Warren Buffett, Chairman and CEO of Berkshire Hathaway (NYSE: BRK.A) has been doing some big time cogitating about the future. He plans to donate the lion's share of his wealth to the Gates Foundation. Recently, he said he was looking for an understudy with the right investing temperament and wisdom to lead Berkshire. There are reports that his office has been swamped with resumes. Some are reaching to the bottom of the barrel in suggesting that I seek an audience. Perhaps they were stimulated by another Serious Money: Freight Railroads - BNI, CSX, UNP & more story which I posted the day before Berkshire Hathaway announced it had become BNI's largest shareholder.

So with this and other prescient commentary I recently posted, I was asked to present some ideas on what acquisitions Berkshire might consider given Buffett's eagerness to find a good deal. It is likely that Buffett will bring several people on board to play the role of Chief Investment Officer for different segments of the company. Nobody in their right mind believes that Buffett is replaceable.

In any event here are some of my ideas on the subject. All of my ideas follow a pattern favored by Buffett including low P/E, P/S, P/B, and P/CF's, as well as a high return on equity and low debt.

It is much better to pick stocks when the market is closed than when it is open. It is much better to pick stocks when you have some peace and quiet. Looking back at stocks I have bought over the last ten years and comparing the results, I would have to say that I have done much better making the decision on the weekend than I did during the trading day with too many distractions, news flashes, and my own rambunctiousness. [From the dictionary - marked by uncontrollable exuberance: Unruly]

I have found various factors that make a difference in the long-term success of investments. Adding WHEN to make the decision is not a factor I've encountered. Simply put, if I was to create a value fund based on my other tested factors, I can now say with almost absolute certainty that adding the 'When factor' would improve its results. So my short list of stock fund criteria includes the following:

• Strong sustainable cash flow
• Low Price-to-Book ratio
• Low Price-to-Sales ratio
• Return on Equity (ROE) higher than the P/E ratio (trailing)
  
• Positive return on Invested Capital (ROIC)
• AND NOW - do not make buy decisions when the market is open

I think it is always a good idea to make decisions when one is less stressful, but I never gave it as much thought as I have recently; especially when it comes to stock picking. Those of you who have read my Chasing Value or Serious Money stories have seen all of this before repeatedly. Now with the last factor, which is not visible to investors in any mutual fund, I add one more area of personal discipline. Of course, for the traders among you, making your decisions when the market is closed might be a tad difficult at times.

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.

In the past few weeks, several friends have asked me if I have any ideas for alternative energy stocks. Although I follow the industry fairly closely, I replied that I do not. I don't think there's any doubt that alternative energy is the future, but as Anne Kates Smith wrote at Kiplinger.com, there are numerous questions surrounding exactly what that future will look like. Another thing for investors to remember: Counterintuitively, just because alternative energy is the future does not mean that investors will be able to make money with these stocks. Even though the internet was certainly the future in 2000, those stocks were a poor investment. Innovative technology does not always mean big profits. Warren Buffett (I used this same quote in a piece on internet video, an industry that suffers from many of the same questions) opined on this paradox, using the airline industry as an example:

Sizing all this up, I like to think that if I'd been at Kitty Hawk in 1903 when Orvile Wright took off, I would have been farsighted enough, and public-spirited enough -- I owed this to future capitalists -- to shoot him down. I mean, Karl Marx couldn't have done as much damage to capitalists as Orville did.

I won't dwell on other glamorous businesses that dramatically changed our lives but concurrently failed to deliver rewards to U.S. investors: the manufacture of radios and televisions, for example. But I will draw a lesson from these businesses: The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage. The products or services that have wide, sustainable moats around them are the ones that deliver rewards to investors.

As a self-proclaimed Web 2.0 geek (those who know me will agree with that label) I am constantly reading about the next wannabe MySpace, Flickr, and YouTube. On Wednesday, TechCrunch profiled Stockpickr, "the stock idea network" targeting the financially inclined and boasting a new partnership with TheStreet.com (NASDAQ: TSCM). I have to say it was a breath of fresh air. A rarity for Web 2.0 (although certainly not the ONLY Web 2.0 finance company), Stockpickr is proving to be very helpful for those of us who have a hard time choosing stocks and funds. The site allows users to create a profile of the stocks that they normally track and then generates stock ideas based on publicly available investing information.

I haven't had the chance to fully demo it (I do, in fact, have a full-time job) but I did navigate through some of the community profiles on the left side of the page, such as Warren Buffett's holdings. It not only showed me who else bought the stocks Buffett owns, but Stockpickr also told me what else they might recommend for buyers of said stock. For example, if you were interested in Costco Wholesale (NASDAQ:COST), Stockpickr shares what other people who own this stock also bought -- such as, Microsoft (NASDAQ:MSFT), Starbucks (NASDAQ:SBUX), or Cisco (NASDAQ:CSCO).

Read more of TechCrunch's review of Stockpickr here.

My last trade of 2006 was buying Valero Energy Corp. (NYSE: VLO) at $51. It was one of my seven picks published on Thursday, December 28, 2006 that I did not own at the time. I want to own all seven because I hate the idea that prognosticators always tell others what to do, but do not put their money where their mouth is. There will be no oops, sorry moment for me, hopefully there will not be an ouch moment, either.

I only picked seven stocks because it is too hard to beat the market without a focused portfolio. The more stocks you have the more you resemble an index fund. When you consider how many stocks James Cramer recommends in a year you have to wonder how following that kind of advice could lead to success. Casting your net wide and hoping to catch something good is not a shrewd investment strategy. You have to pick and choose somehow.

I kept thinking about what the right price to acquire this stock should be and decided the time was now. After pondering all of the information I shared with our readers, it appeared that if this stock was going lower it would not be by much. However, if it took off to the upside I would be in a bigger quandary. So now I own it and expect to for many years. If it does go down I will probably buy more.

Opportunity: Lets discuss your picks for 2007 + 12 of mine to review if you have some stock ideas you would like me to review publicly.

Check out my other posts for BloggingStocks here.

Sheldon Liber is the CEO of a small private investment company and the vice president for design and research at an architecture & planning firm.

Where do investment ideas come from and what makes one idea carry more weight than another? Sometimes it is your knowledge or interest in a certain area of business that stimulates you to consider an investment. Sometimes it is the opposite and you feel a need to expand your horizons. It might be the excitement or buzz around a certain company that perks your interest to look further. But often it is the source of the information that does the trick. Maybe sometimes it is a trick, and it is all about presentation.

In Kramer vs. Kramer the movie, winner of five Academy Awards, Dustin Hoffman and Meryl Streep played a husband and wife too preoccupied with their careers to put much energy into their family. In the end they separate and Mrs. Kramer gives up on her custody battle for her son concluding he would be better off with Mr. Kramer, who has lost his job in trying to maintain his bond with his son.

The Kramer/Cramer's of the investment world are at odds with each other too, but not in a personal relationship, only in their delivery of advice.