Given our society these days, should we really be surprised by crusading Governor Eliot Spitzer's prostitution scandal? These days it seems like all our heroes let us down, whether they be superstar athletes like Roger Clemens (steroids) and Michael Vick (animal cruelty), widely held technology stocks like Google (NASDAQ: GOOG) (less clicking, 40% drop in stock price) and Apple (NASDAQ: AAPL) (imperfect, 40% drop in stock price) and once-pillars of the finance industry Merrill Lynch (NYSE: MER), Citigroup (NYSE: C) and Bear Sterns (NYSE: BSC) (all had too much exposure to subprime mortgages and municipal bonds).

Mind you, in no way do I condone Spitzer's behavior -- the night before Valentine's Day no less -- but in the grand scheme of things, he's done a whole lot more good than he's done bad. You might even say it takes a criminal to know one! He'll probably be forced to resign and while sad, it should motivate him like never before to gain back the respect he once had.

For all the value and integrity we place on sports, it's really nothing more than entertainment. In no way can I defend Vick, but Clemens clearly loves his sport and simply could not let anything stop him from being the best. While it's sad that his career will be forever marred, it's a great lesson to teach kids to never cheat -- no matter what.

Well, all I can say is that today has been one of the worst days of my portfolio's life. I'm not concerned about my core holdings -- Disney (NYSE: DIS), Coca-Cola (NYSE: KO), General Electric (NYSE: GE), stuff like that -- but, boy oh boy, are my financial positions taking some major hits!

I know, I know -- you're saying to yourself, "uh, buddy, didn't you realize this was going to happen?" Sure, but when the theory becomes reality, that's when the torture really starts to set in. Not sure if you caught the wave of downgrades today -- if you didn't, check out Eric Buscemi's post about it -- but I got hammered by one of them. MFA Mortgage (NYSE: MFA) was downgraded by Keefe Bruyette on book-value concerns. As I write this, it's trading down over 15% -- oooh, it hurts to write such a double-digit figure -- on, get this, volume of over 15 million shares. The 30-day average volume is closer to 4 million shares. I'm writing this with a couple hours to go to close! It's going to be a huge volume day once all is said and done. I also own Newcastle Investment (NYSE: NCT), CapitalSource (NYSE: CSE) and MFA preferred shares (NYSE: MFA-A).

Have I been shaken out yet? No. In fact, in terms of MFA, I personally think that it is a buy, even though it could be in falling-knife mode right now (that's always difficult to discern). I know Timothy Sykes would disagree on this strategy, so you should check out his post for some balance. With Ben Bernanke most likely set to cut the Fed Funds rate even further, MFA should benefit, as should most financials. I also like CapitalSource, but I am a little wary at this point of Newcastle -- I think it will recover, but that one's been particularly volatile. As they say, when there's blood on Wall Street, that's sometimes the best time to do some judicious buying (after a ton of due diligence, of course). And, as a postscript, if you want to do only safe buying, then Disney, Coke and GE might be good ideas to look at -- GE has an especially interesting yield right now.

Disclosure: Steven Mallas owns shares in Disney, Coca-Cola, MFA common and MFA preferred, CapitalSource, Newcastle Investment, and GE. Positions can change at any time.

Crocs Inc. (NASDAQ: CROX) just reported decent earnings, getting everyone excited about international growth, but just missing analysts expectations and causing their stock to lose 12% and already I'm seeing tons of bloggers, traders and "market experts" defending the stock here. Sure, they might be right, if you want to better your odds of success and not play the ridiculously random guessing games most investors and traders seem to enjoy playing, don't fight an earnings move especially a momentum stock's earnings move.

Momentum stocks have special qualities that vex investors -- especially value investors --because it's not just about the physical numbers, it's about expectations. Everybody has different expectations and a momentum stock's subsequent price action is the result of how the actual earnings results mingle with those expectations. Don't be foolish enough to believe that your own personal beliefs, expectations, thought process and conclusion matter in the least. I don't care who you are, you matter little to the stock price.

[Update: Find more from Timothy Sykes here, and more stocks to buy here.]

Each quarter brings a new batch of earnings plays, so which ones should you trade?

I've had my fair share of successful calls, but I've also been burned badly before. One time, I put in a solid week's worth of research (pdf) to pick Vasco Data Systems (NASDAQ: VDSI) right before earnings, and what happened, they totally blew it. A 30% drop. It still stings. This is just the latest reminder that you can't trust companies, analysts or really anyone on Wall Street.

So far, in this latest round, Intuitive Surgical (NASDAQ: ISRG), E*Trade (NASDAQ: ETFC), Mastercard (NYSE: MA), VistaPrint (NASDAQ: VPRT) and Concur Technologies (NASDAQ: CNQR) have performed well while Google (NASDAQ: GOOG), Accuray (NASDAQ: ARAY), Cadence Design Systems (NASDAQ: CDNS), Yahoo! (NASDAQ: YHOO) [editor's note - this was written prior to today's news], VMware (NYSE: VMW), Apple (NASDAQ: AAPL) and Synaptics (NASDAQ: SYNA) have all bombed.

