The New York Times (NYSE: NYT) is set to report Q1 earnings on Tuesday, April 21. Don't expect a profit. In fact, I wouldn't expect much of anything. After all, we are talking about a company that makes its money off newsprint. Sad as it might be to say, newspapers are fast becoming dinosaurs in the age of digital information.

According to this source, analysts think that the New York Times will lose about $0.04 per share. That's really bad, considering that the same source says that the company was profitable in the year-ago frame, generating $0.09 per share. It isn't surprising though, is it? Not only has the recession destroyed advertising growth in all forms of media, but newspapers simply aren't looked to anymore as the first source of news. The Internet has disrupted that reputation for good.

Last year global stock markets lost $29 trillion in value -- falling 42%. And although it does not get much media attention, there is something that investors can do when the stock market moves against them. They can set stop losses on their stocks which limit how much money they can lose. Specifically, if an investor buys a stock at, say, $20 a share, he or she can issue a limit order which requires the broker to sell the stock when it declines to a lower price, say, $18. Such a limit order would limit the investor's loss to 10%.

This comes to mind in considering why the average stock in my investment newsletter gained 15% in 2008 when the S&P 500 fell 38.5%. My monthly newsletter analyzes broad economic trends and bores into specific industries. It also picks three stocks each month for subscribers to consider. During the first half of 2008, the energy and commodities stocks mentioned boosted its performance to +29% through the end of June. Then the bottom began to fall out as commodity prices tumbled and the financial services industry collapsed.

Thanks to the 2% stop loss rule -- which automatically sells any stock that falls 2% below the price at which it was mentioned in the newsletter -- the low point for the year was -1% at the end of October. By the end of 2008, only four of the 36 stocks mentioned remained in the portfolio. However, thanks to a surprising boost in one stock mentioned at the end of October and the three stocks picked at the end of November, the average stock was up 15% by the end of 2008. What were the three best performers?

It was only seven weeks ago that I posted Chasing Value: Considering Berkshire Hathaway... again. At the time, Berkshire Hathaway (NYSE: BRK.B) was trading around $3,850 for the "B" shares.

Well, I think the time for consideration is over and this morning I placed a limit order for the stock. I think the time is right when stories like Berkshire Hathaway at Lowest Close Since Feb. 2007 and my colleague Peter Cohan's Warren Buffett is not perfect are being trumpeted in the media.

For those who have followed "my pal Warren" Buffett for years, or even decades, these cautionary stories of him losing his edge are as silly as trying to predict where the DJIA will be on a given date. As for Peter suggesting that he was early buying into Goldman Sachs Group (NYSE: GS) or General Electric (NYSE: GE) three weeks ago, well my gosh, it has only been three weeks!

I understand that the prevailing wisdom seems to be running against the buy and hold approach. But three weeks is kind of short to be passing judgment, don't you think? The DJIA is down 42% while Berkshire is only down 31% from its high of $5059.

Perhaps investors have punished the stock because GS and GE are down. Maybe it is because Berkshire has been buying up railroads and that strategy is less important with oil prices falling 55% since the summer high of $147 a barrel. It could also be because people have lost their minds -- who knows?

Is the market getting you down? You want it to go up, right? Well, you better settle in and brace yourself for even harder times as an individual investor. That is, if some pundits are correct about the direction of share prices. According to this CNBC page, a Dow of 8,000 is now in play, and gold might be set to strap a rocket on its back and propel itself up to $1,500 per ounce over time. I'm not sure about the gold, but a Dow of 8,000 almost feels like a logical rest stop at this point (but that might be emotion talking). In the end, none of us can tell the future.

