The price-to-cash flow ratio has been repeatedly promoted in various publications as one of the more important metrics to consider when evaluating a stock to buy. Apparently over long periods of time it is more telling than the often quoted price-to-earnings ratio. I have read that cash flow is a key metric that "my pal Warren" looks at for Berkshire Hathaway (NYSE: BRK.B) investments.

Here are the figures for the Chasing Value: Final list -- 8 stocks for 2008 in order from highest to lowest P/CF. The 12/28/08 starting stock price, yesterday's closing price and the current P/CF for the most recent fiscal year (MRFY) are listed. Only two stocks are up, while six are down.

This was one of my last to make the list of 8 for 2008, and did not show up in previous stories, but investors should take note. Everything we read and hear about the investment climate in 2008 makes one rather tepid about the stock market. One of my friends even suggested to me a few days ago that he was considering going to all cash. That is a bad idea. A better idea is to find investments that will do well in this environment. Loews Corp. (NYSE: LTR) might very well be that company. The stock closed on December 28, 2007, at $49.35.

In a recent news release, Loews announced a plan to spin-off Lorillard. By mid-summer LTR should be separated from this tobacco company and maker of the Newport brand of cigarettes. This will free up some cash for stock buybacks, according to the article, and also from some liability. This might be good news to many but is not the reason I like Loews so much.

The real reason is that in searching out investment opportunities I took an interest in Diamond Offshore (NYSE: DO) as a major player in the search for oil offshore. Well it turns out that Loews is a major shareholder. When I was reviewing insurance companies, which were way down in 2007, and I think oversold now, I came across CNA Financial (NYSE: CNA), which has fallen on hard times and may be a comeback story. Then I learn that Loews owns a major stake in CNA too.

Hey, I admit that I am infatuated with this company and the guy who runs it, Warren Buffett, I just think it has had a good run and I am a watcher at this point, not a buyer. Berkshire Hathaway Inc. (NYSE: BRK.B) was a strong candidate for inclusion on my 2008 buy list, but today is not the day.

I have written volumes about why BRK.B should be included in new portfolios and is a must on every watchlist, but I just do not see it as the bargain I did when I was promoting it at the $3,600 level. Although it does not pay a dividend, most of its stock holdings do, and Warren Buffett has been the gold standard for creating shareholder equity. If 2008 proves to be a shakey year on Wall Street, you may want to own this stock. That however, will be a reflection of the economy more than stock value.

This week it was announced Berkshire Hathaway executed a $4.5 billion buyout of Marmon. Berkshire has done a lot of buying this year. One example being its 8% stake in Burlington Northern Santa Fe (NYSE: BNI) railroad, reportedly now the largest shareholder. At the same time it has been selling other positions and completed its exit from PetroChina Co LTD ADR (NYSE: PTR) prior to a major pullback in Chinese stocks. Berkshire recognized huge gains from this sale, and it is reflected on the company's bottom line.

The headline story in Barron's (subscription required) this week "Sell Buffett" may have created a buying opportunity! I thought that the story by Andrew Barry was a very fair analysis. However, since I wrote Chasing Value: Berkshire Hathaway did what it's supposed to do -- go up! like Barron's, calling attention to Berkshire Hathaway (NYSE: BRK.A)'s stock rise and suggesting investors put it on their watch list waiting for a pullback -- Barron's might have triggered just such a slip.

In Barron's story, they make the case that fair value for BRK.A is probably around $130,000. It was $142,400 at the time of publication. The article suggests Berkshire is overvalued by at least 10%. Guess what, today the BRK.A shares are trading around $133,000, down about 9%.

When I wrote a week before the Barron's story came out, I suggested the same thing they did, but unlike Barron's, I felt that if it came down it would be worth buying, not because it was set to jet in the near future, but because a 10% to 15% pullback gives you the opportunity to add one of the most solid companies in the investing universe to your core holdings at a time when the market is very erratic, and oil, gold, interest rates, food, energy, housing, etc. is in turmoil.

