Nasty stock market, assured. Maybe a bottom has been found, maybe not. Economy stinks, but it looks like the worst is here and probably around for the next few months. I'm beginning to see a decent shot at recovery beginning mid-2009.

I'm going back to the basics in stockpicking. What helped a few years ago is what's going to be the plan now. I like low valuation (aren't they all), low (or no) debt and nice growth prospects. I still like LF, RL, GR and AAPL. However, my two new favorites are.....HOTT and OPXT.

I began buying Hot Topic (HOTT) in early 2008 at a price under $5. It's been in the $7 - $9 range for the past month or so, and I think it's going higher soon. Food, clothing and shelter. Even in the hard economic times, those three will win and HOTT fits in #2. HOTT slowed (stopped) expansion and CapEx about one year ago; nice call in this environment. HOTT has morphed a bit more into music and less into pure Goth; they have rock t-shirts, even some old school (Rush, ACDC). Twilight (movie/book) products are sold at Hot Topic. Their music/merchandise online store Shockhound ( http://www.shockhound.com ) shows promise. Monthly sales per store has been increasing through 2008....and shows signs of accelerating. A year ago, Board of Directors approved a $40 million share repurchase, yet only did ~20% of that amount. Now, with the future looking much brighter, I think we might see another one.

OpNext provides communication devices to Cisco and the like. They are in the midst of purchasing Stratalight, a 40G device leader. OpNext trades below cash, because of this purchase. OPXT stock has fallen from ~$20 to less than $2, and that's value. Network expansion / CapEx might be slowed, but will continue globally, and OpNext is a leader. No debt, bright future.