My fellow Americans...hmm, that's overused....and I am not running for anything. HEY PEOPLE... too rude... To my fellow investors, read carefully: WE ARE NEVER LEAVING IRAQ! There, I said it, it's done.

Don't you wish some of our elected officials could tell it to us straight? We are not going to pull out of Iraq this year, next year, in 10 years or perhaps 100 years. Not unless we are chased out (although some locals are trying). It is true that we may reduce our forces over the next four or five years to a third of what we have there now, but we are not leaving. Since we are not leaving, I would like to see the business plan. Everyone has wanted to see the administration's strategic plan for some time, but a business plan will do.

The United States military never left Korea, Japan, Germany, Italy, and has advisors on every continent, just about every place we have ever gone. The only time we've left is when we were kicked out. The Iraqis will not be kicking us out. They need us to prevent an escalation of the civil war. They need our help rebuilding their infrastructure, (which we bombed), and we want to do that!

You all can worry about whatever you want to worry about. You can follow the bulls or bears, day traders or CD holders, Wall Street pundits or the guy next door, it does not matter to me. I am looking for opportunity in the rubble.

If you are a true investor, you have a watch list -- when there is fear and negativity in the market like there has been the past few days, there will be opportunities. It is not a time to jump in with both feet, and it is not a time to speculate. It is a time to pick and choose among the companies and stocks you know well.

I would like to own more Intuitive Surgical (NASDAQ: ISRG) but it has run up so fast it has escaped my grasp, although I sense an opportunity is in the wings. I would like to own more Anglo American PLC (NYSE: AAUK) but it jumped up after recent acquisition talks in the mining industry and has not settled down yet. And it may not, but I will be patient. My regular readers know I love Huaneng Power Intl ADS (NYSE: HNP), which hardly moved today but has come down significantly in the past week, and that is very, very tempting.

This is the fourth update on the stock price status of the first seventeen Chasing Value companies. Closing prices are from September 14, 2007.

The first quarter produced amazing results but the second quarter was downright sad. No one will be surprised to see that anything touching constuction or finance took a bath. I own most of these stocks, so if you do too, I feel your pain. Anyone considering my commentary should "do their homework" too, as James Cramer says on his Mad Money TV show. These recommendations are from the first and second quarter 2007 and I have linked to the original stories.

February 16, 2007: Chasing value: Wells Fargo: Wells Fargo & Company (NYSE: WFC) closed at $35.66 down from $35.76: a loss of -0.02%, even money.

February 23, 2007: Chasing value: Anadarko Petroleum - got it! Anadarko Petroleum Company (NYSE: APC) closed at $50.58 up from $40.84: A gain of 23.85%.

March 3, 2007: Chasing value: Aluminum Corporation of China ADS: Aluminum Corp. of China (ADS) (NYSE: ACH) closed at $60.95 up from $22.98: A gain of 165%

March 20, 2007: Chasing Value: Anglo American - Inflation hedge & more: Anglo American plc (NASDAQ: AAUK) closed at $28.90 up from $24.65: A gain of 17.24%

March 23, 2007 Chasing Value: Cemex and LaFarge look solid: CEMEX S.A. B de C.V. (ADR) (NYSE: CX) closed at $29.17 down from $34.92: A loss of -16.47%. LaFarge (ADS) (NYSE: LR) closed at $37.80 from $39.02: A loss of -3%.

Cemex sank with the continuous reports of the deteriorating housing market in the United States. In the meantime it continues to move forward with the integration of Rinker, the largest supplier of construction materials in Australia. This makes Cemex the largest in the world and sets the stage for continued growth in Southeast Asia. It also is continuing to focus on reducing debt.

Of all the stocks I have written about in the Chasing Value section, I feel that this one suffered the most from guilt by association. I believe it was fairly valued before and it is on sale now. This company, with it's PEG ratio at .83 and lowered, P/E, P/S, P/B (SEE: AOL Money & Finance) has a ROE over 22 and pays about a 2% dividend yield.

My colleague Brian White asked recently whether Google could ever be beaten at its own game. The answer is yes it can, but not easily. He also commented on its strong brand. I believe Google Inc. (NASDAQ: GOOG) can be dethroned if someone develops a better product with an appreciable difference, not just a little better. If that is done then the brand will be meaningless. Otherwise Google reigns supreme.

