) compare favorably with industry, sector and S&P 500 averages. Institutions hold about 86% of the outstanding shares. The stock is one of those used to calculate the S&P 600 SmallCap Index. Over the past 52 weeks, it has traded between $42.86 and $59.18. A stop-loss of $50.90 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.

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Hexcel Corporation (NYSE: HXL) is a leading advanced structural materials company. It develops, manufactures and markets lightweight, high-performance materials, including carbon fibers, reinforcements, prepregs, honeycomb, matrix systems, adhesives and composite structures. The firm's materials are found in such diverse products as aircraft components, bullet-resistant vests, auto parts, golf clubs, window blinds and printed circuit boards. Customers include General Electric (NYSE: GE), Raytheon (NYSE: RTN) and Boeing (NYSE: BA). BP plc (NYSE: BP) is a major competitor.

The company surprised the Street earlier in the week, when it reported Q1 EPS of 23 cents and revenues of $344.5 million. Analysts had been expecting 20 cents and $314.1 million. The CEO noted that sales for commercial aerospace were up sharply, across the board. Management also guided FY08 EPS to the high end of the range 90-95 cents (93 cent consensus).

HXL shares popped above 50-day, 90-day and 200-day moving average resistance on the news and then passed into a bullish "flag" consolidation pattern. Stocks frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.

Brokers recommend the issue with one "strong buy", four "buys" and three "holds". Analysts see a 25% growth rate, through the next year. The HXL PEG ratio (1.04), Price to Sales ratio (1.84), Sales Growth rate (21.90%) and EPS Growth rate (35.29%) compare favorably with industry, sector and S&P 500 averages. Institutions hold about 95% of the outstanding shares. Over the past 52 weeks, the stock has traded between $17.00 and $27.91. A stop-loss of $19.25 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.

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MOST NOTEWORTHY:

• Merrill expects the turnaround at K Swiss (NASDAQ: KSWS) to be difficult given weakening retail sales. Shares were downgraded to Sell from Neutral.
  
• Jefferies cut shares of BJ's Restaurants (NASDAQ: BJRI) to Hold from Buy due to the company's high relative exposure to the subprime mortgage markets.
  
• Ford (NYSE: F) was downgraded to Underperform from Peer Perform at Bear Stearns. The firm recommends taking some profits following the recent rally in shares. Shares were also cut to Neutral from Overweight at JP Morgan, citing valuation, and to Sell from Neutral at Merrill Lynch.

• Wachovia cut EastGroup Properties (NYSE: EGP) to Market Perform from Outperform.
  
• Goldman removed SL Green Realty (NYSE: SLG) from its Conviction Buy List.
  
• RBC Capital lowered Developers Diversified Realty (NYSE: DDR) to Sector Perform from Outperform.
  
• Raytheon (NYSE: RTN) was downgraded at JP Morgan to Neutral from Overweight.

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After three months it is time to face the facts: two of the three indices beat my picks handily. I have not made a good showing so far and unlike most investment idea sources, I feel obliged to air my dirty laundry for all to see.

My riskiest stock pick Newcastle Investment Corp (NYSE:NCT) is down almost 37% this year, and the energy stocks did almost as poorly even though fuel prices are near all-time highs. The downers were not offset by this months' repeat winners.

March was a seesaw battle, but in the end there was not much to show for it. However, unlike the last day of January (down 370 points in the Dow) and February's last trading day (down 315 points), March had a final day of plus 46.49, which is not very meaningful.

The Dow Jones Industrial Average gave some ground in March as did the Standard & Poor's 500 Index while the technology heavy NASDAQ Composite Index was marginally up with stocks like Apple Inc (NASDAQ:AAPL) improving notably.

Most of my picks sagged a little more, while two remain in positive territory. Raytheon Co. (NYSE: RTN), the high tech defense contractor is up and Reliance Steel & Aluminum (NYSE: RS) is way up.

My original rational for my eight picks remains intact as far as I'm concerned, and although they are down I still like all of them for the year. See Chasing Value: Final list -- 8 stocks for 2008 for the original story. In January, I added Newcastle Investment Corp. (NYSE: NCT) and Huaneng Power (NYSE:HNP) to my holdings. I made no additions in February or March among these stocks. The only purchase we made in March was noted in Chasing Value: Tiffany is looking more polished and that has performed very well.