Year-end is almost upon us and I need to get this short list cut down to size with two weeks to go. Because this story is an ongoing process, the heart of the story, the possible stocks, are posted below again, with the latest in bold type as the story builds and I examine things more closely. This week I am adding another energy play in the form of a Canadian Trust. Then I follow with the current edited stock list and the stocks to be cut.

Gallery: Chasing Value: 8 for 2008

In seeking value stocks that have seen their share prices greatly diminished this past year based on reduced earnings, I came across Precision Drilling Trust ADR (NYSE: PDS), which has a P/E near 5 and a dividend yield over 10%. According to AOL Money & Finance information, the company is Canada's largest drilling contractor, with a fleet of 240 service rigs. Its contract drilling units provide drilling services, equipment supply and repair, and on-site catering and management. PDS has extended its reach into the United States this year and has invested in new technology, replaced older rigs and is preparing for continued expansion. Favorable metrics include a low P/B of 1.57 and high historic profit margins of 40%.

PDS closed yesterday at a price of $15.47 per share, near its 52-week low of $15.35, a low set today during the trading day, and 44% off its high of $27.78. The P/E is a trailing figure and is actually higher but the dividend looks secure. For a few more details see: Chasing Value: Precision Drilling for 10% yield.

Disclosure: I have already bought shares of PDS at $17 in several portfolios.

The following stocks have been put in three groups, considering I want to reduce the number to eight. The first group is highly likely to make the cut based on what I know today. The second group is still under consideration but depends on what the value is in two weeks because of current volatility. The last group is being cut, and I noted why.

The Wizard of Westwood, John Wooden reached 97 years young this week and is still brilliant and inspirational. "Old Man" Warren Buffett is 77, 20 years Wooden's junior, and seems to be going strong as well.

John Wooden, who coached UCLA to 10 national championships, retired some time ago to write and lecture. He has been giving inspirational speeches to enthusiastic audiences and still enjoys people and life as much as ever if you have had the pleasure of hearing him lately. This is a good thing, because the rigors of playing and coaching basketball have a time limit due to the strenuous routine and bias toward youth. This is not true of the investing world.

Warren Buffett does not suffer the same limits on his capacity to do what he loves, which is allocate financial resources to the advantage of his fellow Berkshire Hathaway (NYSE: BRK.B) stockholders. He has done so again this year, and BRK.B remains a sound investment.

Six months ago I got all excited about "My pal Warren's" little company and decided it was due for another run when I posted Chasing Value: Berkshire Hathaway -- the time is now . Every investor who is in the market for a while gets to know some companies better than others and this is one I own and have been following for some time. This stock is a Triple-A, large cap that has trounced most everything else for quite some time. However, what suprises me and allows me to make money on it is the frequency with which Wall Street under-appreciates Mr. Buffett and under-values his company. The following is an excerpt from the June post.

• Ooooh yes, Berkshire Hathaway (NYSE: BRK.B) is a value, and it will be all the more so if this market takes a summer swoon, or global markets shift, or big caps take the lead. If you are just starting out and want to have a diversified solid foundation, this is a good stock to start with. You will also be a part of a special club receiving the golden words of Buffett in the annual report, although they are on the BRK website for all to see already.

In August when things were becoming a little more dicey I posted Serious Money: Safe havens -- T-Bills or Warren Buffett? stimulated by the notion that T-Bills had very limited value. Shareholders and long time Berkshire watchers are well aware of the stock pattern for BRK.A / B, it trades in a very tight range for several years while all the while it's earnings are growing, P/E shrinking, and shareholder equity and book value build-up becoming more tempting until the cork pops off the bottle. On June 11, 2007 when I started ranting about the opportunity you could have bought "B" shares for $3,612. Yesterday it closed at $4,905 for a six month gain of 35.8%, or you could have accepted about 2.4% on the T-Bill over the same period -- "guaranteed".

According to an ominous story on Bloomberg.com this morning, the recession is already here. It makes the argument that in many sectors of the economy, corporate profits were severely depressed in the third quarter.

In order to protect the bottom line, many companies have announced wholesale lay-offs in the tens of thousands. They are looking to every department to cut expenses and staff and often just eliminate entire departments. There is no doubt that this shake-out is happening because a day has not gone by in the past six months that we have not read about the falling dominoes of the economy.