Branding is much less important in the virtual world than the real world. Google has the most recognized brand in the world (or close to it). Put Google on a bandage and see if it beats Johnson & Johnson (NYSE: JNJ). Put it on tax software and see if it beats Intuit Inc. (NASDAQ: INTU). I doubt whether the brand would work on shoes or shirts either unless there was the superior product to back it up. Otherwise the brand would be hurt.

It is about strength of product and the world it operates in. If a stronger competitor comes along the brand will mean no more than it did to every other search engine that Google beat out....which is all of them...combined!

Those of you who are new to BloggingStocks can check out my other stories and read Chasing Value or Serious Money to find more potential opportunities and verify my track record as well.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He is on the advisory board of Internet start-up CircleBuilder.com.

According to an article published by Bloomberg Cheapest Stocks in 16 years draws investors, "Investors are preparing to snap up shares of telephone, health-care and computer companies after last week's $2.1 trillion global stock market rout left U.S. equities the cheapest in 16 years."

I am always pondering stock valuations in search of bargains and have been thinking that there are many bargains to be had. Having come to this conclusion though is not based on the relative market strength or weakness, or whether the over all market is cheap or not. I am not interested in bear markets or bull markets. The average investor should view all markets and promoters of said markets as full of bull. The best way to invest in stocks is the same way you invest in friends - one by one, respectfully, fairly and refraining from judging the proverbial book by it's cover. You should look deeper and think long term.

Some companies have reported terrific earnings Intuitive Surgical (NASDAQ: ISRG), Apple Inc. (NASDAQ: AAPL) and some have been lackluster Johnson & Johnson (NYSE: JNJ). Some have been dismal like housing stocks Pulte Homes (NYSE: PHM) and Toll Brothers (NYSE: TOL). While one could make the argument that stock valuations are at a low point there is more to the story.

Since valuations -- think price-to-earnings (P/E) ratios -- are at a cumulative low, and the market prices stocks based on future earnings and growth of equity potential, then one has to assume the brokerage houses, investment banks, hedge funds, institutions and the like have priced in a continuation of the same low interest, high liquidity conditions that lead to this economic situation. I do not have such clarity in regards to this future.

Maybe the headline should not read "Stocks are the cheapest they have been in 16 years", maybe it should read "Large investors are more tenative than they have been in 16 years". After all look how fast they were jumping ship last Thursday and Friday. In any event, I will continue to write about specific opportunities and resist characterising the over all markets.

Most investors probably think that when an investment ratings service like Moody's, Standard & Poors or Fitch gives a company, financial institution or security the highest rating of "AAA," it carries the least possible level of risk. Most investors would think that this rating would be reserved for United States Treasuries and only the most secure of companies like Berkshire Hathaway (NYSE: BRK.A), Johnson & Johnson (NYSE: JNJ), or United Parcel Service (NYSE: UPS). Actually, this happens to be the case, and these companies are among the very few to receive AAA ratings outside of financial institutions.

So what happened in the case of the Collateralized Debt Obligation (CDOs), where the ratings agencies determined that high-risk securities batched together had a smaller chance of default than the individual securities? Perhaps that is the case, but triple-A? Well, it seems to me that large investment banks knew they needed the AAA ratings to have a marketable security. They went to the ratings agencies that understood this and the agencies created the rational or plausible deniability to support the rating. This may be a bit harsh, but it does seem that the ratings agencies were working in reverse: first establish the rating and then the support for the rating. The ratings services are all heading for cover and many of the previously AAA-rated securities are being re-evaluated.

The last trader makes the market that's who. Think about the fact that most shares of any stock are not available. They are not for sale. Naturally rapid escalation in a stock's value does bring more shares to the market, but in general most are not for sale on any given day. In particular, stocks in the Standard & Poors 500 are part of an index that many funds must hold as part of their agreements with their customers.

Some of my older stock holdings include Harley Davidson (NYSE: HOG), Intuitive Surgical (NASDAQ: ISRG) and Johnson & Johnson (NYSE: JNJ). I did not buy them for short term gains and do not anticipate selling any time soon. In the case of JNJ, one of the most widely held stocks and most respected companies in the world over the last hundred years, there are a large number of people, pension funds and investment managers that feel the same way.

