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.

Talk about unloved, Headwaters Incorporated (NYSE: HW) is so far down you would think they were a homebuilding hedgefund that wrote their own sub-prime loans and kept them. In the spring of last year this once high flyer was trading at $40, but yesterday it closed at $15.67. That's a wild ride for anyone that held on until now. So here's the good news: now it's a value proposition. Now it's worth looking at. HW was called to my attention many times in recent history but I always felt it was a good company that was too expensive. Perhaps now it is a good company that is being unduly punished.

Before I get into the promising part of the story I want to share my greatest apprehension. Last week the company announced that Chief Financial Officer Scott Sorensen was resigning and it would bring his predecessor Steven Stewart back from retirement to be the new CFO. It is never a good sign when there is a shake up in the CFO's office. We do not know if Sorensen was pushed out to make room for Stewarts return and "stewart-ship" in turning the ship around or that Sorensen is abandoning a sinking ship and Stewart was brought back as the only way to keep the stock afloat. As an Enron loser I will always be watchful of management shuffling.

The stock market has been experiencing a tremendous amount of turbulence over the past three weeks. We have seen wide swings in the Dow Jones Industrial Average ($INDU) of hundreds of points up, and then down, and back up and back down. Today,the Dow had its second-worst loss of the year. If you are losing sleep or getting a queasy stomach over any of this then your portfolio is not right for you. You have made big mistakes in allocating your capital and you need to make a change.

Anybody that has been investing for any period of time has been told to be diversified, or even more simply -- do not put all your eggs in one basket. After each market swing Wall Street prognosticators, be they analysts, brokers, media talking heads or us at BloggingStocks attempts to rationally explain what is happening in the market. Some times the explanations make sense, and sometimes they do not. But, it is important to remember that even when the explanation is rational, plausible, and backed up with a few facts IT CAN BE WRONG!

There are many aspects of the stock market that replicate gambling. The most important one of them all is this: Do not play with money you cannot afford to lose! You should consider diversity of risk and limiting risk to levels that allow you to be at peace with your decisions. Diversification does not mean you need to own a large quantity of stocks or funds. You can be diversified with as few as four or five stocks as long as they are not in the same industry. You can be diversifed in just one mutual fund, if that fund includes diversification as one of its goals.

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.

Barron's (subscription required) has been hyping, promoting, advertising (your choice) and "discounting" it's October 22 conference "The Art of Successful Investing" for weeks and months and I think it is just one more very expensive seminar. For a 'modest' $1,295.00 ($200 discount now available) you can go hear presentations by twelve of Wall Streets finest. Some of them are actually among Wall Streets finest, although I would not include all. You also should figure that since the conference is being held in New York that attending this event will cost you the entry fee again in food, transportation, lodging, and expenses -- probably even more. So unless you can wrangle the money out of your company expense account or government agency job it is not worth it.

They state in the advertisement that it is the "only opportunity to see and hear from these investing luminaries at one place at one time." I do not know why you would want to see them, the ad had their pictures, but as far as hearing their views, Barron's itself includes most of them in their annual round table. Their views are well known and hearing them altogether is apt to be as confusing as it is enlightening. If one is interested in their views they are all published in journals frequently. No doubt they are bright people and might have an insight or two but paying this kind of money is a waste. I would estimate that there is more free information available on the web these days than any seminar can offer. Every business page and every Internet site, plus the writings of Warren Buffett in the annual reports of Berkshire Hathaway (NYSE: BRK.A) would be cheaper and a better use of time. The one exception is if you thought you could make some valuable business contact at this conference. Wandering the halls might be better than listening to the speeches. Finally if you must spend money, create your own financial library. The top 20 investment books of all time would cost you under $500.

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.

It wasn't the bagels burning up, it was the owner.

Before work I often stop by New York Bagel & Deli (NYBD) in Santa Monica for coffee, a bagel and the word on the street. Well this morning I got an earful from my friend Brian Gruntz, the owner, about the pay and severance package Bob Nardelli received for running The Home Depot (NYSE: HD)...before bailing out after failing to increase shareholder value in terms of share price. Hundreds of millions of dollars...for what?