The housing market, which was ripe with speculators and dreamers (of home ownership or huge profits) fueled by cheap financing which has disappeared, is now in full retreat. The depressed housing and credit markets were the first to show signs of weakness, followed by mortgage lenders who did not have to announce lay-offs, they just closed their doors. The home builders are not building, and the suppliers like Lowe's Co. (NYSE: LOW) and Home Depot (NYSE: HD) on the retail end and Caterpillar (NYSE: CAT) and USG Corp (NYSE: USG) on the wholesale end are feeling it.

This is going to be a journey ending with eight stock picks for 2008, on December 28, 2007. It is my intention to use the closing prices on that day for those eight stocks as the point of departure to publicly track the results and see if I can beat the market again. This year, as measured through October I have done so. I have also been tracking James Cramer's picks and he too has beaten the market to date, but lags behind me (sorry, couldn't resist). While we made some great picks, we both had some dogs as well. Furthermore, I will be the first one to admit that there is some luck involved in the short run.

Last year I beat the market, earning 29%, and it was my fifth straight year doing so after going down in flames with the rest of you when the tech bubble burst. At that time I also had the pleasure of being an Enron investor as well, so I have made plenty of blunders. But I have learned a lot from my mistakes, and hopefully others can learn from them as well as I share my investing adventures and how I turned things around.

Greed is alive and well on Wall Street and traders sent that message loud and clear back to the Federal Reserve Board and Chairman Bernanke today, by sending the Dow Jones Industrial Average down 362 points, or 2.6%. In a straightforward Dow dropping, but not jaw dropping retort of "What have you done for us lately"? Apparently cutting rates by a half point last month and another quarter point yesterday to 4.5% was not enough.

The suggestion by Bernanke that the Fed might be done cutting and have an inflation- and dollar-protecting bias in the future was not well-received. Add to that Exxon Mobile (NYSE: XOM)'s untimely and unwelcome poorer than expected earnings report and you have the makings for some fear being stirred into the investment cauldron just one day after Halloween.

Seems like more than one immature and impatient trader doing his best impression of Charlie Brown last night felt they got a rock in his treat bag -- and when the traders got back to their desks this morning they were still reflecting on that rock when the markets started to fall like one. The only thing that seemed to bring the slide to an end was perhaps when the closing bell rang, forcing everyone to take their sad faces home.

One of the important reasons to have stock splits when prices get too high is to give the small investor a chance to participate. The recent rise of many company stocks has started to move away from this concept. To the extent that the uninformed private party or small-time speculator is better off not buying individual stocks, this is probably a good thing. Most investors would be better off participating in the stock market through index funds and exchange-traded funds.

This came to mind yesterday as PetroChina ADR (NYSE: PTR) closed at $236.44, meaning that buying a lot of one hundred shares would cost $23,644. This is a lot of money for most people and even for the avid investor, it is a lot to put in one stock. On Monday, Berkshire Hathaway (NYSE: BRK.A) closed at a mere $126,200 FOR ONE SHARE! But fear not -- you could have bought a single one of Berkshire's 'BRK.B' shares for a paltry $4,229.00. "My pal Warren" has elected not to split the shares of BRK - ever! He believes this promotes shareholders to be longer term investors instead of traders. This has worked out to be true -- sort of -- since due to the high share price, very few shares are traded. Berkshire is an anomaly for another related reason also -- it is the largest company that is not included in the Standard & Poor's 500 index, because there is a required minimum volume of trading, and it does not cross that threshold.

A couple of Stanford grads, now young billionaires, who started a company called Google (NASDAQ: GOOG) have decided to follow Buffett's lead and not split its stock either. Google closed yesterday at $620.11, so you must pay over $60,000 for a hundred shares of this stock. Apple (NASDAQ: AAPL), which closed at $166.98, is more likely to split its shares, maybe 2 for 1, from the talk on the Street, but that is just a rumor and it could change its thinking.

