Last week's column gave five questions for investors to ask before they buy or sell a stock. Here are five more to help start any research. They'll help save a lot of time and more important, money and loss of sleep.

6. What is Price to Book? This measures the price you pay compared to the amount of equity that's in the company. Equity is all the money investors have put in plus all the profits. When you can find a company that is selling for a Price to Book of less than 1, it means you are buying the equity in the firm for less than it's worth. It's like buying $1 for less than a dollar. Hard to find these stocks? Not now in the Financial sector. Look at Bank of America (BAC). It's Price to Book is 0.54. That means you're paying 54 cents for every $1 of equity. Of course, investors think there could be many more charges against that equity before the bank stabilizes, but if they're wrong, an investor might be picking up a real bargain here. Other examples: JPMorgan Chase (JPM) at 0.89; Citibank (C) at 0.74.

Start with a few speculative stocks. Add a distressed-debt corporate bond portfolio, and two quantitative-based hedge funds, and a momentum-based hedge fund for the British pound/Japanese yen currency pairing.

Sounds like a typical, assertive portfolio for a wealth management group or, perhaps, for an accredited investor.

But a public pension fund?

Public pension funds in the United States are increasing bets on high-risk hedge funds and real estate in an attempt to fill deficits in retirement plans and recover ground, due to the worst performance by pension funds in six years, Bloomberg News reported Thursday.

Public funds, which manage more than $2.45 trillion in assets, are trying to reverse losses averaging 5.5% for the year ended June 30, according to Merrill Lynch data, and stem the tide of deficits, Bloomberg News reported. The State of New York's comptroller is asking its Legislature to increase its alternative investment spending cap; in February, the State of South Carolina upped its alternate investment / private equity / real estate cap to 45% from 0%.

'Investment distortions of the very worst sort'

Economist Glen Langan told BloggingStocks Thursday he doesn't like the sound of the new stance by state / local governments, if the aforementioned represents a trend.

"I view it as another manifestation of the U.S. stock market slump," Langan said. "The underperformance of stocks and the drive for outsized return on equity is leading to investment distortions of the very worst sort. We saw this in the mortgage market with their securities. It got to a point that if the interest rate was high enough, banks made the loan. We've seen it in oil, where the unattractiveness of stocks led institutions to dive into oil futures, driving up prices well above historic gains. And now it looks like public pension funds are catching the bug or flu."

That things aren't going well for the economy, the informed investor / reader does not have to be reminded about.

You don't need to be a financial editor with a Ph.D. in international economics to detect that.

Or, as CNN's Larry King would say, "For this, he went to school?...To tell me that things aren't going too well for the United States, these days, economically?"

Further, you can cite a dozen or more statistics that can give you a pretty good evaluation or thumb nail sketch of the U.S. economy's health - - gross domestic product, or GDP, being one of the best - - and prudent investors / traders monitor them.

But if you want a quick, summary indicator - - a snapshot of the health of the U.S. economy in-an-instant, if you will, check one index: the Dow Jones Industrial Average - - the most cited and widely recognized stock market index in the world. It's also still the most important stock market index in the world.

The industrials set the tone

During faddish or frenzied times or during the financial world's latest fascination with a new sector or sector index, Wall Street veteran Michael Metz, chief investment strategist at Oppenheimer & Co., undoubtedly will be seen saying something like this, "Friends, it is called the Dow Jones INDUS-TRI-AL Average, not the biotech average."

Metz's point is obvious enough, but somehow regularly forgotten by typical investors and professional market participants, alike: to gauge the health of the economy, monitor the industrials, and for a snapshot of the above, monitor the Dow.

In the decades since its inception, many indexes and indicators, all relevant and illuminating, have followed - - the S & P 500, Nasdaq, Russell 2000, and countless sector indexes - - but if you want to take the pulse of the U.S. economy, and more broadly, and by extension, the health of United States / the state of the union, keep your eye on the Dow.

Reading through TheStreet.com's ratings this weekend, I came across something interesting:

Nutritional and personal care products developer USANA Health Sciences (NASDAQ: USNA) has been upgraded to a buy from a hold. Its revenue increased by 16.9% in the third quarter compared with the same period last year. Earnings improved to 70 cents a share from 55 cents per share over the same timeframe.

The company's return on equity improved to 184.53% in the third quarter compared with 78.97%, a signal of significant strength within the corporation. This return on equity greatly exceeds that of both the industry average and the S&P 500. USANA Health had been rated a hold since August 2007.

All of that is true and, as investors, we all know that a company that can earn high returns on equity is a wonderful thing indeed. If you don't believe me, take a look at the writings of Peter Lynch, Warren Buffett, Bill Miller, and just about any other great investor.

But at some point, a high return on equity becomes a red flag for fraud and/or an unsustainable business model. Can a company's management/business model be so amazing that the company can earn returns many times greater than industry peers or that market as a whole -- without any particularly important patents or competitive advantages to speak of? Does TheStreet.com really think that a ROE of 184.53% is sustainable? Are Dave Wentz and Gil Fuller (Usana's President and CFO, respectively) really more than eight times as good at deploying capital as Warren Buffett?

I somehow doubt it.

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