Written before yesterday's sharp rise, stock market historian and advisor Jim Stack had forecast an "imminent bottom" for the market. A long-term timer, he is not looking for quick pops and drops; rather, the "safety-first" money manager focuses on slowing positioning his portfolio for long-term, secular trends.

Indeed, in his InvesTech Market Analyst he was among the few to accurately forecast the current crisis; over the prior year and a half, he predicated both the bust of the housing bubble and the derivatives-based meltdown that would result.

After maintaining a defensive, cash-heavy portfolio during the market's downturn, he is now becoming more optimistic, noting, "All of our bearish extremes readings that precede the best stock buy opportunities are now in place."

Stack explains, "How can we put this bear market in historical perspective? No doubt about it, this bear market is a whopper – both in size and severity.

"With a 42.5% loss in the S&P 500 Index, it is rapidly closing in on the big bear markets of 1973-74 and 2000-02. In fact, no bear market in the past 70 years has declined over 50%.

"In severity, this bear has unfolded much faster than past bear markets, wiping out $6.7 trillion in stock values in barely 12 months – equivalent to over 90% of the loss in the 2000-02 bear market in two-fifths of the time

"In measuring impact on investors' portfolios, this bear has 'repossessed' more than 84% of the prior 5-year bull market gains! Both the DJIA and S&P 500 Index are back to price levels seen over 10 years ago in 1998.

"Why has the stock market decline turned so precipitous in the last few weeks? In bigger bear markets, investors always end up throwing out the baby with the bath water.

"We continue to apply our value-oriented principles in selecting new growth stocks as we look for companies with superior profitability and strong balance sheets," says Jim Stack.

In his InvesTech Market Analyst, he and analyst Bruce Morison explain, "Our latest featured investment, Charles Schwab Corp. (NASDAQ: SCHW), is a prime example and stands out as a conservative way to access to opportunities in the battered financial group."

"We are increasing our equity allocation in stocks that should show strong relative performance in a market upturn.

"We continue, however, to be very selective in terms of quality, as well as downside risk. Over the past 20 years, brokerage/asset management firms have produced more than twice the return of the market following a bear market.

"The Charles Schwab brand is one of the most well-known and trusted names in the financial services industry. Its strategy is to be competitively priced, but more importantly to be positioned as the gold standard in client service and integrity.

Money manager and newsletter advisor Jim Stack, well-known for his safety-first strategy, recently added Microsoft (NASDAQ: MSFT) to his model portfolio, noting, "We had wanted to increase our allocation to technology which has typically been a leading sector in new bull markets."

In his InvesTech Market Analyst, he explains, "This stock exhibits all the qualities we look for in a new purchase and is currently selling at a very attractive valuation."

"From its founding in 1975, Microsoft has become the world's largest software company with offices in over 100 countries. Its Windows operating system –which runs on 90% of all PCs currently in use – and for the Windows Office applications utilized by over 400 million users.

"This firm is extremely profitable with company-wide operating margins in excess of 40%. The Windows operating system and Office productivity suite have operating margins averaging closer to 70%.

"The company is completely debt free and generates over $1 billion in free cash flow each month. Management has done an excellent job of utilizing shareholder capital with a return on equity of over 40% compared to an average of 15% for S&P 500 companies.

"The Presidential Election cycle is one Wall Street truism that has historically proven to have merit for investors," explains money manager, advisor and market historian Jim Stack.

In his InvesTech Market Analyst, the advisor reviews the basics of this cycle, its historical merit, and what the Presidential cycle portends for the market's action between now and Election Day.

"Since we are in the midst of an election year, this cycle warrants review. During the 4-year Presidential Election cycle there is a characteristic variation in annual stock market returns that is evident in historical data and actually makes sense when one thinks about it.

"Basically, it boils down to just 'good politics.' Politicians worth their salt understand the goal: get any
bad economic news over early during your term and have the economy back on track and humming along
by Election Day.

"Consequently, the worst stock market performance typically occurs in the first two years after a Presidential Election. The third year, as politicians begin gearing up for re-election, is usually the
best year on Wall Street by a wide margin, and the only year where the average gain in the S&P 500 tops
10%.

Jim Stack is well known for his "safety-first" approach to money management, focusing on a balance between risk and reward. In his InvesTech market Analyst, he notes, "We now see a window of opportunity in Waters (NYSE: WAT).

Here, Bruce Morison, consultant for Stack Financial Management, explains, "In a market overreaction to a weaker-than-expected fourth quarter, an opportunity has been created to invest in this high-quality company at an attractive valuation level.

"The stock dropped 20% when the company reported earnings that were $0.08 shy of the $1.06 estimate that Wall Street was forecasting. The shortfall was primarily a result of a higher-than-expected tax rate for 2007 and weaker sales in Japan.

"The Japan results reflected a change in government regulations for water testing. Our concern over this event is limited given that Japan accounts for less than 10% of the Waters' sales and is not a key growth market for the firm.

"A quick recap of the company ... Waters Corporation is a medium sized company based in Milford, Massachusetts which designs, manufactures, and services high performance liquid chromatography (HPLC) and mass spectrometry (MS) instrument systems.