Sometimes it is not even day traders or 'market makers' that are the last trade. It might be a promise to trade as with options. Here is another interesting thing to think about. If on a given day 5% of a stock is traded down than 95% of the shareholders lose value and had no say. The next day they are traded back up and again 95% of the shareholders are just along for the ride. The stock quotes you read are set by the minority, not the majority of shareholders.

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.

Buffett will not be able to turn BRK.A or B into a 10-fer or a 5-fer over the next few years, but he can beat the overall market, and if he does it again it would surprise no one. According to AOL Money & Finance, this stock has a P/E three points below the DJIA, a low enough P/S and P/B that would make it pop-up on all my stock screens (except that I want dividends so it never has), consistent expansion of its ROE, and low debt -- and that spells value to me.

• Price-to-earnings P/E: 14.92 (TTM)
• Price-to-sales P/S: 1.71 (TTM)
• Price-to-book P/B: 1.55 (TTM)
• Price-to-cash-flow P/CF: 14.03 (TTM)
• Return-on-equity ROE: 11.02 (TTM)
• Long Term Debt-to-Equity (MRQ) 0.3
• Dividend Yield 0.0%

This five year chart is indicative of a pattern with BRK.B (B-Shares are almost affordable, A-Shares are not) where the stock trades in a tight range, moves up to catch up with earnings and equity expansion and then trades within a tight range for a few more years. My rationalization for this is that the stock is as boring as Buffett's acquisitions (his famous words) and because of its high share price, low trading volume (it does not even meet S&P threshold for inclusion) and lack of startling press releases, there is always a time lag between the build-up of equity and the market's appreciation of same. However, at the first sign of market weakness this safe haven may jump off the $3600 share price it has been straddling for almost a year.

This will conclude the whittling process of the 30 Dow Jones Industrials with the last six below. Although the Dow has done very well in the last six months there still appears to be plenty of value here from everything I am able to surmise.

So far I have whittled the Dow down to six stocks: Alcoa Aluminum (NYSE: AA), American International Group (NYSE: AIG), Caterpillar Inc. (NYSE: CAT), The Walt Disney Company (NYSE: DIS), Exxon Mobil (NYSE: XOM) and The Home Depot (NYSE: HD). You can link to the previous posts, Part 1, Part 2, Part 3, Part 4 or Part 5 for your own review and comments.

Pfizer (NYSE: PFE) is a tough one for me to review because there are a lot of mixed signals in the data and the market about Pfizer concerning its pipeline of products. Most notably it has a P/S of 4.14 (TTM) which would place it outside of my consideration by a factor of two under most situations. This is a result of declining sales, but the decline has not hurt earnings in a big way, so the P/E has been coming down as a result. The P/E is about average for the DOW but historically low for Pfizer. If the "pipeline" is truly bare then this trend will continue. However, the stock is supported by a 4.2% yield, almost no long-term debt, and trailing margins that are HUGE at about 40%. Back to the less than appealing issues: PFE has a price-to-cash-flow ratio of almost 15, too high for me. In the long run Pfizer may be a great hold. If you are looking for a solid dividend payer with resistance to much downside risk it would be great for your Roth IRA, but here and now, it might be a short term value trap. In the absence of an acquisition or great new drug where is the upside?

Chuck Prince at Citigroup Inc. (NYSE: C) has been under increasing pressure to 'do something' to increase shareholder value after years of no price appreciation in the value of the company despite many attempts including the buying and selling of many companies, reorganizations, expansions, contractions and numerous meetings with major shareholders to express his ideas and get theirs - and still nothing. Some have suggested breaking up the company which is currently the largest financial institution / bank in the United States, but that does not seem to be in the cards. Now to be fair other ultra-large cap stocks (Citi is $254 billion) have made little progress in growing share value over the last few years and some have gone down; General Electric (NYSE: GE), Johnson & Johnson (NYSE: JNJ), Wal-Mart Stores (NYSE: WMT) and 3M Co. (NYSE: MMM) to name a few.