This month the average return for my eight picks was a loss of -15.96%, almost doubling the -8.06% through February. This under-performed the average return of the indices: -11.19%. This years stalking horse, Berkshire Hathaway (NYSE: BRK.B), sagged a little during the month, still besting both my average and overall indices average. So once more, I must take my hat off to 'my pal Warren'.

Now, including dividends for my picks, which average 3.91% yield divided by four for the three months, allows for an additional .978%, reducing the loss to -14.98%. Using 1.8% for the average dividend of the indices divided by 4 adds 0.45%, reduces the loss to -10.74%. Nothing can make my picks look good this month. BRK.B does not pay a dividend.

Newcastle Investments reduced its dividend by two-thirds in March (going forward) to increase liquidity and possibly buy back shares. In the coming months I will account for this and reduce the accrued dividends proportionally.

I hope 2008 does not end up being about who loses the least, instead of who makes the most. The following are my eight picks with the starting share price as of December 28, 2007:

• Anglo American plc (ADR) (NASDAQ: AAUK) from $30.79 is Down to $29.77 for a loss of -3.31%.
• Bunge Limited (NYSE: BG) from $119.03 it's down to $86.88 for a loss of -27%.
• Huaneng Power International, Inc. (ADR) (NYSE: HNP) from $41.75 is down to $30.54 for a loss of -26.85%.
• Loews Corp. (NYSE: LTR) from $49.35 is down to $40.22 for a loss of -18.50%.
• Newcastle Investment Corp. (NYSE: NCT) from $13.08 is down to $8.26 for a loss of -36.85%.
• Raytheon Co. (NYSE: RTN) from$61.51 is UP to $64.61 for a gain of +5.04%.
• Reliance Steel & Aluminum (NYSE: RS) from $54.32 is Up to $59.86 for a gain of +10.2%.
• Valero Energy Corp. (NYSE: VLO) from $70.55 is down to $49.11 for a loss of -30.39%.

The Indices:

• Dow Jones Industrial Average: 13,365.87 dropped to 12,262.89 for a loss -8.25%
• NASDAQ Composite Index: 2,674.46 dropped to 2,279.10 for a loss -14.78%
• Standard & Poor's 500 Index: 1,478.49 dropped to 1,322.70 for a loss -10.54%

This year's "stalking horse" Berkshire Hathaway (NYSE: BRK.B). I am tracking the 'B' shares, not the more expensive 'A' shares. The B shares are down from $4,685 to $4,472.90 for a loss of -4.53%. This is the first month Berkshire has had much of a loss, but it still bested most everything else....so 'my pal Warren' outperformed all of the indices and my average as well. As was the case last month, individually RTN (defense sector), AAUK and RS (metals) made a better showing.

The Federal Reserve Chairman Bernanke, speaking before Congress used the recession word quite freely, and again shared his willingness to lower interest rates again.

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 currently own shares of AAUK, BRK.B, HNP, NCT, and VLO. (and TIF)

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Scientists at NASA plan to put one of the twin Mars rovers to sleep and limit the activities of the other robot to fulfill a NASA order to cut $4 million from the program's budget, mission team members said Monday.

The project, which was originally supposed to run for three months, is now in its fourth year, successfully exploring the terrain of Mars. It costs NASA about $20 million to keep the project going, but due to budget cuts, the space agency is forced to put its child up for adoption, so to speak. As of yet, no billionaire has stepped up to the plate, but I am hoping that someone will soon.

For the cost of a few of your average modern missiles, we are abandoning a program that has been one of NASA's most visible and productive projects.

In a country where politicians and industry titans alike speak about the need to invigorate U.S.'s leadership in the fields of science and engineering, this program provided a major vehicle (pun intended) toward stimulating interest, while bringing precious information to active scientists.

Perhaps naming rights could be sold to a major corporate sponsor. It seems to me that Raytheon Company (NYSE: RTN) or Lockheed Martin (NYSE: LMT) might have an interest in helping out. They make hundreds of millions of dollars from the various missile programs. Only today, Raytheon Technical Services Company LLC, a subsidiary of Raytheon, has received a $56.9 million contract extension to support facilities and operations for astronaut training at two NASA facilities.

There are so few federal programs that actually can claim any return on investment. To cut this one is tragic and foolish given the three trillion dollar federal budget recently submitted to congress .

