Fourteen stocks have been reviewed so far with eight of them potential contenders for 2010. These include some picks from 2009, some old dependables and a few more on the speculative side.

During the year I have written on occasion about selling put options (naked puts) because the premiums offered were very generous and from my perspective assumed market collapse. This was reflected in my July post Serious Money: The world's dumbest market

Today I am considering four naked puts and two more stocks. The options are all based on stocks now in review.

A study by the Washington-based Institute for Policy Studies found that executives from our top 10 financial firms earned about $90 million in the value of stock options in recent months.

This is how the game was played. Bankers took stock options on their companies when their stock prices were low during the financial meltdown. Now, with the price of bank stocks shooting up, the value of these options also skyrocketed, helping them to pocket a neat $90 million if they choose to exercise them.

Let's face it, all those things you heard about efficient markets over the years were hogwash. In the short term, markets are not efficient and as we have learned on too many occasions, not even rational. If everything was always priced just right you would not have winners and losers and everyone would live happily ever after. For some things the short term might be as long as five to ten years.

Three years ago I lost out on the purchase of a property close to my office when someone decided it was worth 40% more than I did. At the time I told the broker the buyer was nuts and would lose money, if not more. I remember the broker telling me that the property was worth what someone is willing to pay. That is not true, but far be it from me too convince a broker that just made a terrific deal for his client that people often pay more than something is worth. To make a long story short, the property is now in default and I am trying to buy the note from the bank that made a bad loan accepting a silly valuation.

In April, I did a series of posts on Williams Companies (NYSE: WMB) starting with Chasing Value: Williams has the pipes and it's not blowing smoke.

I have also been writing about my investments in naked puts.

Now, I want to share one of the things I have done this year that has helped me obtain over a 100% return for 2009 at one point last month, which has since fallen back to 82%. This is not something I could have predicted, but I am not complaining.

For those of you who are able to trade options, I have been writing more and more about naked puts, "selling to open" stock options that I have been doing all year with great returns due to an overabundance of fear.

Yesterday I reviewed one example in Chasing Value: GE -- maybe not eating out of trash cans after all, and today I review some of my favorite ways to make money and improve my portfolio.

Let me start with United Parcel Service Inc. (NYSE: UPS), a company with a great balance sheet, strong management, and trading 29% off its 52-week high, about where I sold it last year. I bought it earlier this year at the bargain basement price of $44, and now wished I had bought more.

This week I closed out an option on General Electric (NYSE: GE) I had discussed four months ago regarding the absolute fear in the market place that I felt had driven investors off a cliff (see Chasing Value: Will we be eating out of trash cans?).

At the time I had noticed that GE naked puts, a "sell to open" put option, would pay me, on the spot, 52 cents a share if I would commit to buying the shares if they dropped below $2.50 by January 2011. This meant that my break-even position was $1.98 a share when GE was selling for five times that.

Intel's announcement that it plans to freeze senior top executives salaries and revise its option pricing may is another cost-containment step by the company -- but one nevertheless not without some unanswered questions.

That's because although Intel (NASDAQ: INTC) said it would not grant raises to top professionals including CEO Paul Otellini and CFO Stacy Smith, Bloomberg News reported Monday, the proposed action, if approved by shareholders, will also allow employees to exchange underwater stock options for ones with a lower exercise price.

In reading recent stories that Warren Buffett continues to increase his stake in Burlington Northern Santa Fe (NYSE: BNI) -- now standing at 22.4% -- I started to wonder if some day the name might be changed to "Berkshire" Northern Santa Fe RR?

'My pal Warren' is no doubt looking long term, and for most of the past two years has been up on Berkshire Hathaway's (NYSE: BRK.A) BNI investment. However that is not the case today as his most recent purchase at $75.00 per share (not bought in the open market) is under water; the shares closed at $66.04, down 12%. He is losing even more on his average purchase price.

Right or wrong, I have been buying stocks on dips for the last five months, and the past two weeks I started adding naked puts to the mix on down days.

In short (no pun intended), I am opening an option to sell a stock I do not own. These "naked puts" pay me cash on the first day to accept an obligation to buy a stock in the future at a predetermined price. If the stock is one cent or greater below the strike price, it gets "put to me" and I have to cover the position by buying the shares pledged.

A market downturn hurts a lot of employees at public companies. They get stock options, but as the shares in their firms drop, the options become worthless. A Google (NASDAQ: GOOG) engineer may watch options he got at $400 move "out of the money" as the stock goes under $300. But, that is life at a listed corporation.

Facebook, the big social network site, is not public. To get employees some cash, it set up a program so that they could sell some of their shares. Maybe a little money for the holidays.