• Melly Alazraki reported on Wednesday that Investors awaited Citigroup Inc.'s restructuring announcement today. The originally expected 15,000 jobs, was yesterday reported to have increased to 26,000. Well, the Citi released its plan and it contains 17,000 job cuts, or 5% of its workforce as the company seeks to lower annual expenses by $4.6 billion in the next three years. However, the 26,000 jobs reported yesterday said "fired or reassigned," and indeed Citi announced that "more than 9,500 jobs will be moved to lower-cost locations."

Every big company has some "dead weight." However, where did they discover these people they say they no longer need, hiding under desks? Sleeping in the closets? Not the executive washroom prey tell?! How did all these "dead beats" hide for so long? What will the costs to the company be in the short run? Most importantly, firing lots of people is not necessarily any more of a strategy than proposing a troop surge in Iraq. They both can have an impact but I'm not sure it equates with being a strategy. The strategy should be to sell or spinoff any enterprise that is under performing immediately and expand those that are performing well, even if it means you do not remain the largest bank. No magic there -- it's the Jack Welch formula, it works, try it!

Furthermore, here is the leadership question; has Citigroup been operating inefficiently for years with too many unnecessary people and just now come to that realization? - not good, or have they decided that they will struggle along with less people and offer less in services internally and to their customers? - also not good! So I think I have to pay homage to my dad again, who often reminds me that "the fish stinks from the head" -- It's time to go Chuck!

Sheldon Liber is the CEO of a small private investment company and the vice president for design and research at an architecture & planning firm. Check out my other posts for BloggingStocks here.

This week Alan Abelson, in his Barron's, Up & Down Wall Street (subscription required) commentary on the upcoming IPO by the Blackstone Group there was much to be cynical about. In reviewing the lengthy 200+ page prospectus he chortled at the 30 pages listing all the risks of investing.

The most amazing of disclosures was this: "Our general partner and it's affiliates have limited fiduciary duties to us and our common unit-holders, which may permit them to favor their own interests to the detriment of us and our common unit-holders" Can they state it any clearer than that - this is all about our opportunity, not about yours!

Last Sunday I called readers attention to this in less blatant terms when I posted: Sunday Funnies: Blackstone looking for more green and raised many questions as to why they need to do a public offering now? While Mr. Abelson and I are cynical about this IPO, we are no more cynical than the managers of the Blackstone Group who are taking advantage of a what might be a frothy market place.

Mr. Abelson, who I find provides one of the richer reads each week has been very worried about the frothy market for over a year now and each week marvels at the overall strength of the market with very bearish undertones and outright bemusement awaiting it's collapse. On this perspective I cannot agree. Abelson is wrong - he will be right someday - but not today, and there are many reasons.

• The mountains of cash in corporate coffers is higher than it has ever been since I have been investing over the last few decades.
• Many largely capitalized companies have been building shareholder value for the last five years and their stock prices have been relatively stagnant. There is no froth in General Electric (NYSE: GE), Johnson and Johnson (NYSE: JNJ) or Microsoft Corp. (NASDAQ: MSFT) and furthermore even Google (NASDAQ: GOOG) which may be over priced, is a much greater bargain this year than last, while it's earnings have started to catch up to it's prolific stock price.
• There are numerous companies in the market at fire-sale prices and all you have to do is look at my Chasing Value or Serious Money columns to find them.
• Demand and opportunity in China, India, Russia, Brazil, and eastern Europe has never been higher and if it slowed to half the current level of GDP growth would be double that of the U.S.
• Interest rates have been raised significantly over the last few years and are still at historic lows worldwide providing liquidity for investment and expansion.
• The market did not shoot up over the last four years as it did leading up to the bursting of the bubble that preceded it and if the market weakens it will do so slowly not with a burst. We might get to a point where we see a droopy market but not a collapse of equities.

If you want to see a real frothy market take a look at campaign fund raising / financing / spending, and the like. Among the presidential hopefuls, Democrats Clinton, and Obama have exceeded the $25 million mark and Republicans Giuliani, McCain and Romney are all expected to reach about $20 million. Since there will be only one winner unlike the stock market, look for more collapsed dreams here than anywhere else. The real winner will be the advertisers and the media that will be relieving them of the funds. Perhaps that should have been another positive for the market - I should have singled out the media companies that are licking their collagen inflated lips.