Even though it is almost six months later, Brian still finds it outrageous that Nardelli and other CEOs are rewarded for contributing nothing to their company's bottom line, or shareholders', and often negative results due at least in part to their failure of leadership. Brian went on to rant about a story he read somewhere linking CEO performance and the construction of personal mansions, which start to pop up, like oracles, six months before their demise.

Last week, Aluminum Company of China (NYSE: ACH) had a spectacular time, closing Friday at $42.51. I have been banging this drum all year long to friends, family, our readers and even my broker. I hope some of you made some money. On Friday one of my brokers (and friends) that did one of the transactions at $22.00 called to pat me on the back. He remembered the conversation we had where I exclaimed that ACH was so cheap it seemed impossible. The day I bought it I kept asking, what I'm not seeing, why is this stock which seems like a screaming buy being passed over by the market?

There are many reasons I am laughing about this stock. One is that I wrote Chasing Value: Aluminum Co. of China driving me nuts on May 31, 2007 when Chalco was $32.93, stating that it still looked cheap. I wanted to buy more, but it was hard to do when I was already passed a 50% return in a few months. Well, now it's up another 30%+ and it still looks cheap and I remain cautiously optimistic. (The original story was Chasing Value: Aluminum Corporation of China ADS, which I still think is worth a read today.)

Another reason I am laughing is because the financial powerhouse Goldman Sachs Group (NYSE: GS) upgraded ACH from neutral to buy months later, and Chalco jumped to a new high after Goldman's upgrade. That, after spending how much money on research? They should just read my Chasing Value column (link below) -- they will find loads of bargains.

Yesterday I wrote two stories about Berkshire Hathaway (NYSE: BRK.B) Chasing Value: Berkshire Hathaway -- the time is now and later Would Buffett buy The Home Depot? which stimulated a few interesting comments. One in particular provoked me to think about the fact that Warren Buffett loves companies that pay dividends but does not see fit to pay any himself.

• Rich commented: "I own a few shares of the B class stock and would buy more if only BK
  would pay out some sort of a dividend. I like Warren and Charlie but
  if they live into their upper 90s (which I think that both of these
  tough old ducks will), I and my kids will starve waiting."

When I first read this comment I thought to myself, what's the big deal Rich -- just sell a few shares every so often. Then I realized that this was hard to do with a stock that trades at over $3600 per share for the lower priced "B" shares. It's not uncommon for older fixed income shareholders to unload a few shares of stock that has appreciated to supplement their income to cover expenses. This works great if shares are $25 or $50 or $100 each and you have accumulated a few over the years. However, at $3600 each, how many shares does the average person hold 2?, 5?, maybe 10? This does not allow much flexibility.

Would it make any sense for Berkshire Hathaway (NYSE: BRK.A) to acquire The Home Depot (NYSE: HD)? The Home Depot has been stuck in a very tight range for the last six to eight months, hovering around $38 per share and closing Friday June 8, at $37.95; while most of the market has been reaching new highs. The Home Depot has been the subject of many stories from the January departure of its CEO to the questions about customer service, poor store atmosphere, competition from Lowe's Co (NYSE: LOW), deteriorating employee morale and the effects of a downturn in the housing market.

Given all the problems, The Home Depot has remained a hot topic related to its continued strong cash flow, low stock valuation and book value and low debt that all makes it seem ripe for a takeover or leveraged buyout. The under-valued real estate by itself gets my imagination going because I think it is the most under-valued of all HD's assets and offer the potential for substantial development. While a hedge fund or private equity buyout might make sense to some, I see greater value to Warren Buffett.

There has been a lot of speculation about what BRK might do next. Warren Buffett himself has said a large acquisition is in the cards, not surprising given Berkshire's huge cash reserves. Could it be that Buffett would make this large an acquisition?

If he bought The Home Depot, he would not need much leverage and he might need only buy controlling interest, not the whole company. His association by itself might add 20% to the stock value immediately because it would answer a lot of questions about what direction HD is going in. It would also rectify many of the company's image problems. For Berkshire, it would mean a direct outlet for many of its products like Shaw Carpet, USG Drywall, Acme Brick and Benjamin Moore paint. Berkshire could extend brands further by putting mini Dairy Queens in each Home Depot, maybe an H&R block, and push Geico insurance as well. The Home Depot could be a platform for many of BRK's enterprises.

