Another month and quarter in the books.  This month, the Dow was the big winner with a gain of 4.7%.  The Nasdaq was second with a 4.04% return and the S&P 500 in last with a 3.53% for the month of September.

Yesterday I sold some picks that were no longer on my list and Monday I'll add some more.  Those that were dumped were AKS, NOV, JNS and SII.  I was sad to see some of these, especially SII who seemed to be serving me well over the last couple of months.  I was not sad to see JNS go.  This was the only position over the last couple of months to exit in the red.  In fact, I don't think JNS was ever out of the red since I bought it.  Win some, lose some.

Here are the week's and month's final numbers.

As mentioned, the Dow was the high flyer, up 4.7%, but our picks did a whole lot better.  Since I am holding riskier assets, I expect that they should outperform the indexes during up trends.  The real trick here is to see if they hold up during down trends.  I hope that by buying very high quality stocks that the downside will be somewhat inline with the major indexes (yes, I expect to lose money when the market goes down) and significantly outperforms during up trends.  So far, so good.

I mentioned on July 30th that I'd begun watching the homebuilder ETF for a long term investment.  Since that time they've shed another 20%.  That's fine, I didn't think we were out of the woods, but there's been another encouraging sign that the downside may be becoming limited.  Yesterday the new home sales figure was pretty rotten.  Sales are down 21%, August's sales were weaker than expected and notably, the median sales price of a new home was down 7.5%!

So with all of abysmal news, what did the XHB do yesterday?  It was 1.46%.  I have found that when markets or sectors start responding opposite of what they "should", the trend may be reversing.  For example, during the 2000-2002 bear market, there was a lot of good news that came out about the economy and the market would take it negatively.  The inverse was true during the bull market in the late 90's.  There has even been a little of that recently.

I don't think this is a "back up the truck" type indicator, but it's a sign to me that the tougher times may be over for XHB.  That doesn't necessarily mean the hard times are over for home sales and home prices.

I'm a satisfied Vonage customer and have been for years.  When the IPO was set back in late spring 2006, as a customer, I was offered shares.  I figured VG had a decent chance of doing well if they continued to get more subscribers.

So I began signing up for a few shares from a wildly speculative standpoint.  Then I read the fine print to realize that the commission on the trade was circa 1980 where I would come close to paying $100 in commission if I remember correctly.  Forget it!  I'll just buy it on the open market and pay a modern day fee.  It was apparent how weak the thing was out of the gate, but I had no idea that it'd be trading at 96 cents as of yesterday's close.  Wow. 

I never bought a share, by the way.  I was always looking for some strength to the upside, and as you can see by the chart, that never materialized.

I really don't understand why more people don't use Vonage as opposed to POTS or more expensive VOIP competitors like the cable companies.  Apparently people like to pay more for the same thing than I thought and Vonage has just never really been a breakthrough company when it comes to profit.

So, I always waited for Vonage to report that the business was turning around and watch the share price explode and I'd jump on board for the ride.  I guess it could still happen, but this stock, sadly enough, will probably bounce around in penny land for awhile.

The strike has commenced.  The average worker at GM costs the company $25-30 more than its overseas competitors.  And what do the union workers continue to want?  More.  Then they wonder why their company can't compete and continues to lose money.

This is GM's opportunity to get competitive on a global scale by ditching the union.  Apparently these are the jobs that Americans won't do for the pay that they get.  Bring in some legal aliens that will do this work at a globally competitive price.  Let these union punks go pick onions.

After a successful week with the stock picks, I noticed that my Marketocracy page, (click) which is essentially my "mutual fund" that follows my picks in a paper fashion, is back at a new all-time high.

(By the way, the big orange line is my fund, the other lines are the major market averages)

What a week for the bulls.  Ben Bernanke demonstrated that he is all about bailing out the market at the expense of sound monetary policy.  At least the market showed some appreciation by ending the week up sharply.  Last week the picks lagged the market as the major indexes were up less than 1% and the picks were down less than 1%.  Well, that definitely changed this week.  Have a look at the numbers.

The picks nearly tripled the performance of the Dow Jones which was the best performer this week up 2.81%.  The S&P was next up 2.76% followed by the Nasdaq up 2.65%.

Except for on CNBC, most people I've come across are not happy with the rate cut, even though their long holdings were well in the black thanks to yesterday's huge move up.  People are genuinely concerned that the monetary policy of this fed chairman is weak.  They're very concerned over inflation and a falling dollar and would like to see a good economy in the long term instead of a short term spike in their portfolio.

I share their views and I'm quite disappointed in yesterday's action.  I know Greenie wasn't perfect, but his policy seemed more along the lines of taking care of the economy only.  If you take care of the economy, the market will take care of itself.  I know there were some bailouts from time to time, but bailing seems to be a policy now.

It also appears that violent moves in either direction make equity investors nervous.  Imagine buying a stock and it goes up 50% overnight.  Sure, this is a great problem to have, but you start to wonder ... do I take the 50% and run?  This thing could turn around and I could say "Wow, I was up 50% and now I'm in the red" or of course, it could run up a few hundred more percent in the weeks or months to follow.  Now multiply this by everyone who saw big gains yesterday and you leave yourself with a nervous crowd.

This is what I like to refer as "crashing up".

The famous Zacks Research has picked one of our picks as it's bull of the day.  Kind of interesting.

Here's the story if you're interested.

As you know, I have a very short term open position in oil through options on USO.  My bet is that over the next week oil will settle down for a little bit and try and gain some footing around $80 with the possibility of some profit taking that might pull it down a bit.  The official name for this is bearish neutral, I suppose.  If oil sits where it is, I make a decent profit, if it slides back a couple of bucks, the position is still doing quite well.  So how do I lose money?  If oil shoots to $85 or below $75 in the next week, I'm in the red.  

I feel this is like the big lie, tell it enough times and most will believe it.  Everyone has been talking recession for the last few months and the voice has been getting louder.  At first, it seemed irrational and baseless because none of the numbers seemed to support it.  Then things started to change and quick.  Lenders started tightening the purse strings dramatically and went in search of quality customers.  Commercial paper is having its own set of woes.  Private equity is no longer Wall Streets little darling (that was a short relationship, dare I say, a one night stand) and now the "perfect storm" for real estate.

I understand that the economy runs in cycles and we've been on the higher end and must inevitably fall to the lower end at some point, but it seems premature.