Disclosure: I own shares of JNJ.

Sheldon Liber is the CEO of a small private investment company and the vice president for design and research at an architecture & planning firm. Check out his other posts for BloggingStocks here.

When I reached my 100th post I wanted to mark the occassion with something special, and I did by examining some of the quality companies that had withstood the test of time for more than 100 years: 692 years strong: Citi, BUD, AT&T, JNJ, & UPS.. This being my 200th post I tought about reviewing companies that have been around 200 years,

But then I got a better idea. I have been working on the railroads. Not literally, but as potenial investments. A few look very interesting.

I ran the seven major U.S. freight railroads through my own screening process. In the past month I have looked at CSX and NSC but did not take any action except to add them to my watch list. My first screen was for low price-to-sales P/S and low price-to-book P/B ratios in search of a deep value opportunity.

• Burlington Northern Santa Fe (NYSE: BNI) P/S = 2.04, P/B = 3.02
• CSX Corp (NYSE: CSX) P/S = 2.03, P/B = 2.08
• Florida East Coast Industries (NYSE: FLA) P/S = 4.7, P/B = 3.18
• Genesee & Wyoming'A' (NYSE: GWR) P/S = 2.37, P/B = 2.19
• Kansas City Southern (NYSE: KSU) P/S = 2.02, P/B = 1.75
• Norfolk Southern (NYSE: NSC) P/S = 2.29, P/B = 2.21
• Union Pacific (NYSE: UNP) P/S = 1.82, P/B = 1.9

After reviewing the P/S and P/B ratios none of these stocks seemed like a deep value. The first one to be cut was the Florida East Coast Industries. FLA is up 18 percent over the past year and is near its 52 week high of $65.15, closing Thursday at $63.36. A value it's not. It also holds commercial and industrial real estate and is one of the smaller lines.

Next, I examined the return on invested capital (ROIC), which is indicative of how well management is allocating company resources. I also looked at whether the company pays dividends. Dividend paying stocks historically have outperformed over time.

• Burlington Northern Santa Fe (NYSE: BNI) ROIC = 12.79, Yield = 1.22%
• CSX Corp (NYSE: CSX) ROIC = 10.78, Yield = 1.18%
• Genesee & Wyoming'A' (NYSE: GWR) ROIC = 19.36, Yield = None
• Kansas City Southern (NYSE: KSU) ROIC = 6.47, Yield = None
• Norfolk Southern (NYSE: NSC) ROIC = 11.08, Yield = 1.72%
• Union Pacific (NYSE: UNP) ROIC = 8.87, Yield = 1.36%

Though the Kansas City Southern did pretty well on the first cut, with no dividend and a ROIC that is not any better than a high quality corporate bond, it didn't make this cut. I considered cuttting Genesee & Wyoming since it has no dividend but it's ROIC is so much higher than its peers that I left it in for the next round.

I then reviewed the price-to-cash-flow, P/CF and long-term-debt-to-equity ratio. If you read any commentary from Warren Buffett you will learn that he looks for strong cash flow as a sign of success and resists investing in companies with a lot of debt.

• Burlington Northern Santa Fe (NYSE: BNI) P/CF = 9.6, LTD/E = 0.7
• CSX Corp (NYSE: CSX) P/CF = 9.02, LTD/E = 0.7
• Genesee & Wyoming'A' (NYSE: GWR) P/CF = 140.48, LTD/E = 0.5
• Norfolk Southern (NYSE: NSC) P/CF = 10.05, LTD/E = 0.7
• Union Pacific (NYSE: UNP) P/CF = 9.89, LTD/E = 0.4

A clear picture seems to be developing here that the 4 major railroads seem to move in lockstep while the regionals have some anomalies. GWR didn't survive this cut. I do not know why it has such a wacko P/CF, but another thing Buffett has said is he does not like to work to hard to figure out what's going on with a company and GWR is an example. There are too many other opportunities.

I saved the illustious price-to-earnings (P/E) ratio for last for good reason. I never use the P/E in my stock screens. The other factors are more important in detemining future success. When I do look at the P/E I often compare it to the return-on-equity, ROE ratio. I might except a high P/E if the ROE is even higher.