I can, however, share with you a wish. And it isn't just my wish. I'm sure there are others out there who have already said this. And, yes, this wish is coming from someone who owns The Walt Disney Corporation (NYSE: DIS), The Coca-Cola Company (NYSE: KO), and General Electric (NYSE: GE). I own them for the long term (except for a separate trading position in GE which completely failed and may turn into another long-term asset), so maybe this wish isn't so mysterious. I want to go back to that "happy" time of October of '87. I want to see the Dow drop over 20% in one day. Preferably, I'd like to see it drop 25%, on Cloverfield-monster-sized volume. How many points would that be? As of this writing, it would be roughly 2,670 points.

What, am I insane? About as insane as the idiots who decided to become risk sponges, I suppose. In all seriousness, we need a crash. We need a reset, a reboot. We need a lot of panic on the street, and a spiking VIX ($VIX.X), to at least begin a bottom formation. If you think we're going to form a bottom without pain, you're wrong. And if you think, at this point, that we can form a bottom without a crash, well then, I won't say you're completely wrong on that count, but I will say that a crash would be better.

With its stock down more than 40% in pre-market, I am getting the same sickening feeling I had during that week in March when Bear Stearns' stock made its swan dive into an empty swimming pool. As I said yesterday on CNBC's Power Lunch, investors seemed disappointed that Lehman Brothers Holdings Inc. (NYSE: LEH) had not actually closed any capital raising deals.

Now Lehman -- which lost 7% yesterday -- was down over 40% in pre-market. That's because four analysts "widened loss estimates and cut price targets for Lehman," according to Reuters. And Art Hogan of Jeffries & Co. said that Lehman's best hope -- its plan to auction 55% of Neuberger Berman, may not work. "We are not even sure that the auction process for 55 percent of their asset management group is going to work because the people that win the auction need to find the money to buy it," he told Reuters.

I would not be surprised if Hank Paulson is now wondering why he ever took the job of Treasury Secretary. If Lehman stock keeps dropping 40% a day, there won't be much left by the end of the week. I have to believe that there are all sorts of people on Wall Street wondering whether they simply can't take the risk of continuing to do business with Lehman. And if that happens, Paulson will need to decide whether to let it fail, force a merger or bail it out.

The S&P 500 is down 12% this year. But some stocks are doing spectacularly well.

My newsletter, which has been picking three stocks a month for the last five and a half years, has found several of them. This year, it's up 29% so far. That increase is the rise in the average stock mentioned in the newsletter since its initial mention through the end of June. And it uses a 2% stop loss rule which automatically sells any stock that has declined by 2% and charges that decline against the returns.

Here are the three biggest winners:

• Walter Industry (NYSE: WLT) +156%
• Southwestern Energy (NYSE: SWN) +44%
• Chart Industries (NYSE: GTLS) +43%

With oil prices on the rise, these three are likely to benefit. But at some point, their valuations will exceed their earnings growth. So keep a close eye on them.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.

So the big news on Thursday was CBS' (NYSE: CBS) hefty $1.8 billion purchase of CNET (NASDAQ: CNET). Douglas McIntyre already explained why this was such a "weird deal" in an excellent article that you can read here. I'd like to expand on that thinking a bit by asking if it should have been Viacom (NYSE: VIA), as opposed to CBS, in the buying seat.

Remember "old Viacom"? Old Viacom was composed of CBS and "new Viacom", the latter being the Viacom of today. I know, confusing, but that's how things are when a big media conglomerate splits in two. Anyway, there was a general mandate given to both companies, one that basically stated the logic of CBS being an entity that focuses on cash flows and dividend increases while new Viacom would focus on acquisitions to promote capital appreciation of the company's stock. Sure enough, the yield on CBS tells the tale perfectly.

So, I have to ask, what gives? I mean, a check of CBS' latest 10K shows that the broadcaster generated $2.2 billion in operational cash flow in 2007. I think paying $1.8 billion for anything, let alone a questionable asset vis a vis CBS' core media competencies, might be too much given CBS' mission to return a lot of value to shareholders over the long-term in the form of dividends.

