There are only seven weeks left in the year, so it is time to start thinking about 2010. If you have been keeping up with my 2009 picks (see: Chasing Value: 2009 blazing picks -- Q3 review ) than you would be aware that the group is up 40% through the third quarter.

This year I bought all of my picks so that I would be riding in the same ship as anyone that might have considered my suggestions.

I will be breaking up my potential picks into three categories; contender, on the fence, and out of the running, until I finalize the list in the last week of the year.

The market continues to befuddle the bears as the third quarter earnings and stock prices continued to move in a positive direction.

During this period Washington has taken charge of the auto industry and helped prop it up with the "cash-for-clunkers" program. They continue to subsidize the real estate market with first-time home buyers incentives, and very low interest rates. The banks are being refueled by the Federal Reserve with interest rates as low as zero, while all the time currency stability has been sacrificed. This has driven gold prices to new highs.

This is the third review of my 2009 stock picks through September 30 (see: Chasing Value: 9 picks for 2009 -- APC, GE, ISRG, WFC and more). This years picks have annihilated index comparisons, so much so that I must attribute some of my good fortune to luck. However, I do believe the original reasoning was sound and the outlier nature of the gains certainly a result of an oversold market living in fear.

One of my wonderful friends, Ms. P, asked me for some guidance on how she might allocate $50,000 currently earning peanuts in a money market account. Though she is decades from becoming a grandmother, after a brief discussion about her financial parameters, it became clear to me that she was looking for a "granny fund."

In reality, my recommendations would be suitable, and perhaps desirable, for many passive investors as well.

The $50,000 is a portion of money Ms. P has set aside to purchase a home, which might happen in six months, but could also be pushed out further, depending on the economy and her situation. Basically, she wants to cover all her bases because she might need the money at any time and does not want to be caught short, while at the same time she would like to generate some revenue without taking any big risks.

This should not shock anyone that has followed the market for any length of time or is simply a student of human nature, but Diageo PLC (NYSE: DEO) the largest distiller and distributor of alcoholic beverages in the world is moving up when the market is moving down.

The London Financial Times under the headline Markets are giving the devil his due reports on two new independent US academic studies by Frank Fabozzi, a finance professor at Yale, and Harrison Hong, a Princeton professor, touting the benefits of investing in "sin stocks" associated with alcohol, tobacco and gaming. They surmise that many pension funds, and conservative investors "looking to maintain an aura of respectability." do not invest in these types of companies leaving them to others. These companies also tend to be more highly taxed and regulated, which limits competition somewhat.

Anybody have capital gains to show this year? I didn't think so. Not unless you were shorting the market, and in particular financials. I got clobbered with everyone else. There were not many places to hide. Picking winners was like guessing where each piece of debris would land after the tornado moved through town.

The average crystal ball is looking quite foggy about now, nevertheless I have rummaged throughout the stock market to select nine stocks that I think offer more reward than risk. The market is priced for the worst in so many cases that I think the list could have included 50 companies without too much trouble.

In 2007 and 2008 I owned some but not all of the picks for the year. This year I own all of the stocks and they were all acquired in the latter part of the fourth quarter for a new portfolio.

Most mergers are driven by the notion, sometimes wildly mistaken, that the combination will bring both a competitive advantage. Some pairs of companies, however, seem so intuitively right for one another, no bottom-line considerations should be allowed to interfere with their matrimony. Like an empty rental and a copper thief, these two seem drawn together.

The leader in the mortgage meltdown, Countrywide Financial (NYSE: CFC) managed to leverage its bon-homey, don't-ask-don't-tell lending policies into a corporate disaster. Where, you might ask, can it turn to make lemonade out of these lemons?

To answer this I asked myself, what do people do when the mortgage bill is greater than the sum of their paychecks, savings, hockable goods and child's piggy bank? Usually, when the going gets tough, the tough go drinking. Who, then, would be a better partner for Countrywide than distilling giant Diageo plc (NYSE: DEO)?

The newly dispossessed won't be drinking alone, either. With the CEO selling off his holdings, the SEC reviewing the company's stock option awards, and massive layoffs through the industry, millions of us with a piece of the mortgage business could use a stiff shot of J&B with a Guinness chaser.