Some of my dislikes:

• Companies that have business selling to other companies. There is something about a company that is reliant on another company or industry to manufacture good products and sell them profitability that I avoid. Even if the company is the best around and well run, bad economics or management by their customers can seriously affect the suppliers bottom line.
• Faddish retail companies. Clothing lines, beverages and restaurants. These can all lose ground to the next hot item if they do not come up with the next hot item themselves.
• I have a tendency to avoid all health care and pharmaceuticals. Although health care sucks up a huge portion of the U.S. GDP, I just feel the whole thing is propped up by ever increasing costs that will someday collapse. I am probably entirely paranoid here, but I do not invest in this area.
• Fast growing companies with no earnings set off warning bells in my head. It is my belief that it is easier for a company with hot products or in a hot sector to grow revenues than earnings. A hot company has to start bringing significant dollars to the bottom line before I get interested.

Some of my preferences:

• I gravitate to companies with market capitalization between $500 million and $2 billion, plus or minus. I believe companies this size are big enough to have established themselves, but too small for most of Wall Street to have found. Often they have between 1 and 4 analysts following them and good information is hard to find. Maybe I can find a nugget of news that shows me the market has miss-valued the stock.
• I like industries with products people and business must have: Energy, transport, gambling, banking., infrastructure. Well run companies in these business can often count on a certain built in customer base and work to maintain or improve margins.
• I get interested in a company that has a business or niche I have not previously heard of. This might be a company that has carved out a profitable niche by offering a unique product or service. I will read deeper to see if there is more to get interested in.

Once I find a company of interest I usually add it to this site’s Watch List. At some point I will come back to it and dig deeper into finances and their story. It may be the next day or weeks down the road. Right now energy companies are hot and anything to do with home construction is not. I have some of both on the Watch List to get back to as market conditions change. When I review deeper I may keep a stock on the list, remove it because I do not find a compelling reason to keep monitoring it, or move it to one of the portfolios I track here. One thing I try to keep in mind is that prospects change for companies, sectors and markets and it is important to keep options open.

I am also going to make some admin changes to the Watch List page. The Yahoo Finance chart information has become too ungainly. The code builder from Yahoo that makes the chart only allows 10 stocks. I have hacked it a bit to get more, but I have reached some sort of limit in either that code or my page length here and I cannot get all of the Watch List stocks listed.

I have a page that lists selected articles, now renamed Top Articles. Listed there will be links to the posts of this site that have generated the most interest or I like really well.

Finally, this last week was definitely a relief from the train wreck of the 1st quarter. The now reorganized, 20 Stock Portfolio lost 12% in the first quarter. For the last week the new Income Portfolio was up 3.7% and, as would be expected, the more aggressive Growth Portfolio was up 7.8%. On my to-do list is to find an couple of indexes to reference my 2 portfolios against.

The 2nd quarter is off to a great start and I am working to improve the quality of information provided here. Let us hope both trends continue.

I will scan through the Watch List stock every few days looking for new news. Now that the 20 Stock Portfolio is at full strength, (The 20th, (HDNG: 7.80 -0.19 -2.38%), was added 2/5/08) I am looking for companies that may be better performers that the current members. Also, some of these companies just interest me.

Power Air Corp PWAC is a micro-cap working on some intriguing fuel cell technology. The stock is going nowhere but down, and trading for pennies. I am waiting to see if they can bring a product to market and sell it profitably. I should not be hard to catch the stock at a few bucks a share on the way up, if it happens.

Several companies are home building, construction or home improvement related: (AVTR: 18.75 +0.68 +3.76%), (BLDR: 2.01 -0.10 -4.74%), (HWCC: 9.34 +0.14 +1.52%), (SSD: 23.62 +0.17 +0.72%). These appear to be well run companies that should out perform when the market starts to anticipate a housing rebound. No sense rushing in now! Though, writing this makes me want to take another look at HWCC.

Recent additions: (EEFT: 15.67 +0.28 +1.82%), (PGF: 18.13 +0.10 +0.55%), (STAN: 16.60 +0.12 +0.73%)

Finally, I am always looking for companies in South America that may stand out. I spend a lot of time deep south, and see healthy economic activity. Here are some companies listed: AKO-A, (BLX: 13.86 +0.33 +2.44%), (IRS: 13.25 -0.14 -1.05%), (MELI: 71.26 -0.15 -0.21%). There are some interesting stories here, but a lot of digging is required to see if valuations make sense. MELI could be huge and IRS would be in the 20 Stock Portfolio if it wasn’t in Argentina.

I hope this post encourages some of you readers to take deeper looks at these stocks or the others listed. Get back to me with your thoughts.

There are a half dozen ETFs now available that lay claim to the alternative sector. I have picked the following two for my Watch List to get both some global and small cap coverage, these being additional interest areas.

Market Vectors Global Alternative Energy ETF (GEX: 19.51 +0.06 +0.31%): This fund of 30 stocks is balanced between large cap and small cap companies that receive at least half of their revenues from alternative energy. Approximately one half of the stocks are of the international variety.

First Trust NASDAQ Clean Edge U.S Liquid ETF (QCLN: 14.2199 -0.0001 -0.00%): This funds uses a NASDAQ index which tracks emerging technologies primarily in solar photovoltaics, biofuels and advanced batteries.

Again, my is a group of ETFs that I have picked to look for trends in certain market sectors. The market can be extremely volatile day-to-day, but the trend is your friend.