While the Home depot would be a huge company to swallow for some, it would be a mere snack for Buffett. It could also be the next major catalyst for growth. BRK.A has a market capitalization of $119 billion (approx. 30% cash) and HD's is about $74 billion. Together this could be a $250 billion enterprise. While it might present a huge opportunity, I recognize it might also present to large a risk of upsetting Buffett's apple cart -- but it is an intriguing proposition.

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. Disclosure: I own shares in BRK.B, as of this writing.

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.

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?

The price-to-book value of a company is very important to value investors. It was a major theme in Benjamin Graham's book the Intelligent Investor and it has been very important to Warren Buffett throughout his investing career. Buffett has stated repeatedly that his number one investment rule is to not lose money and that his #2 rule is to remember rule #1.

When considering the purchase of shares in a company, knowing the book value or underlying value, minus any "good will," gives you a foundation on which to place some confidence. The book value is not the same thing as the break-up value of a company, which might be more or less, but they do have a relationship. The most important thing about understanding the book value is to have some idea of what the company is worth in a "fire sale." What is the company worth in its lowest common denominator. Ideally you want to pay something less than, or close to a book value of 1.0. Stocks with very high P/B ratios imply many intangibles and a higher degree of speculation in the stock price.

In Part 1 of this series, I found two possible candidates for my Dow value picks, Alcoa Aluminum (NYSE: AA) and American International Group (NYSE: AIG). Here we review the next five DJIA stocks, searching for further value in light of the frequent new Dow highs. Lately, the Dow seems to be benefiting from the number of companies with growing international business, its higher than S&P average yields (2.3 vs 1.8 as a whole), and the safe haven nature of large caps in a precocious market.

AT&T (NYSE: T) -- Like most of the Dow stocks, T pays a high yield, currently 3.5%, and like the others it pays it consistently. This company is the aggregation of SBC, Pacific Bell, Nevada Bell, Bell-South, AT&T long distance and Cingular Wireless. It is the only one of today's five stocks that I have owned (separately as AT&T and SBC), but I do not own any shares of AT&T now and I do not care to. After all of the expansion done by mergers and acquisitions and only limited internal growth, I am not sure what the upside is.

How much pricing power will the new AT&T have, given ongoing competition in each segment of its business from other wireless carriers, cable television, and VoIP? Considering all of the recent M&A activity, it seems to have relatively low debt and huge cash flow. It also has a P/S, P/B, and P/CF in the lower range of most stocks. But a P/E over 20 is too high given that I do not see where future growth will come from. It seems to me for every competitive battle AT&T might win on one front they may lose an equal amount on another. All things considered, this stock seem fairly priced with limited near-term upside.

I have not written a Chasing Value post for quite a while because I could not find anything to brag about for a couple of weeks, but then I found something hiding in plain sight.

Few things are more plain and simple than drywall. The same can be said for the purity of this stock from a value perspective. I have been watching USG Corp (NYSE: USG) for a while and today I bought it for $52. I should have bought it last week but other priorities prevented it.

Looking at the stock fundamentals I did a double take because it all seems too good to be true. Starting with the following chart, I remind readers that I am not a technical analyst and don't believe in it, however I do look at charts for two features that are best represented graphically and allow you to see the story quickly.

Volumes have been written about Warren Buffett's investment approach and I was thinking that although he tends to share his methodology, he sometimes is not as straightforward as he could be. This is the first in a series discussing my view of Buffett's approach, an interpretation in the simplest terms so that the information is immediately usable.

Although you can make money investing in the stock market many different ways, the person who has made the most money by far is Warren Buffett. Therefore, it seems to follow that every time you deviate from this path, you are reducing your chances of ultimate success.

Consider the following: If Tiger Woods wanted to help you with your golf swing or putting stance, would you say, "no thanks, I know what I'm doing?" If Carlos Santana wanted to show you a few moves on the guitar or Steven Spielberg offered to help you edit a movie, would you tell them to get lost? Not if you were truly interested in improving. For some reason, though, through the years Mr. Buffett has periodically been relegated to the sidelines of the investing world while a multitude of prognosticators claim to have a better way, even here on BloggingStocks. Over the last ten years I have found that the more I learn and the more I align my stock investment strategy with Buffett's approach, the better I do.