For 25 years, Steven Halpern, editor of TheStockAdvisors.com, has surveyed the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is one of 100+ ideas in the Best Stocks for 2008 report.

"If investors are looking for value in this market, it's hard to pass up the nation's largest drugstore chain -- Walgreen Co. (NYSE: WAG), my favorite more speculative idea for 2008," says Jim Stack, money manager and editor of InvesTech Market Analyst.

"Over the past 10 years, Walgreen's revenue and earnings-per-share have grown steadily at an average annual rate of 15% and 16%, respectively. Moreover, the company has competitive advantages that should help it maintain this enviable growth record.

"In particular the firm is noted for its customer-oriented philosophy and real estate acumen. It is adept at locating freestanding stores on prime corners, with each site required to meet multiple criteria based on traffic flow, demographics and other factors.

"In addition, Walgreen is innovative. The firm pioneered the concepts of a drive-thru pharmacy and keeping selected stores open 24 hours. It was also the first drugstore chain to offer prescription drugs in multiple languages.

For 25 years, Steven Halpern, editor of TheStockAdvisors.com, has surveyed the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is one of 100+ ideas in the Best Stocks for 2008 report.

"My favorite conservative idea for 2008, Abbott Laboratories (NYSE: ABT), is a leading player in several growing health care markets, offering a wide range of prescription pharmaceuticals, nutritional and diagnostic products, and medical devices," says Jim Stack, money manager and editor of InvesTech Market Analyst.

"The company has a long history of stable sales and earnings growth fostered by its strong research and development program, acquisitions and global expansion. As a defensive health care play, we particularly like the diversification this company provides.

"It derives nearly 30% of profits from overseas markets, while pharmaceuticals account for 44% of sales, hospital products 20%, nutritional products 18% and diagnostics 15%.

"Currently, Abbott is enjoying double-digit sales growth in three of these four major divisions, and we expect this strength to continue at least through 2008. The company is a bright spot in the drug industry, which has been plagued in recent years by patent expirations and meager product pipelines.

"Is Walgreen (NYSE: WAG) ailing?" asks Jim Stack, a fund manager and advisor noted for his safety-first approach to investing. On the contrary, he suggests, "The stock is on sale."

In his InvesTech Market Analyst, Jim and senior analyst Bruce Morison explain, "For conservative, long-term investors, the recent precipitous drop in the stock price provides an attractive buying opportunity."

"Walgreen recently reported their 33rd consecutive year of record earnings and revenues. However, their fiscal 4th quarter profits fell 3.8% from the 4th quarter in 2006. This was the first quarterly earnings decline for the company in nearly 10 years.

"The widely-presumed defensive stock tumbled 15% following the release of the report. Nevertheless, we believe the fundamentals are still intact."

The advisors continue, "The earnings shortfall was the result of lower reimbursement for generic drugs and poor control of expense growth. The 4th quarter's year-over-year comparison on generic drug sales was especially tough given that Walgreen reaped huge profits last year as Zocar, Merck's popular anti-cholesterol drug, became available in generic form in June 2006."

Unlike many who have turned bearish after the market's recent decline, advisor Jim Stack fortuitously moved to a bear market stance in his model portfolio as the Dow was hitting its record high.

At the time he noted, "When the DJIA scores a new record high, yet there are twice as many stocks closing down for the day (as the number closing up), then something is wrong. Declining stocks overwhelmed advancing stocks by a 2:1 margin, an ominous divergence that has never occurred in the past 75 years of market history."

As such, in his InvesTech Market Analyst, he stated, "We are moving to a full bear market defensive mode." Since that timely market call, he has seen an additional warning sign that has added to his concerns.

In particular, he cites a rare "killer wave" signal from the Coppock Curve, a technical indicator developed 50 years ago by Edwin S. Coppock. It can be described as a 'barometer of the market's emotional state.' As such, it moves very slowly and methodically from one emotional extreme to another.

Mainly, the indicator has been used to signal low risk buying opportunities. Stack notes, "Over the past 8 decades, this indicator shows a remarkable track record when it comes to signaling the start of a new bull market for stocks."

I've just returned from the World Money Show in Orlando where more than 10,000 investors gathered to learn about global investing. I had a chance to meet with many of the U.S. and foreign financial experts featured at the show, and over the next week I will share some of their top investment ideas. To view all of the stocks featured in this special global report, click here.

With his conservative yet top-performing long-term performance record, Jim Stack cautions that this is not a low-risk market. Yet, the editor of Investech Market Analyst sees value in the renamed Bell Canada (NYSE:BCE).

"Although our key technical indicators in breadth and leadership are surprisingly bullish at present, we also see recessionary warning flags from a slowing economy, struggling housing market, and the inverted yield curve. As such, this is not a low-risk market.

"Therefore, we've maintained a moderate cash buffer this year and focused on defensive sectors -- in line with our commitment to following a safety-first strategy and protecting our bull market gains of the last three years. One stock that we have chosen to upgrade to a buy is BCE, which is changing its name to Bell Canada Inc.

"As background, the Finance Minister of Canada surprised the market with an official announcement that Canada was planning for the first time to tax dividends on income trusts. The move was aimed at closing a loophole that is costing the Canadian government over C$500 million in lost corporate-tax revenue.