Warren Buffett appears to be clearing out Berkshire Hathaway (NYSE: BRK.A)'s portfolio of its PetroChina ADR (NYSE: PTR). shares. Berkshire actually owns the regular shares, not the ADRs. According to Reuters, Berkshire Hathaway has reduced its stake to about 3.1%, and since the required filings with the Security and Exchange Commission happen in the rears, Berkshire Hathaway may have disposed of all its shares by now.

When I posted Serious Money: Berkshire Hathaway (BRK.A) cuts PetroChina (PTR) holdings again, I was under the impression that Buffett had maintained a sizable position in the stock. By most standards, this might still be the case, but as a percentage of what Berkshire held, it is clear now that it has decided to unload the stock, siding with its more vocal shareholders that it had no business supporting a company doing business with a Somalian Sudanese government which has demonstrated contempt for human rights and ignored international calls for change.

Although Buffett has been selling, and others may follow his lead, PetroChina shares remain up significantly for the year, and are near all-time highs now. PetroChina closed at $187.59 on Wednesday, climbing nearly 1% on the day.

Disclosure: I own both BRK.B and PTR.

To find potential opportunities and verify my track record, read Chasing Value or Serious Money.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm.

Today Alcoa Inc. (NYSE: AA) announced some restructuring plans that will trim down (SELL) some under-performing consumer packaging and automotive castings divisions. It will be taking some charges to the tune of $845 million as well, and intends to gear up for expansion into higher margin areas. Alcoa also said it raised cash by selling its 7% stake in Chalco, the Aluminum Corp China ADS (NYSE: ACH) and bringing in $2 billion dollars on what was initially a $200 million investment -- "A ten bagger."

It is this latter decision that is not smart, and without further explanation from management I have to question selling a winner. If you look at all of the things that Alcoa did in the last 10 years you will find that the Chalco investment was the smartest, and more importantly, the most profitable, thing it has done. For many years Alcoa stock has been adrift. Since it sold the stock it has only gone up further and as I write these words and look at the price now, ACH is trading up over 5% more to $75.70.

The Hershey Co. (NYSE: HSY), which is the largest U.S. candy maker, is getting a new Chief Executive, David West, who is moving over from the COO suite. Shareholders will be anxious to see if this suite move really translates into a sweet move for the stock, which is down for the year about 25% from $56.75, closing near its 52-week low today at $44.50.

I have been watching this stock for a few weeks now as I search out what will be valuable in the coming year -- and then going forward for a lifetime. As "my pal Warren" likes to say, the proper holding period for a stock is "forever." Chocolate is a candidate for sure, and Buffett certainly would have to support this notion since Berkshire Hathaway (NYSE: BRK.A) owns a premier American Brand in See's Candies.

Chocolate may be as recession-proof as beer and lipstick, so this company is worth looking at as an investment opportunity. When I review the numbers I see both good and bad. To the good, it is paying a 2.56% dividend yield, which does sweeten the pot (OK, I'll stop that). To the bad, it is facing increased prices for sugar, now competing I suppose with the energy sector (ethanol), ironic since chocolate bars are promoted as energy food. Oil seems to have dipped in the past few days but I'm not sure the demand for sugar will.

Today Google Inc. (NASDAQ: GOOG) is the top Internet search and advertising property there is -- No Question! Yesterday it was something else. Why do investors believe that everything now ends with Google? Have we already reached the end of the internet revolution. Maybe we just think Google has locked up the next stages as well.

Yahoo Inc. (NASDAQ: YHOO) started with two graduate students from Standford University and was all the rage. Google started with two graduate students from Stanford University and now it is all the rage. Do we think Stanford is running out of bright graduate students all of a sudden? I would call them and make an inquiry but surely they would not take me seriously.

Has Google perfected Internet advertising? I don't think so, do you? Will Yahoo, Microsoft Inc. (NASDAQ: MSFT), eBay (NASDAQ: EBAY), News Corp (NYSE: NWS) and all the international players concede an inch of ground more than temporarily?

I am not saying that Google won't eventually conquer the Internet world, (because I do not know) but this feat is by no means as certain as the market currently seems to believe: driving the price of GOOG up $95 per share as I write this story, on no news, in about eight weeks.