“Work eight hours and sleep eight hours and make sure that they are not the same hours.”

– T. Boone Pickens

Inflation can do tricky things to markets. It creates distortions. In those distortions, an intrepid investor can find some big moneymaking ideas. I think we’ve got one opening up in oil and gas, and it is not without precedent in financial markets. In fact, it’s starting to look a little like the tail end of the 1970s in some respects.

In the spring of 1969, the Dow Jones industrial average stood at 969. By 1982, the Dow hit 1,071. That’s thirteen years of going nowhere. (We’ve had 10 years or so of going nowhere, though the ride between the poles has been anything but boring).

The problem is inflation makes that performance

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Stock prices are falling even faster than Alan Greenspan’s reputation or Warren’s Buffet’s mystique. Come to think of it, they are all falling at about the same pace. Hmmm…it’s as if they’re all one and the same.

Greenspan’s reputation - like AIG’s share price - is already in shambles. In fact a move to zero might be an uptick. Warren Buffett, on the other hand, still boasts a rabid following, as well as a few billion dollars in the bank. So let’s weep not for Warren.

Even so, this formerly glistening icon of “buy and hold” has become a bit tarnished. Buffett’s genius, we are now discovering, correlates quite highly with the S&P 500 Index. His genius is not quite as highly correlated with the S&P 500 as, say, Bill Miller’s, the former investment genius at the Legg Mason Value Fund. (For a little background, please click here). But an

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This post is a guest contribution by Jeffrey Saut, Chief Investment Strategist and Managing Director of Equity Research at Raymond James & Associates.

I believe “income” will be a profitable investment theme for the foreseeable future. Indeed, the baby boomers are retiring; and, the yields afforded them via Treasury securities, money-market funds, and certificates of deposit (CDs) won’t supplement their retirement account incomes enough to support them in the style to which they have become accustomed. Enter stocks, which since 1926 have averaged a total annualized return of 10.4%.

Interestingly, roughly 5% of that return has come from earnings growth, 0.9% has come from price-to-earnings (P/E) multiple expansions – but 4.5% of said return was derived from

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You probably know John Maynard Keynes as an economist, but may not know that he was also a great investor, maybe the most the successful of the Great Depression era. And for that reason, given all that our own markets are going through, it may be a good time to look at his investment career.

Keynes managed Cambridge’s King’s College Chest Fund. The Fund averaged 12% per year from 1927-1946, which was remarkable given that the period seemed to be all about gray skies and storm clouds - it included the Great Depression and World War II. The U.K. stock market fell 15% during this stretch. And to top it off, the Chest Fund’s returns included only capital appreciation, as the college spent the income earned in the portfolio, which was considerable. I think it must be one of the most remarkable track records in the annals of finance.

Keynes also made

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Some of the valuations in today’s market are absurd, says Chris Mayer. Though market volatility means high risks in the short-term, now is the time to “plant the seeds of monster future returns.” Chris picks four deep value stocks with big upside potential.

This from The Rude Awakening:

The panic in this market is incredible. It’s leading to some absurd valuations. Particularly among the smaller-cap stocks. These stocks have really been hit hard because they have less liquidity than large cap stocks.

When waves of selling sweep through the stock market, they might rock a large cap stock from stem to stern. But the same waves will capsize a small cap stock. So the conditions in the financial markets are very scary right now for any investor who’s holding small-cap resource stocks. But unless we slip into some global depression, these stocks will come back - and

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Last Friday was the 75th anniversary of the repeal of Prohibition. It seems we can’t escape looking back over our shoulders at the 1930s.

We teeter closer to the sequel no one wants to see: Great Depression II. We got horrible news on the job front last week. Unemployment climbed to 6.7% as the nation lost another half a million jobs in the month of November alone. It was the worst rack of numbers in 34 years. One in 10 American mortgages is now either behind on its payments or in foreclosure.

Businesses are cutting back. Consumers are cutting back. Commodity prices have collapsed. The stock market is down more than 40% this year. When we close out the books for 2008, you’ll have to go back to the 1930s to find a comparable disaster for stocks in a single year.

So I find myself looking back at the 1930s often these days.

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(P.S: Sorry for any disturbances the advertisements above may have caused you)An idea for this series of articles (this will probably be a long one) came from a few readers who wrote to me asking about the exact issue described by the title. I thought it might be useful to do a few writeups on some general strategies to employ. No gaurantees of course.Each of these strategies, like so many other things in life, would work when executed well but might fail when improperly done. Also, they might be mutually conflicting, so it's important to keep an open mind. For example, I can tell you trade aggressively in one article, and to be patient for value to emerge in another article. It can be confusing; the right thing to do often comes from experience and gut instinct, and the worst thing is to ...

(P.S: Sorry for any disturbances the advertisements above may have caused you)An idea for this series of articles (this will probably be a long one) came from a few readers who wrote to me asking about the exact issue described by the title. I thought it might be useful to do a few writeups on some general strategies to employ. No gaurantees of course.Each of these strategies, like so many other things in life, would work when executed well but might fail when improperly done. Also, they might be mutually conflicting, so it's important to keep an open mind. For example, I can tell you trade aggressively in one article, and to be patient for value to emerge in another article. It can be confusing; the right thing to do often comes from experience and gut instinct, and the worst thing is to ...

I had the opportunity of opening my contact book to talk to a fine bunch of economists today… Gary Schlossberg at Wells Fargo Capital, Chris Rupkey at Bank of Tokyo-Mitsubishi and Tony Crescenzi at Miller, Tabak for my column on what’s next from the Fed Market Buzz: Why Investors Might Not Want Another Rate Cut.