Lost in the flurry of activity over the weekend surrounding The Bear Stearns Companies (NYSE: BSC) is this morning's news that Carlyle Capital, the subsidiary of the Washington-based private equity king Carlyle Group, is 'winding up.' MarketWatch reports that Carlyle Capital, 15% of which is owned by Carlyle Group partners, has more liabilities than assets.

It is interesting that Carlyle can't utter the word 'bankrupt' -- instead preferring the innocuous-sounding term: 'winding up.' But Carlyle shareholders will be left with nothing. And, as I posted, since Carlyle borrowed $32 for every dollar of equity, or $16.6 billion, to buy mortgage-backed securities (MBS), the banks who take possession of those MBSs will probably be eager to dump them as fast as possible -- unless they think they will get a better deal by waiting.

But why wait? After all, the Fed lent $30 billion to JPMorgan Chase & Co. (NYSE: JPM) on a non-recourse basis to take over Bear Stearns's MBSs. This means that if Bear's MBSs go bad, the Fed will take the hit. Is there any active market at all right now for MBSs? If so, should the Fed just dump Bear's MBSs and take the hit now? Won't Carlyle Capital's banks do the same? And who will step in to buy all these MBSs? At what price?

Where does this all end?

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.

The Wall Street Journal's [subscription required] David Wessel gets it. His analysis of the problems with the banking system and how to fix them are spot on. He thinks there are three steps to fix the system and I agree.

His three steps:

• Link banker's pay to the quality of the loans they originate
• Improve the quality of bank monitoring to increase transparency
• Stop letting the ratings agencies' clients pay for their ratings

I posted about these ideas last year. In this October 2007 post, for example, I commented on the importance of putting banker's compensation at risk when they originate loans. I thought that if bankers' bonuses were at stake, they would be more careful about the loans they originated. I also discussed the importance of transparency in reporting. And in this August 2007 post, I talked about how the ratings agencies were compromised by the fact that they were being paid by the people they were supposed to rate.

I like Wessel's ideas and I hope his powerful editorial pulpit helps to get them implemented.

Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.

As Peter Cohan discussed earlier, shares of Lululemon Athletica (NASDAQ: LULU) awere down more than 8% [earlier] today. A New York Times article mentioned that the seaweed content of Lululemon products, which are labeled as being made of 24% seaweed, is actually 0%.

According to newspaper, "The Times commissioned its test after an investor who is shorting Lululemon's stock - betting that its price will fall - provided Chemir's test results to The Times."

Short sellers get a lot of grief, but this story provides evidence of why I respect their research so much. Sell-side analysts operate on a research method based on trust; they generally parrot the claims made by management, and have well-deserved reputations for downgrading stocks after they lose most of their value.

If you own one of the following money market funds, you might want to consider whether your money will be there when you want to withdraw it:

• The $16.6 billion Evergreen Institutional Money Market Fund
• The $4.5 billion Evergreen Prime Cash Management Money Market Fund
• Legg Mason Inc.'s (NYSE: LM) $52.5 billion Master Portfolio Trust Liquid Reserves Portfolio.
• The $62 billion Columbia Funds Series Trust Cash Reserves

According to the New York Times [registration required] these four funds own commercial paper -- short term corporate IOUs -- backed by residential mortgages which Standard & Poor's may downgrade. S&P specifically raised questions about four commercial paper issuers for possible downgrades:

General Electric Co. (NYSE: GE) trades at a 4% conglomerate discount. A conglomerate owns many different businesses -- which do not share resources. The rationale for conglomerates was that they allow investors to buy a diversified earnings stream -- when one business is up the other is down and vice versa. In theory this makes earnings smoother.

Finance theory suggests that conglomerates should trade at a discount to the stand alone value of those businesses. The reason for the conglomerate discount is that investors are able to construct a portfolio of stocks that will achieve the diversification themselves. Thus all the overhead needed to manage these diverse businesses under one umbrella adds cost without creating offsetting investment value.