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 do not own shares in RTN or LMT.

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"The recent fits and spasms of the stock market predict tough times ahead; and ironically, that's good news for Raytheon (NYSE: RTN)," says Louis Basenese, Oxford Club Associate Investment Director.

In The Oxford Insight, he notes, "When stocks are anticipating a recession, the best offense is often defense stocks -- and there's plenty of reason to expect this defense contractor to shine, even if a recession is confirmed."

"Defense will likely remain one of the largest budget items for the United States, regardless of which political party wins the fall election. And, according to JP Morgan Securities, the defense outlays of the United States actually increase, by an average of 6.5% during recession years since 1945.

"So in the end, recession or not, as the world's fifth largest defense contractor, Raytheon's sure to enjoy steady demand.

"I'm sure you've recently read, all about the large spy satellite that became disabled and was poised to re-enter earth's atmosphere with a dangerous load of toxic fuel. What few know is that Raytheon's Standard Missile-3 was specially modified to intercept the target 153 miles over the Pacific Ocean.

"At the same time, the Sea-Based X-Band Radar, designed and built by Raytheon, was used to track the satellite prior to the missile engagement and perform the hit assessment afterward. The mission was a smashing success.

"While this recent example is interesting, it's important to keep in mind that it only scratches the surface of Raytheon's product lineup. What's most compelling about this defense company is its program agnostic business model.

"Instead of depending on individual programs or platforms, Raytheon competes to integrate its technology into as many types of military equipment as possible. The result is a highly diversified, economically insensitive portfolio of thousands of small projects - each accounting for no more than 4% of revenues. Therefore, one cutback or program cancellation will not devastate the bottom line - one, I might add, that continues to improve.

"In 2007, Raytheon outperformed all expectations. Sales increased 8% to $21.3 billion. Its backlog grew to a record $36.6 billion. And most importantly, earnings per share from continuing operations increased 26%.

Even better, Raytheon unloaded its last remaining non-core operations. What we're left with now is a company responsible for some of the best technology for assisting in national and homeland security.

"No doubt, this technological leadership will help keep the registers ringing and share prices rising. Especially since management always puts earnings to good use - lowering debt, buying back shares and increasing the dividend. In sum, we can expect good things to come for Raytheon, recession or not. So keep buying."

Each day, Steven Halpern's TheStockAdvisors.com offers the latest market commentary and favorite investment ideas from the nation's leading financial newsletter advisors.

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The currency of our realm, the US Dollar, has been losing value for many years, but lately the results of this sad state of affairs have become increasingly more evident. Concerns are mounting on a global basis not just in the United States. The euro, once pegged at a buck, is now trading at $1.55, while gold has passed $1,000 and oil has continued its charge, breaking through the $110 per barrel mark.

While a good deal of this problem is home grown, the pain is being felt all around the world. We have read many stories about how the American economy is a smaller part of the global economy and becoming somewhat detached. This is nonsense. What has happened is that the global economy has become infinitely more integrated and like any integrated structure (the architect speaking), what occurs in one place is felt everywhere.

The Federal Reserve Board, led by Chairman Ben Bernanke, has been watching the economy in an extremely measured fashion, bordering on casual. To those who see beyond Bernanke's calm demeanor, one should imagine a stock trader of old, holding the ticker tape up to his eyes and monitoring every change, every blip in the market as the ticker tape machine clicks away, spewing out the latest market activity.

Last Friday the market tanked capping off a bad week and prompting me to post Dow below 12,000 -- do I hear 11,000? Yes I do!. Then, Monday, it tanked again. The Fed had seen enough and juiced up the market on Tuesday by providing a burst of liquidity in the form of $200 billion in credit swaps so that financial institutions would have more capital to lend. This was like taking a hit on a super caffeinated energy drink -- Wall Street got all excited for a day and the market jumped: Dow up +416: The Fed is not dead.

The Fed's action was fun for a day, but by Wednesday, traders were already whining 'what have you done for me lately' and when the sugar and caffeine had burned off, the market fizzled out quickly like some cheap fire works.

We all view the world from our own vantage point and have a hard time seeing the perspective of others, but they feel the pain also, becasue when the dollar goes down in value, it hurts our buying power. And what about the Chinese who are holding over a trillion dollars in US Treasury notes?

