Inflation. The Federal Reserve Chief and the governors believe it to be the worst of all possible scourges for the U.S. economy. The specter of it looms large as the government throws more and more money at problems like unemployment, mortgages, and bank bailouts. It would seem inflation is inevitable as that money sloshes around in the economy, driving up prices for fewer goods as manufacturers slow or stop production due to lack of demand. So what's an investor to do?

A rose is a rose is a rose. Thank you Gertrude Stein for that observation. But a bank is not a bank is not a bank. That's because not all banks are serving the same market, nor are they all offering the same loans. If you're going to invest in banks, be sure you understand who they're lending to and what kind of loans they have on the books.

The first group of banks is community banks. As you might guess, they serve specific communities, usually within a fairly narrow geographic region. They rely on that region for their deposits with which they'll make loans, and loan demand. In other words, they serve a well-defined community. They know all the neighbors, participate in the local activities, have a high profile, hopefully do good things for a community.

Earnings reports started. Alcoa (AA) came out of the box a little shy of what investors wanted, and according to commentary, sent the stock market into a spin. Hard to believe one stock report could do that. The same day, the U.S. trade deficit was announced, showing that our still strong need for oil imports exceeded all of our exports. The deficit widened, again. That contributed to the weak trading day. But Alcoa's report was a factor.

By the time you read this, many more companies will have announced their results from the last quarter of 2009. Some analysts expect many companies to announce earnings that triple the same quarter of the year before. Certainly the stock market rose in anticipation of better times. Many stock are up more than three times their lows most hit in March of last year. So now stocks better deliver.

Ford (F) stared into the abyss that was 2009 and came away from the edge unscathed. Of the three major U.S. auto manufacturers, it stayed out of bankruptcy, never borrowed money from the government, and now it's gaining market share while others continue to lose it. So is the stock a buy?

Maybe. The famous and famously wealthy investor George Soros took a large position in the stock on November 17, about 7.3 million shares. Let's say he paid the high of the day that day of $9 a share. Now the stock sells a little over $11 as this is written. Mr. Soros made 22.22% on his investment so far. Not bad for less than two months. So he's made money. The stock has not traded above $11 since 2005 and is up 327% in the past year. So is there any room left on the upside?

Every year I make the same resolutions about dieting and exercise. Every year they last for a few weeks and old habits easily, seductively, come back. So I'll do those again this year. But I'll also add the following resolutions, ones that will help me not repeat mistakes that cost dearly in the last two years.

1. I will buy more steak, less sizzle. No one likes a good story better than I. Tell me a company has a cure for cancer, has the best software to take on Microsoft (MSFT) or can make teeth white in five minutes, and I'll listen very hard, most likely invest. Being an optimist, I want to believe all these things are true, that people do have great ideas, that businesses will thrive. But they don't. Most of the time. Not because the management is crooked (sometimes it is), but because business is extremely competitive and getting new products to market, then making a profit, is close to impossible. That's because big, established firms in the same industry have either tried the same idea or passed on it because it doesn't work. This year, I'm buying more well-capitalized companies with proven histories of profits, ones that are growing revenues and profits in a very tough economy. More steak, less sizzle.

I'm going defensive this year. The stock market had a great run in 2009 with the Dow Jones Industrial Average and the S&P 500 index up more than 60%. It's hard to believe stocks can run too much higher. They can, of course, if earnings explode. But that seems like a drug-induced dream at this point, considering over 10% unemployment.

I also think interest rates will be higher next year, that the economy will improve somewhat, and that unemployment will go down but not by much. So I'm focusing on stock with these attributes:

Notice the headline is a question, not a statement. If I knew exactly what would happen in 2010, I wouldn't write anymore -- I'd just invest accordingly. But I don't know (nor does anyone) what will happen exactly in the next 12 months. However, there are economic signals that can give all of us some good guesses. Here are mine.

Last week I wrote about five things to fear in the stock market, going from the price of gold and what it portends to federal government programs and their consequences. This week, let's look at reasons to be positive about the stock market and what they might signal for 2010.

Employment is getting a little bit better. Nothing to get excited about yet, but still, the worst of unemployment seems to be in the past. Each month for the last six,, there have been fewer layoffs. The latest employment report showed that the service sector added 56,000 jobs while manufacturing was still losing them, though by a much smaller amount than in previous months.

Stock markets go through many different cycles. In each one, there are one or two elements that make a successful investment. For example, interest rates are always a concern for financial institutions or companies that borrow a large amount of money. For these groups, the higher interest rates go, the lower profits will most likely be unless they are able to raise prices and/or cut costs faster than interest rates rise.

Right now, the main focus for most investors should be revenues. That's because without increasing revenues, there is an absolute amount of profits that any company can achieve. Simply by cutting costs, a company can increase profits, up to a point. But eventually lowering expenses isn't enough because there are only so many costs that can be cut before a product or service begins to weaken and affect sales.

Intel Corp. (INTC) raised its dividend. Again. The 14th time since 1992 when it began paying quarterly sums to investors. The annual payout is now 63 cents or 15.75 cents every three months. That's 12.5% higher than the previous dividend.

The stock is trading around $20 a share. With a 63 cent dividend, that's a yield of 3%. Not a bad return when coupled with the 50% rise the stock's seen in the past year.

The dollar doesn't buy what it used to, especially if it's something made in another country. When the dollar is weak, imports cost more because it takes more dollars to buy a foreign product. And the weak dollar is just the way our government likes it.

That's because the other side of the dollar bill is that when it's weak, U.S. products become cheaper for other countries to buy. While China is having a resurgence in its economy, it will buy more goods and services, many of them from the U.S. Our stuff is a bargain because it doesn't take as many renminbi to buy dollars. U.S. manufacturers take their renminbi, buy dollars and repatriot the money. They still make the same profit on the product and enjoy stronger sales, due to the weak dollar.

Warrent Buffett, investor extraordinaire, just bought something. The Burlington Northern Santa Fe Railroad Company (BNI). It cost $26 billion. He already owned part of the railroad, but he wanted it all. Figured it was a great investment. So why should you care?

First, because it's Warren Buffett. While he's made one or two bad investments (see Eastern Airlines (who?) as an example), most of what Mr. Buffett buys increases in value. He's not the second richest man in America because he's lucky. When he buys into an industry, it may be one that most investors should consider.

The federal pay czar is doing his job. He's cutting enormous paydays for executives of banks and other institutions that took TARP money. That's as it should be. Those banks performed terribly. Several would have simply vanished if the government hadn't bailed them out. Since capitalism is all about rewarding risk and merit, these executives don't deserve extraordinary payments.

But there is a concern that investors need to think about. It has to do with the human side of this equation. Consider this: if you're an executive who has a contract that states exactly how you get paid and you meet those standards, you would expect payment. That's why there are contracts. You and your department may have been one of the few groups that contributed to earnings, helping mitigate some of the losses other departments generated. While you may feel a twinge of "team" spirit and be glad that you've helped, you don't feel it deeply enough to believe your contract should be violated.

Apple Inc. (NASDAQ: AAPL) just reported unbelievably good earnings in an unbelievably bad economy. Fiscal fourth quarter results were up 46% compared to the same quarter last year. Investors liked what they saw and pushed the stock over $200 a share in after market trading. How can Apple deliver great earnings while almost everyone else is struggling?

Investors can learn a lot from studying Apple and applying it to all their stocks. While it is a high tech company, it has attributes that all great companies share. Here are some of them.