Analyst Upgrades

• Bunge (BG) to buy from hold at Deutsche Bank.
• Textron (TXT) to overweight from neutral at JPMorgan.
• CSX (CSX) to buy from neutral and Pulte Group (PHM) to conviction buy from neutral at Goldman.
• Aol (AOL) to buy from neutral at UBS.
• Kohlberg Capital (KCAP) to outperform from market perform at JMP Securities.
• Owens Corning (OC) to buy from neutral at BofA/Merrill.
• Jefferies (JEF) to buy from neutral at Ticonderoga.
• Harris (HRS) to outperform from perform at Oppenheimer.

Back in the summer of 2010 when the market was down, the gulf was full of spewing oil and investors were running away from bad news stocks shocked most notably by BP (BP) oil spill, I decided to post a contrarian story reminding readers that the fear was overblown and created a buying opportunity.

"My pal Warren" has said for years that we should buy on fear and sell on greed. The toxic stock portfolio was a result of this sentiment.

This is the fourth update to my ranting eight months ago that acquiring six of the most hated, and most highly traded stocks with constant negative headlines would outperform the overall market. The theory has born fruit as the toxic stocks are ahead and the difference is increasing over time.

Analyst Upgrades

• Tyson Foods (TSN) to buy from hold at Deutsche Bank.
• Carmike Cinemas (CKEC) to buy from neutral at Merriman.
• Ambow Education (AMBO) to conviction buy from neutral at Goldman.
• Johnson Controls (JCI) to overweight from equal weight at Barclays.
• Dynex Capital (DX) to outperform from market perform at JMP Securities.
• Ensco (ESV) to outperform from neutral at Credit Suisse.
• York Water (YORW) to buy from hold at Brean Murray.
• Mid-America Apartment (MAA) to market perform from underperform at FBR Capital.
• Cheniere Energy Partners (CQP) to hold from sell at Citigroup.
• Forest Oil (FST) to positive from neutral at Susquehanna.
• Tractor Supply (TSCO) to outperform from neutral at RW Baird.

Analyst Upgrades

• Wells Fargo (WFC) to conviction buy from neutral at Goldman.
• Adobe (ADBE) to buy from neutral at UBS.
• Fifth Third Bancorp (FITB) to outperform from market perform at FBR Capital.
• Vail Resorts (MTN) and Goldcorp (GG) to buy from hold at Deutsche Bank.
• OmniVision (OVTI) to overweight from neutral at JPMorgan.
• Penn Virginia (PVA) to hold from sell at Canaccord.
• Hub Group (HUBG) to outperform from market perform at Morgan Keegan.

If you would have known that $100 oil was coming just two days ago due to major geopolitical strife in Libya and elsewhere in North Africa and the Middle East, the thought might be that the bull market would be a sudden bear market. So far that is not the case and the market was not even down a full percentage point today.

Here were today's unofficial closing bells:

Dow Jones 12,105.78 -107.01 (-0.88%)
S&P 500 1,307.40 -8.04 (-0.61%)
Nasdaq 2,722.99 -33.43 (-1.21%)

Every quarter, investors eagerly await the disclosures for the holdings of top-notch hedge fund managers. Which stocks are being dumped? What are the new purchases?

Just look at billionaire hedge fund manager John Paulson. Over the past couple of years, he has been a big holder of gold stocks. And yes, in light of the terrible plunge in the precious metal in January, investors are wondering if Paulson is still a bull.

Analyst Upgrades

• Wynn Resorts (WYNN) to overweight from neutral at JPMorgan.
• Oracle (ORCL) and Alliance Data Systems (ADS) to outperform from neutral at Macquarie.
• Saint Joe (JOE) to outperform from market perform at Keefe Bruyette.
• Starwood Hotels (HOT) to neutral from underperform at RW Baird.
• Middlesex Water (MSEX) to buy from neutral at Janney Capital.
• Consol Energy (CNX) to buy from hold at BB&T.

In the middle of the summer with the stock market smoldering from the economic aftershocks of the BP (BP) oil spill, I decided to post a contrarian story emphasizing a very common refrain among value investors, "my pal Warren" being head of the class: buy on fear (sell on greed). This notion is continuing to work for what I called the toxic stock portfolio.

