Not much good happened in the stock market today and many Wall Streeters probably wish that "The Fed" would meet early -- like now -- not at the end of the month, and drop interest rates a full point. It is not common for the market to drop when oil prices are down, but the market and oil are reacting to the same thing: weak economic data. If oil prices continue to fall it will relieve some concerns of the Federal Reserve about inflation, allowing them to make a larger move.

Today was an ugly day in the stock market with almost everything ending the day lower. I just finished reviewing five portfolios, plus two watchlists, and my seven picks from last year and Cramer's nine. Out of perhaps 100 stocks only one was up, Raytheon Company (NYSE: RTN). That is not much to brag about one in a hundred. That's downright terrible.

When I selected RTN for 2008 I did not have any idea the title would be so fitting Chasing Value: Raytheon in defense of the nation and your portfolio The defense sector has been strong for eight years running and this year does not look to break that trend. The market has done so poorly that any stock just treading water is looked upon favorably.

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.

Raytheon Co. (NYSE: RTN) is a top-shelf defense contractor, and that is the place to be whether we are at war or we have to replace everything that was destroyed, damaged, or become obsolete. I think the defense sector will be one of the safe havens for 2008. The closing price on December 28, 2007, was $61.51.

RTN is a also a tech stock of sorts, if you look at all the advanced electronic systems it is developing and selling. This is another touted sector lately. I am not happy that 85% of its revenue comes from the federal government, but this revenue is from different agencies. Besides defense, RTN makes radios, air traffic control systems and radar, and satellite communications systems, so airports and security are customers too.

Barron's weekly business journal had a cover story on the opportunities in airline stocks and I posted Airlines: Open skies or just that queasy feeling. I do not care for airline stocks, but if the skies over Europe and New York City are crisscrossed with more flights and added congestion then Raytheon's products should be in greater demand. Airport congestion and security constraints are not going away, they are only getting worse.

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 holiday season is upon us and that translates to shopping season. Generally speaking, I hate shopping and refrain from getting anywhere near a shopping mall or mingling with all the shop-o-holics. However, shopping for stocks is different and it is always the season for that.

Finding the best stock values for next year would be a great gift for everyone that is paying attention to my ramblings, that is, if I am able to maintain my track record. This mission was first shared in Serious Money: Hot stocks for a cool year -- finding 8 for 2008. The heart of the story, the possible stocks, are posted below again, because this is a running story. I have bolded the new info as the story builds and I examine things more closely. But before we get to that review I am adding two companies.

The first to be added, and a candidate that has a good chance to be included in the final eight is Newcastle Investment Corp (NYSE: NCT). For the detailed review read yesterday's story Chasing Value: Newcastle's 21.9% yield too good to be true?. I will summarize here by letting you know, I did what homework I could as well as check out NCT's recent conference call. This company has averaged an 8.8% yield over the last five years. However, today because the stock is now a third of it's recent price the yield has jumped to 21.9%. Newcastle is standing by this dividend. Actually I think they have to because REITS are required to pay out most of their profits and they have earned 23% over the last fiscal year.

The stock is down because the underlying value of the collateral has gone soft in some cases, but mostly they have fallen victim to the generally poor market for various classes of loan packages, be they Alt-A, sub-prime CDO's, or uncle Joe's handshake. That said, NCT's cash flow seems fine, it only has 10% of its portfolio in residential real estate and of that they claim to have a 60 day delinquency rate of less than 1%. NCT also expects $1 billion of loan repayments over the next year. The PEG ratio is 0.15 and they are trading at a book value of 0.74. At the conference call they claimed a book value after being marked-to-market of $15 to $16 a share. This is a strong value proposition.

Gallery: Chasing Value: 8 for 2008