Back on August 16, with the Dow opening under 13,000 for the first time since April, our BloggingStocks experts outlined a number of stock plays to ride out this volatile market. Picks ranged from Dow components and other household names to obscure business-to-business giants and foreign market leaders. Here, we review our picks weekly.

Four weeks into our Stocks for a Volatile Market feature, our index has fallen just behind the Nasdaq, grounded mostly by shoe and apparel maker Steven Madden (NASDAQ: SHOO), picked by Kevin Kelly. After giving up $2.51 in week three, Madden dropped $3.39 in week four, falling 14.7% and leaving SHOO at $19.67, 17.77% under its August 16 price of $23.92.

Might as well get all the bad news out of the way -- it looks like Sheldon Liber's call, FreightCar America Inc. (NYSE: RAIL), has temporarily derailed. After strong gains in previous weeks, RAIL dropped $3.78 in week four -- a loss of 8.35% -- and slipped to $41.49, 4.4% under its initial price.

Back on August 16, with the Dow opening under 13,000 for the first time since April, our BloggingStocks experts outlined a number of stock plays to ride out this volatile market. Picks ranged from Dow components and other household names to obscure business-to-business giants and foreign market leaders. Here, we review our picks weekly.

Our third week following our "Stocks for a Volatile Market" feature finds a couple of our volatile market picks bruised, but as an index, our selections continue to lead both the Dow and Nasdaq.

At the front of the pack: How much longer can Peter Cohan's pick Posco (NYSE: PKX) keep up its fortunes? Already sitting 19% higher as of last Thursday's close, the South Korean steelmaker has since climbed 6.5% further, closing yesterday at $157.69, $33.68 higher than its August 15 closing price.



China's Huaneng Power International Inc. (NYSE: HNP), Sheldon Liber's tip, gave back some gains in the last week, retreating 1.71%, but remaining a healthy 18% higher than its August 16 opening price. Another pick from Sheldon, Anadarko Petroleum (NYSE: APC), is our last recommendation that's outperforming the Nasdaq -- since trailing both the Dow and the Nasdaq last week, Anadarko has padded its shares by $2.07, and fetches 6.57% more than on August 16.

The McGraw-Hill Companies Inc.'s (NYSE: MHP) S&P downgraded Yahoo, Inc. (NASDAQ: YHOO) to sell. I spoke with Scott Kessler this morning who told me that he estimated that it's worth $28 a share and since it's currently trading above it's value, at $29, it makes sense to sell it.

Kessler made an observation which I found intriguing -- that there is often a disconnect between analysts' recommendations on a stock and their target prices. More specifically, he often finds that analysts keep a buy recommendation on a stock even though it is trading above that analyst's target price. In my view, when an analyst is employed by an investment bank, there is an economic incentive to keep a buy rating on a stock -- particularly when the bank is earning revenues from other business relationships it has with that company.

S&P does not do investment banking and it judges itself on whether its stock recommendations make money for investors. Thus Kessler felt it was important to change his recommendation once Yahoo exceeded his target price of $28. Kessler developed this estimate by developing a discounted cash flow (DCF) analysis of Yahoo's core business and adding to that the value of Yahoo's minority stakes in various publicly-traded companies, such as Alibaba, a Chinese Internet company.

Kessler had a mixed interpretation of Yahoo's conference call. He was pleased that Yahoo reported 30% growth in revenues from its top 200 advertising customers. But he also believed that there was significant negative sentiment about Yahoo based on several 2006 operating disappointments -- such as the delay in introducing Panama. In Kessler's view, The positive reaction to its latest announcement has balanced the negative sentiment and may also be overestimating the income statement benefit from Panama.

Peter Cohan is President of Peter S. Cohan & Associates, a management consulting and venture capital firm, a Professor of Management at Babson College, and editor of The Cohan Letter. He has no financial interest in the securities of Alibaba, McGraw-Hill or Yahoo.

For those of you trying to think of the perfect gift that has value, will last a long time, and teach your kids a lesson, consider a few shares of The Black & Decker Corp. (NYSE:BDK) or Harley Davidson Inc. (NYSE:HOG).

Normally, I would recommend stocks be purchased as value plays and, at current prices, these two are fairly-valued stocks. I believe that they have room to go up, but I do not expect you to get rich from these levels. However, both companies are well managed, have strong brands and sell products that your kids might be interested in (motorcycles and power tools) ... even big kids. Getting the annual reports and introducing children to investing at an early age will be rewarding later on. Both companies also pay dividends, and I expect over the long haul, the growth rates will beat the overall market.

Black & Decker closed yesterday at $78.10. When I wrote about it last in August, it was about $70 per share. It was approaching a value play for me. It went as low as $66 a few days later and to my regret I did not buy in. I was greedy and looking for a $64 price. Had you invested then, on an annualized basis, you would be up about 25% from $70.

Harley Davidson closed yesterday at $70.11. I last wrote about HOG in August as well, when it was about $56 per share: I have been a shareholder since 1998. Had you bought in at the August price, you would now have achieved a gain of over 50% on an annualized basis.

You've heard about the gift that keeps on giving? BDK and HOG are both great picks and would make unique and valuable gifts for your children, now and going forward.

Happy Holidays!

Interested in reading more? Check out my other posts for Blogging Stocks here.

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