Most of the myths regarding market moves are not worth the paper they're printed on. That said, one old wives' tale worth noting, and even following, is the January effect.

For whatever reason, small-cap stocks do indeed outperform their larger brethren during the month of January.

I recently provided a list of 5 Stocks for the January Effect. On the list was a former high-flyer that lost enough market value to now qualify as a small-cap stock -- NutriSystem (NASDAQ: NTRI).

NutriSystem captured the investor imagination with its unique solution to weight loss and weight management. The company's home delivery of prepackaged meals promised ease of use with results.

Given the huge audience for such a solution, NTRI presented investors with a great growth opportunity. Even though it took a few years to catch on, investors eventually got the idea.

NutriSystem became a darling of the momentum crowd in 2005. In the span of a year and a half, the stock moved from the single digits to above $80 per share. Coinciding with a big marketing program, revenue and investors seemed to grow in tandem.

That's all well and good, but at some point valuation does matter. That time usually comes when growth or results fail to meet elevated expectations. For NTRI, that started to happen in mid-2007.

In no time flat the stock lost more than half its value as the momentum crowd fled. The stock has been trading on a flat line around $15 per share for most of 2008.

With all the eating that took place over the last few weeks, it's time to try and shed those unwanted pounds. For those looking to invest based on this inevitable trend, take a look at NutriSystem (NASDAQ: NTRI). The company offers a weight-loss program based on portion-controlled, lower Glycemic Index prepared meals. The stock has certainly shed some girth over the last year, getting trimmed by over 65%.

While you can let me know if you think their meals are tasty or not, at these levels the stocks looks really attractive, sort of like the piece of hot chocolate cake that is staring me in the eyes as I write this! The stock is trading at a PE of just 8.08 and a PEG of 0.44. Their remains a large short-interest on the stock, which is keeping the pressure on, but if the company has some good news, the shorts will have to cover and this could take off like a rocket. At $25 a share, this looks like their will be plenty of upside to the stock price.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. Disclosure: Writer has no position long or short in any stock mentioned as of 1/3/08.

NutriSystem (NASDAQ: NTRI), a weight management and fitness products and services company, is recently down $10.57 to $37 in pre-open trading, some 22%.

• NTRI announced disappointing third quarter results.
  
• Thomas Weisel says: "3Q fundamentals crumble; we expect challenges into FY08."
  
• NTRI overall option implied volatility of 59 is above its 26-week average of 47 according to Track Data, suggesting larger price risk.

LDK Solar (NYSE: LDK) is a manufacturer of multicrystalline solar wafers.

• LDK shares were weak on 10/3 on allegations of inconsistency in inventory reporting.
  
• LDK says: "LDK's management team and board of directors formed an internal committee to investigate the allegations and conduct an immediate physical inventory of LDK's polysilicon materials. The management team found no material discrepancies."
  
• LDK October option implied volatility of 131 is above its 12-week average of 69 according to Track Data, suggesting larger risk.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

As Americans get fatter and fatter, their employers are looking to do something about it. But it seems that most companies aren't just guided by altruism. According to an Associated Press piece, "A study published in April by a group of Duke University researchers showed obese employees had higher rates of workers' compensation claims, more lost work days and costlier medical bills than their trim coworkers."

Even Wal-Mart (NYSE: WMT) has gotten in on the act. In April, I wrote that Wal-Mart was starting a line of self-help classes and group for its employees. In the states where the programs have been launched, 50% of employees have signed up for programs that involve quitting smoking, saving money on electricity, and healthy eating. Group aerobics classes and employee jogs have also taken root at the company.

Some might see efforts at helping employees lose weight as intrusive or big brother-ish. But this is a health issue, and given the employers will ultimately pay the price for unhealthy lifestyles, it's great that they are looking to help employees change.

While it's surprising that Wal-Mart is quietly leading the charge on this issue, it's indicative of the great power that Wal-Mart has to do good when it wants to.

GlaxoSmithKline's (NYSE: GSK) Alli, the first ever over-the-counter weight loss drug approved by the FDA, will be available in late June, almost hitting the market in time for this summer's bathing suit season.

The drug will likely become immediately popular, because it will be FDA tested and approved (unlike Trimspa and Hoodia), but available over-the counter (unlike Meridia and Xenical). Helping it to become a household name is the $150M+ marketing push the drug is getting this year. The advertising has already begun -- I saw an ad for Alli while researching GNC's website for this blog. This should be enough to bring the drug to the forefront of our obese culture's mind. However, the advertising won't be able to keep it there. Only results will.

And unlike past drug treatments for obesity, this one is being very upfront about what it is and isn't. It is not a magic pill, says the website, myalli.com, and the most active ingredient for it to work is you. This is both good and bad for Glaxo. The good news for the company is that they will not be told they are advertising the product falsely -- the website is all about how you have to be ready to change your lifestyle for it to work, and how if you don't, the drug will give you less than desirable side-effects. The bad news is that this is much less likely to be a blockbuster drug if it is not the miracle obesity pill the market has been dying for, which it sadly doesn't appear to be.

All in all, I'd say this is no home run, but a stand-up double for Glaxo. Alli will help those willing to work at it, and strengthen the company's consumer healthcare products segment, fitting in nicely with anti-smoking drug Nicoderm. It will not, if Alli's website is any indication, revolutionize dieting in our instant gratification seeking country.

(On a totally unrelated note, Google ought to sue Glaxo for copyright infringement -- the Alli logo strongly resembles Google's own logo. Although I guess Google would have a tough time with anything like that, with all the heat they are facing since taking over YouTube and all.)

I could stand to lose about 10 pounds. Some people hint that a good place to start would be right between my ears. Mom says if I swallow my pride, that might have some affect. My manager's boss says shedding some arrogance should lighten my step. Personally, I think I just need to reduce the number of ice cream servings I allow myself before going to bed each week. Couple a reduction in frozen dairy treats with an increase in physical romance (my favorite exercise), and I think a realistic weight maintenance program is possible.

In any case, I picked up some good weight loss tips on the internet. A nice blog post on Slashfood, presented to us by Bob Sassone, outlines some remarkable insight he has come upon by doing some research into the dietary self-help books offered at Barnes & Noble (NYSE: BKS). What Mr. Sassone has determined is that diversity is the key ingredient to successful weight loss. Diversity, and lots of it, is what the experts are calling for. At least that's the impression you get if you consider their suggestions collectively.

After reading Bob Sassone's thoughts on the matter, I have reaffirmed my own concepts for successful weight management. Don't eat more calories than you reasonably need, get off your butt to do something, eat a variety of healthy foods and have lots and lots of good lively sex.

I'll also throw into consideration the possibility of swallowing my pride and shedding some arrogance ... ummm ... well ... heck , where would be the fun in that?

Barnes & Noble on the web.