There's a number almost synonymous with investing. It's the P/E ratio. That's Price to Earnings. It's only one number, but it's a powerful one, one that can tell an investor quite a bit about how other investors value a stock. Never buy a stock based on one number, but a good number to start with is the P/E.

The P/E is calculated just like it's spelled. Take the price of the stock (P) and divide it by the last full year's earnings (E). That's what's called the Trailing P/E. It's the most common P/E ratio, the one most investors ask about when they inquire: "What's the P/E?" of a stock.

A second P/E is the Forward P/E. It's the one that uses the projected earnings for next year as the denominator. If analysts are right in their projections for a stock's earnings, this P/E will give you a reading as to the "cost" of buying a stock based on future results.

The stock market, as measured by the Dow Jones Industrial Average, sharply rebounded from its low of 6440 in March of this year. Currently, as this is written, the notable index is hovering around 8400. That's an increase of 30%. Not bad for two months of trading. While the average is made up of only 30 stocks, those 30 stocks are some of the best. There are also some real losers, such as General Motors (NYSE: GM) and Citigroup (NYSE: C). But for the most part, the index contains the strongest industries with some of the strongest stocks. With that kind of recovery already in place, is it too late to buy stocks or is this just the start of a major rally?

What makes a good speculative stock? A great story? A low price? No and no. Stories are fun, but they're no way to invest. A low price doesn't mean anything if there isn't a company with assets or earnings.

My idea of a good speculation is a turnaround situation or a company with high book value selling at a price well below it. Here are five stocks that fit in these two categories.

If you follow the bank stocks, you noticed the latest earnings were very good. Bank of America (NYSE: BAC) showed earnings that almost tripled. Citigroup (NYSE: C) lost 18 cents a share, but that was much better than the 34 cent loss analysts expected, and way better than the $2.44 it lost in the last quarter of 2008. Wells Fargo & Co. (NYSE: WFC) pre-announced it would have great earnings. Then delivered record results. But all of these stocks are well off their recent highs. Why is that?

It has to do with the quality of earnings. In other words, what was the source of this new-found land of profitability or in the case of Citi, lower loss? Investors like ongoing, predictable earnings. In the case of banks, that means loans such as mortgages or credit cards to worthy borrowers. But that isn't where banks got their profits this quarter. Instead, they came from investment banking and trading.

There are always a lot of emotions involved with investing. Most of the time they're fear or greed. Recently it's been outright terror. That's because large amounts of money have been lost. Most indexes for stocks were down between 40% and 50% in 2008.

In the month of March, we saw a very nice rally. There's Spring and hope in the air. But here's the reality: the market is still down 13.3% for the quarter, its sixth straight quarter of losses. The Dow last fell in six consecutive quarters in the period ending on June 30, 1970. It was the worst first quarter in percentage terms since 1939, when the average fell 14.81%. One robin does not make Spring. One month does not make a rally.

Bank stocks are well off their bottoms. Bank Of America (NYSE: BAC) traded at $2.53 on Feb. 20 of this year. Now it's $7.90 as I check the latest quote. Wells Fargo & Co. (NYSE: WFC) was down to $7.80 on March 5. You'll have to pay $17 as of this writing. JPMorgan Chase (NYSE: JPM) touched $14.96 before bouncing to $28. And Citigroup (NYSE: C) (hopefully) bottomed at $.97 on March 5, then ran to $3 as I write this. Is it finally time to start buying bank stocks?

Ted Allrich is the founder of The Online Investor and author of the book: Comfort Zone Investing: Build Wealth and Sleep Well at Night. In this weekly column, he'll offer advice to investors who are just getting started.

General Electric Company (NYSE: GE) at $8.75. Citigroup, Inc. (NYSE: C) at $1.40. Bank of America Corporation (NYSE: BAC) at $4.75. General Motors Corporation (NYSE: GM) at $1.90. Ford Motor Company (NYSE: F) at $1.75. These numbers don't seem possible, but they are. If you're tempted to buy any of them or many other big names (like American International Group, Inc. (NYSE: AIG) or Ambac or Beazer Homes (NYSE: BZH)) that seem to be selling for prices never imagined, here's some advice: Know that you don't know enough to make an intelligent investment decision.