Then there are the European farmers and manufacturers crying foul because the relative cost of their goods on the open market has escalated. What about the pain of many of our dollar pegged neighbors, like Costa Rica, whose citizens were already far behind us on the economic curve, and now they also have to deal in dollars that have lost so much value. Oil , too, has gone up in price not just because OPEC won't increase production, but because they are "petro dollars" and correlate to our currency.

Every time our federal government prints more money (or issues digital currency) to cover the federal deficit, trade deficit, Iraq war, which is only off-budget in the imaginations of our government officials (elected and not), lowers interest rates (making Treasury notes less desirable) issues credit swaps or sneezes, the US, AND the Global economy STILL catches a cold! Right now, some are concerned it might be more than a cold -- the world economy might have caught pneumonia.

All of these popular companies must continue to operate under these sickly economic conditions. There is no day off, no place to hide, no running from the competition for Apple Inc. (NASDAQ: AAPL), Amazon.com (NASDAQ: AMZN), Anglo Amer ADR (NASDAQ: AAUK), Bunge Ltd. (NYSE: BG), Diageo plc (NYSE: DEO), eBay (NASDAQ: EBAY), General Electric (NYSE: GE), Google Inc. (NASDAQ: GOOG), Goldman Sachs (NYSE: GS), Microsoft Inc. (NASDAQ: MSFT), Raytheon Company (NYSE: RTN), Reliance Steel and Aluminum (NYSE: RS), Tiffany and Co (NYSE: TIF) and Under Armour'A' (NYSE: UA).

The only way to reduce inflation is to have a balance between the amount of currency in circulation and the goods and services available to purchase with said currency. Every action by the Fed to create liquidity in the economy, generates a phantom value, and if not met with an increase in productivity, is devaluing the dollar and enslaving us to a future of working more for less benefit. That is why I so strongly believe we should fund roads & bridges NOT mad money stimulus. For more discussion you can also read Serious Money: Stimulate productivity not consumption, which I believe is an imperative. That is the gravity of the situation.

In Part Two, I will expand further on these topics and delve into how there actually were and are weapons of mass destruction right under our noses -- economic weapons of mass destruction.

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 currently own shares in AAUK, EBAY and TIF.

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Earlier in the week I posted about finding the market bottom using that age-old handheld calculator, a white paper napkin. So, unfortunately it looks like I may be right again. Not exactly something I was hoping for, but if it has to be, it has to be. I wonder if my old napkin can outperform Wall Street super computers?

Is this an auction to the bottom? Are investors bidding things down instead of up? Looks like it from all the negative sentiment. Consumer sentiment is down, and short sellers are all excited, increasing their negative positions to new highs every day.

And here is the all-telling sign of capitulation: the ever-lying overly optimistic government is starting to admit how bad things are and throwing hundreds of billions of dollars at the problem. When does the turnaround come?

That's easy: when President Bush reverses his position from last week and states that yes, we may be in recession; followed by the least experienced investors stomachs churning while they bail out totally.

So let's look on the good side. This means all you true value investors should have your watch lists in hand as "my pal Warren" and I do (and Dan and Greg and Mr. Noital) because the bargains are going to come fast and furious as we approach the Dow at 11,000. Let's also not forget about stimulating production, as I've already written about in Serious Money.

Oh, by the way, this morning's short-lived uptick was just a few bottom fishers getting excited...but there is more to come.

A few things from my watch list:

• Anadarko Petroleum (NYSE: APC)
• Anglo Amer ADR (NASDAQ: AAUK)
• Bunge Ltd. (NYSE: BG)
• Diageo plc (NYSE: DEO)
• General Electric (NYSE: GE)
• Intuitive Surgical Inc (NASDAQ: ISRG)
• Raytheon Company (NYSE: RTN)
• Reliance Steel and Aluminum (NYSE: RS)
• Tiffany and Co (NYSE: TIF)
• Under Armour'A' (NYSE: UA)
• Valero Energy (NYSE: VLO)
• Wells Fargo (NYSE: WFC)

Many of these are already bargains, but they will go lower. There are many more quality companies out there, and the lower the market drops, the easier it is to find them. Surprising as it may seem, when the market gets oversold, almost everything is a bargain. That being the case, load up on companies that pay dividends with quality products, good cash flow, low debt and of course...quality management.

Final Update: the DJIA closed at 11,893.69 -146.70 (-1.22%)

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