According to The Wall Street Journal (subscription required), "Facebook Inc. is delaying a previously announced program to allow employees to sell some of their shares in the privately held company, citing the "incredibly difficult" global economy." The company was valued at $15 billion earlier this year when it sold a part of itself to Microsoft (NASDAQ: MSFT). The employee stock sale plan put a $4 billion price tag on Facebook. In the current environment is may not be worth even that much, which could be a cause of the cancellation of the program.

It used to be that having a job at a "hot" private company was a tremendous deal. Eventually, the firm goes public at a ridiculously high value. Workers become millionaires. What a great life. At Facebook, the day of the big pay-off may never come.

Douglas A. McIntyre is an editor at 247wallst.com.

Yahoo! (NASDAQ: YHOO) yesterday posted its lowest price in nearly five years. The stock moved to $17.75, down from a 52-week high of $34.08.

The Wall Street Journal pushed the idea that this was an options play. "Trading in Yahoo options leapt to four times the normal level as investors picked up 168,000 calls that allow them to buy the company's stock." In other words, some traders are willing to gamble that the shares will go up.

But, they won't go up. There is growing evidence that marketers prefer search internet ads to display advertising. Yahoo! sells a great deal of display inventory and is a distant second to Google (NASDAQ: GOOG) in search. Some of that may change as Yahoo! begins to use the Google system to create its search results.That may not offset the fact that Yahoo! probably has as much display advertising availability as any company in the world.

Because Yahoo! has shown it is unwilling to make major cost cuts, a flattening of its revenue growth would be a disaster for its investors. The firm's year-over-year sales improvement is already barely above 10%. What had been a growth stock three or four years ago has now become a buyout gamble. Investors still hang on to some hope that Microsoft (NASDAQ: MSFT) or a large media company will make an offer for the portal company.

That means that Yahoo! still carries a "takeover" premium, which begs the question of where the shares might trade at the end of the year, if there are no offers. Investors are gambling that there is a 30% chance that Yahoo! will be bought, if it is not, the stock heads toward $13.

Douglas A. McIntyre is an editor at 247wallst.com.

Yahoo (NASDAQ-YHOO) closed at $28.43. Yahoo is scheduled to report earning on April 22. The Microsoft (NASDAQ-MSFT) deadline for moving forward with a hostile takeover of Yahoo is April 26. Microsoft announced on Jan. 31 an offer for Yahoo payable in $31 cash, or 0.9509 per share. Yahoo May option implied volatility of 55 is above its 26-week average of 40, according to Track Data, suggesting larger price movement.

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

Financial eras, like social periods, are often defined by moments or epiphanies when decision makers and/or citizens realized that a serious flaw/mistake/problem was occurring through time, and across space, and needed to be corrected.

The ever-incisive FT columnist and economist Martin Wolf describes one contemporary concern that's likely to be addressed: the failure to align the interests of managers with those of investors.

My BloggingStocks colleagues Peter Cohan and Zac Bissonnette have also written on the subject on several occasions in this space, and now the FT's Wolf has assembled additional data that may very well lead to public policy changes, both in Wolf's United Kingdom and in the United States.

The significant declines in share prices at many of the big financial companies have left executives and employees in an unenviable position: many hold options that are badly out of the money (subscription required) and, at companies like The Bear Stearns Companies, Inc. (NYSE: BSC), have literally no chance of ever realizing any value.

Executive pay consulting firm Steven Hall & Partners reports that 55% of Fortune 500 financial services and insurance companies have options with an average strike price that puts them underwater. At Countrywide Financial Corporation (NYSE: CFC), the current share price is about 86% lower than the weighted average strike price of the options held by employees.

All of this presents an interesting executive compensation quandary: the purpose of options is to give executives an incentive that allows them to profit alongside shareholders. But options that are so out of the money as to be hopeless accomplish nothing. What effect might this have on performance? Activist investor Daniel Loeb opined on this very issue in a letter to Star Gas Partners CEO Irik Sevin back in 2005:

According to a new study of company leaders, CEOs tend to approach business risks more prudently when compensated with material pay packages as a larger percentage of overall compensation, instead of a heavy dose of stock options.

From one point of view, this makes little sense: Many (many) executives perform just to the point of making stock prices rise quarter after quarter. After all, would you want to buy options with cheap strike prices only to sell them later for massive profit -- company long-term performance be damned? Due to the greedy nature of many CEOs, this situation seems head-on. The only problem here is that this study refutes that belief.

It concluded that CEOs who are granted large numbers of stock options as a main form of compensation are more likely to make riskier decisions with often negative repercussions on company stock prices. This also makes sense: With more stock options on the table, the risk-taker mentality may come out more for leaders-- who ascend to their positions usually by taking risks in the first place.

The only problem is that most of those risks end in bitter disappointments instead of glowing results. Although stock options are geared toward motivating executives and middle managers to improve a company's future performance, the study's authors argue that that form of compensation is not all that effective in increasing a company's overall results. Moral of the story: liberal stock option granting is a good idea, but just don't overload comp packages with them.