One way to test this theory is to compare the weighted average price/earnings (P/E) ratios of the industries in which GE competes with GE's overall P/E. When I did this, I found that if each of GE's business units was a stand alone public company, its industry P/E weighted by its proportion of operating earnings to the total, averaged out to 19.9. This is substantially above GE's P/E of 19.1, suggesting that GE trades at a 4% conglomerate discount.

Fed Chair Ben Bernanke may be regretting the speeches he gave which tried to comfort investors with the idea that problems in the subprime mortgage market were contained. Yesterday, I posted about how banks, already nervous about subprime loans, are stiffening terms for other borrowers -- like those in private equity.

Today, the Wall Street Journal [subscription required] reports that bad loans are growing in a new category -- commercial mortgage-backed securities (CMBSs). CMBSs are packages of mortgages made to companies which buy real estate for operating their businesses -- such as retail stores in malls. CMBS delinquencies rose 13% in the second quarter to $1.65 billion from $1.46 billion in the first quarter, according to Standard & Poor's, which attributes the rise to overaggressive loans -- e.g., interest-only loans, which allow borrowers to forgo paying down loan balances -- made in 2006, as well as increased problems in the retail sector.

This is the first I've heard of the problem. And it suggests that there is even more trouble ahead -- commercial borrowers took out more loans than than their properties were worth in the second quarter of 2007 -- 117% more than their properties' values to be precise. What is probably going on here is that bankers generate such high fees making the mortgages and selling them that they loosen their credit standards so they can add even more new loans to their portfolios. The problem comes when the unsuitable borrowers can't repay.

Maybe Bernanke is trying to project confidence when he makes these statements. But when reality is at odds with what he says, that confidence evaporates.

Peter Cohan is president of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter.

While the Boston Red Sox are leading the American League East by 8 games, the commodities fund managed by one of its owners is a big loser. In Hedge Funds -- Managed Futures: Changing Course: Becalmed No More [subscription required] Barron's notes that Red Sox principal owner John Henry's commodity fund is suffering a three year, 40% decline in value.

More specifically, On March 31, the John W. Henry & Co. Financial and Metals Portfolio was down almost 20% for 2007 and in the midst of a three-year, 40% slump that was the longest and one of the deepest in its 22-year history. The decline and resulting investor redemptions, cost the firm -- controlled by John W. Henry -- more than 80% of its assets, which now stand at $500 million.

But there is a bit of light at the end of this tunnel. In 2007's second quarter, the portfolio surged 25%. Ironically, Merrill Lynch & Co. (NYSE: MER) ended a long-term relationship with Henry in April and pulled its mostly retail investors' assets out of his fund -- almost exactly at the portfolio's lowest point.

So I'll keep rooting for the Red Sox to repeat their 2004 World Series win. As for Henry, I would not bet my money on his trading skills -- such managed futures funds have high costs, high risk, and heavy reliance on black-box trading systems. I like to sleep at night and don't know how Henry can pull that off.

Peter Cohan is president of Peter S. Cohan & Associates He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned in this post.

Senator Hillary Clinton (D-NY) weighed in on the debate on private equity taxation this afternoon, according to the New York Times [registration required]. And earlier this afternoon, I had my own chance to debate this issue on CNBC with Wall Street Journal Assistant Managing Editor Alan Murray.

Clinton wants private equity firms to pay the same tax rate as working families, rather than the 15% they currently pay. At a rally in Keene, NH, she said, "Our tax code should be valuing hard work and helping middle-class and working families get ahead. It offends our values as a nation when an investment manager making $50 million can pay a lower tax rate on her earned income than a teacher making $50,000 pays on her income."

If she is elected president, Senator Clinton said, she will work to reform the tax code to ensure that carried interest "is recognized for what it is: ordinary income that should be taxed at ordinary income tax rates."

In my CNBC interview, I pointed out that private equity was being singled out because it was flaunting its wealth and its low tax payments -- in other words it was demonstrating that it did not understand how to play politics. Murray suggested that Congress ought to do "what's right" and challenged me to describe a principle for taxing private equity.