This is the third update to my ranting five months ago that six of the most reviled and most highly traded stocks featured by daily bad press as a group would outperform the overall market. It has, with the big winner rising from being one of the biggest losers.

Qualcomm (QCOM) is scheduled to report Q4 EPS on Nov. 3 and host an analyst meeting on Nov. 17. November option implied volatility is at 34, December and January is at 28, near its 26-week average of 29, according to Track Data, suggesting larger near-term price movement.

Transocean (RIG) is expected to report Q3 EPS on November 4. November option implied volatility is at 55, December is at 47, January is at 46, versus its 26-week average of 43, according to Track Data, suggesting larger near-term price movement.

Options Update is by Stock Specialist Paul Foster of theflyonthewall.com.

A very common refrain among value investors, "my pal Warren" being head of the class, is buy on fear (sell on greed), and it is working with the toxic stock portfolio.

This is the second update to my ranting twelve weeks ago that the six most highly traded stocks receiving the most bad press would be a great contrarian investment, and that this group would outperform the overall market without much difficulty.

It was true earlier, and it is still true today as the DJIA topped 11,000 again. The toxic stocks list includes Bank of America (BAC), Citigroup (C), General Electric (GE), BP (BP), Goldman Sachs (GS) and Transocean (RIG).

Intuitive Surgical (ISRG) closed down $15.32 to $290.26 on Monday. Goldman Sachs initiated a sell rating on ISRG. October put option implied volatility is at 38, November and January is at 42, versus its 26-week average of 37, according to Track Data, suggesting larger November price movement.

Transocean (RIG) closed up $2.30 to $62.36. RIG calls are active on 51K calls (30K puts) with concentrated volume in November calls. October call option implied volatility is at 37, November is at 41, January is at 37, versus its 26-week average of 43, according to Track Data, suggesting decreasing price movement.

Update is by Stock Specialist Paul Foster of theflyonthewall.com.

CBOE Volatility Index-VIX was down 78 cents to $21.21. The 10-day moving average is 23.79, 100-day 26.89. The S&P 500 was up 1.1% to 1116.10.

Transocean LTD (RIG) closed up 2 cents to $58.84. The April 20th Gulf of Mexico explosion was aboard a Transocean owned deepwater rig. Crude oil futures are recently up 0.86% to $77.11 according to Bloomberg. RIG October put option implied volatility is at 46, November is at 44. That is near its 26-week average of 44, according to Track Data, suggesting non-directional price movement.

Otions Update is by Stock Specialist Paul Foster of theflyonthewall.com.

In case you need to be reminded to look closely at the books, today's poster boy for erroneous ledgers, Bernie Maddoff, should be a constant reminder. Furthermore, when you are looking at the books, remember that Benjamin Graham, mentor to "my pal Warren," advised buying stocks for less than their intrinsic value. And book value is the starting point in attempting to establish that.

Two weeks ago, I posted an update on my toxic stock picks. These were six unloved stocks where I felt the stage was set for market beating returns. The same is true again for today's market-beating group, although it is not the headlines that tied this group together, but their standout bargain metrics.

Buy on fear sell on greed is being put to the test today, as I post the first update to my ranting three weeks ago that the six most highly traded stocks receiving the most bad press would be a great contrarian investment. I went on further to claim that the punishment was exaggerated and that this group would easily out perform the over all market.

Normally, I would not post so soon but the market has done an about face (again) and I wanted to take a glance. The stocks I suggested buying were Bank of America (BAC), Citigroup (C), General Electric (GE), BP (BP), Goldman Sachs (GS) and Transocean (RIG).

Until recently, my largest positions were in financial stocks Citigroup (C), Wells Fargo (WFC) and Bank of America (BAC). As a contrarian investor, I do buy on fear and sell on greed as "my pal Warren" has advised for many years. This has worked out to be very profitable over the past 18 months. However, in the past 30 days the financial stocks have dropped to second place in favor of oil and gas stocks.

I think the economic recovery is moving at a snail's pace, lowering anticipated demand for oil while gas was already depressed based on the same factors and the addition of numerous new large supplies. Add to this the mess in the Gulf of Mexico and the public's already negative sentiment about oil companies and you have the makings of depressed pricing in the sector.