Ted Allrich is the founder of The Online Investor and author of the book: Comfort Zone Investing: Build Wealth and Sleep Well at Night. In this weekly column, he'll offer advice to investors who are just getting started.

Lately I've looked in vain for good news. I mean news that has some substance, that would make a real difference to an investor. I can't find any. In fact, I feel like a pinball, bouncing from one rubber post to another, each one accelerating the downward, inevitable path toward the black hole at the bottom of the board.

Ted Allrich is the founder of The Online Investor and author of the book: Comfort Zone Investing: Build Wealth and Sleep Well at Night. In this weekly column, he'll offer advice to investors who are just getting started.

TARP stands for Troubled Asset Relief Program. You may have heard about it, how $194.2 billion has already been given out by the agency to 317 institutions in 43 states and Puerto Rico. The Treasury is in charge and estimates that 25% of about 8,000 banks may apply for funds. But not all of them will take it. What should investors think about a bank they own that qualifies but doesn't take the money?

Ted Allrich is the founder of The Online Investor and author of the book: Comfort Zone Investing: Build Wealth and Sleep Well at Night. In this weekly column, he'll offer advice to investors who are just getting started.

Two emotions run the stock market: fear and greed. We've seen greed hit its apex in the late 90's when some stocks with profits were selling at more than 100 times their earnings per share. Others had no earnings at all but lots of "eyeballs" (a new metric for dot com stocks). Unfortunately those eyeballs never got monetized, and many of those wonder stocks are names long forgotten. In hindsight, it's easy to ask: why would anybody buy those stocks?

Ted Allrich is the founder of The Online Investor and author of the book: Comfort Zone Investing: Build Wealth and Sleep Well at Night. In this weekly column, he'll offer advice to investors who are just getting started.

Several responses to my columns on 2009 expectations and how to invest for the year have been totally negative. They claim I'm too optimistic. The only way to survive is to buy gold. America is finished. The new administration is socialism. The American capitalist system is done. These readers are not students of history.

America is built on hopes and dreams, fueled by Darwinian survivors of other countries with enough energy and nerve to come to a land of freedom where their dreams can become real. We have been peopled by brave and strong immigrants who gave up everything to have the chance for a better life for themselves and their children.

Ted Allrich is the founder of The Online Investor and author of the book: Comfort Zone Investing: Build Wealth and Sleep Well at Night. In this weekly column, he'll offer advice to investors who are just getting started.

For a better investing year in 2009, think about championship basketball. Winners at every level have one thing in common: defense. It's defense that wins rings. And this year, in the stock market, defense will keep you alive. It will be the kind of year where making a little money makes you a winner. Think defensively until there are clear signs that the economy is improving.

First, keep your expectations low. No one knows when the current economic cycle will end and begin to heal. What we do know is that all indicators keep going lower: housing starts, employment, consumer spending, housing prices. While the market discounts good news well in advance (some 6 to 9 months ahead of the real numbers), there's no indication from any front that better days are ahead. We know the new administration will spend money to create jobs so more spending power will be in the economy. We know there will most likely be tax breaks for companies to encourage production and hiring. But none of that is in place. Investors have to wait and see how and if these develop and what effect they will have on the economy and on stocks. It might take all year. Or longer. If it does, the stock market won't be doing too much.

Ted Allrich is the founder of The Online Investor and author of the book Comfort Zone Investing: Build Wealth and Sleep Well at Night. In this weekly column, he offers advice to investors who are just getting started.

It is the best of times. It is the worst of times. I'm paraphrasing a little from Mr. Dickens, but his sage words still apply. How could this be the best of times? We'll come back to that. First, let's look at the worst scenario for next year.

The Worst:
More mortgages default. With Option ARMs and Alt-A loans and NINJA loans (No Income, No Job or Assets), there are going to be more defaults coming in 2009. That's unavoidable. As loans that were made with teaser rates (rates lower than currently charged so some borrowers could qualify) move up from teaser levels, some borrowers won't be able to make payments because they've lost their jobs or their income isn't sufficient. Expect more credit problems, both in residential and commercial mortgages. Credit card defaults will grow.