• Burlington Northern Santa Fe (NYSE: BNI) P/E = 16.2, ROE = 19.48
• CSX Corp (NYSE: CSX) P/E = 14.77, ROE = 14.75
• Norfolk Southern (NYSE: NSC) P/E = 14.56, ROE = 15.7
• Union Pacific (NYSE: UNP) P/E = 17.63, ROE = 11.19

Looking over the path we have taken it is time to let go of the Union Pacific. It is a stable company but I see no opportunity here that is not broadly available. The P/E ratio is at the market average and the ROE is just too low. That combined with the lower ROIC, and the fact that they seem to be having trouble finding places to invest, and are not building shareholder equity in any meaningful way.

After this very basic review it seems that BNI, CSX, and NSC are worth puting on your watch list, I will add BNI to the two others on mine. The closing prices Thursday were BNI: $82.72, CSX: $40.96 and NSC: $50.98. I think there will be changes in the industry over the next five to ten years. All three could be merged with larger companies or acquired for there substantial real estate holdings and rights-of-way, or aggregated with a major shipping company or trucking company. There are a lot of possibilities.

Time to start on my next hundred stories.

Disclosure: I own JNJ and UPS.

Sheldon Liber is the CEO of a small private investment company and the vice president for design and research at an architecture & planning firm. Check out his other posts for BloggingStocks here. the most recent are: Chasing down 007 picks: Q1 is done - Valero is tops and FedEx: When is a downgrade an upgrade?

It is hard to believe that the Johnson & Johnson (NYSE: JNJ) company might be a value stock soon.

When entering any discussion or analysis of quality companies or stocks over the last 100 years, it is a relative certainty that JNJ will be included. This would be true whether you were considering the company history, quality of management, quality of products, diversity of products, market opportunity, investing in North America or internationally, and more. The stock is probably included in almost every index, mutual fund and portfolio that it qualifies for by both institutions and private individuals. I own it in my Roth IRA, and unless the world turns inside out and upside down, I'm not selling; and you probably could make an argument that you should not sell then either!

For all of the above reasons, Johnson & Johnson is one of the "safe haven'" stocks everyone will run to in a shaky market. A lot of investors are watching it now thinking that the time might be approaching to buy JNJ on the cheap. The problem is that this large cap stock ($178 billion) does not fly below the radar, it is one of the biggest lights on the screen. JNJ's closing stock price Thursday April 5, 2007 was $61.55; the following were its stated metrics:

There are few people reading this story that do not know about the quality of Procter and Gamble (NYSE: PG) -- the company or the stock. In the first of my new chronicles titled Serious Money: GE, JNJ, PG, PEP or index funds?, several people commented about PG or asked me about it privately. Let me start by saying this is one that you should have on your watch list but I do not think it is ripe for picking at this time.

The stock is not only near a 52-week high but an all-time high, so no matter the quality of the company, caution should be exercised. It closed Friday at $63.80 having reached $66.33 on January 19, 2006. Oddly the stock collapsed in sympathy with the rest of the market March 2000, and a year later after rising 30% it fell back to the same place at around $30. Over the next five years, as you can see, it retraced its steps of the previous five years, and then some.

Warren Buffett has acknowledged investing in Johnson & Johnson (NYSE:JNJ) and the Procter & Gamble Co. (NYSE:PG) in the past few years. Among all the endorsements a company could possibly get, this is better than a 5-Star rating from Morning Star and a a boooyaah! from James Cramer combined. Of course, Mr. Buffett's choices are far more limited than yours or mine, given the size of Berkshire Hathaway (NYSE:BRK.A), the vessel he is navigating that could have been included in this review as well.

I was looking once again at large, well diversified companies that are broadly held by institutions and individuals alike that most investors would generally agree are safe havens. To round out the discussion, I have added General Electric Co. (NYSE: GE) and PepsiCo Inc (NYSE:PEP). There are several others that could be added to this group but I have enough for this post's purpose.

The question is whether investors are better off buying into a few broadly held index funds or better off holding a few dividend paying large cap stocks? I am a firm believer in keeping at least half of the money you save, invested in the stock market, placed in indexed mutual funds, or exchange traded funds with low fees and low stock turnover, minimizing short term capital gains.