Amazon.com (NASDAQ: AMZN), Microsoft (NASDAQ: MSFT) and Broadcom (NASDAQ: BRCM) all had very solid quarters, but where did it get investors? Nowhere -- all three stocks are flat since then.

Smack in the face of millions of exceedingly optimistic investors, I have really nailed Apple (NASDAQ: AAPL). Just as the market cheerleaders were fueling these investors' imaginations, I wrote this article on January 3, urging caution.

Several hundred hate emails and a 30% drop in price later, I'm declaring victory.

Now, don't bother to ask, I don't know if now is the time to buy or sell -- I only make calls when I believe the variables to be aligned/predictable, which is definitely not the case right now. I don't trust the overall market/economy and I also want to see how all the Johnny-come-lately analysts react/influence the stock price over the next few days. But when I nail something this dead on, I must insist you file these lessons away because they will save you money and that's why I write. After all, investing isn't just about making money and stock picking, it's about learning from what works and what doesn't so you can improve over time.

Got your portfolio rejiggered for 2008 yet? You might want to check out the latest edition of StockWatch: Between the Bells featuring BloggingStocks contributor Timothy Sykes. The author of An American Hedge Fund: How I Made $2 Million as a Stock Operator & Created a Hedge Fund recommends sectors to avoid and suggests stock plays for the coming year, including Amazon (NASDAQ: AMZN), Baidu.com (NASDAQ: BIDU) and Evergreen Solar (NASDAQ: ESLR).

'Tis the season to celebrate the spirit of giving and how better to do that than to give you a great stock pick – financial information provider TheStreet.com (NASDAQ: TSCM). This is my first pick in a series of picks that will highlight companies that are redefining their respective niches and, more importantly, whose stocks are breaking out to new highs.

Everybody's familiar with TheStreet.com; if you're into the stock market, you've definitely read, heard or watched co-founder Jim Cramer by now – he's even here on BloggingStocks. TheStreet.com has many other commentators, too, but c'mon, this is basically a one man show – and therein lies the risk. Then there's the potential for a bear market, which (as CNBC, owned by General Electric (NYSE: GE) has learned over the years) crushes profits. Wait a minute; I'm positive on this company, right? Yes. Here's the good news: this company has a lot going for it.

Revenue and profit growth have been steady in the mid-20% range, and the stock is fairly valued for that range. But TheStreet.com is also shifting its focus to take advantage of the interactive nature of the internet. In the coming months, it'll be launching a redesigned TheStreet.com (apparently, it's not even search engine optimized!), along with a new site, MainStreet.com. It also has been on an acquisition spree, buying Stockpickr.com (an interactive stock idea community with 125,000+ users) and Corsis (web marketing). Further acquisitions are guaranteed considering just last month the company more than doubled its near $40 million war chest by selling a minority stake to a private equity firm.

We've pinned down the ever-dancing Wall Street Warrior Timothy Sykes for another StockWatch: Between the Bells segment! In this edition, the author of An American Hedge Fund: How I Made $2 Million as a Stock Operator & Created a Hedge Fund cautions you to revise your strategy for the developing bear market. "It is not the time to be aggressive, it is the time to be conservative," says Tim.

Ready to make some serious money? Wall Street Warrior Timothy Sykes isn't playing around -- he wants to make you rich. In this edition of StockWatch: Between the Bells, the MSN Money host and author of An American Hedge Fund: How I Made $2 Million as a Stock Operator & Created a Hedge Fund riffs -- and dances -- on a fistful of market strategies.

Tim has three daring tips for you. Digital content storage provider Isilon Systems (NASDAQ: ISLN) is sitting at an all-time low, more than 70% off its high at the start of the year, and looks priced to buy. Genetics biotech Illumina Inc. (NASDAQ: ILMN) is currently trading around $52; Tim sees ILMN climbing to $60. Sound a little too risky? Tim suggests checking out The Bruce Fund (BRUFX), a mutual fund focusing on domestic common stock, convertible bonds and zero-coupon government bonds.

Considering a short-selling strategy? Tim calls out China Precision Steel (NASDAQ: CPSL), which has jumped more than three-fold in little more than a week and looks set to slide.

Jamba Juice (NASDAQ: JMBA), meanwhile, is giving Tim fits -- revenues are up while same-store sales are slipping. He advises to stay away from JMBA.

Enjoy the clip, and let us know which of your favorite stock gurus you'd like to hear from in the next StockWatch: Between the Bells!

Despite working as a financial journalist, the last thing I want to do is curl up over the weekend with a book on finance. After reading hundreds of press releases, analyst notes, financial news articles, industry websites and blogs over the course of the week, I am loathe to read something long-form about finance on my own time. I prefer Neil Gaiman or Chuck Palahniuk, personally. But when I was contacted by Timothy Sykes, who had what seemed like an interesting hedge fund story to tell, I made an exception and decided to give it a shot.

Sykes's book, An American Hedge Fund, is an interesting autobiographical tale of his trading life to-date. It's only around 250 pages long, mostly because Sykes is only 26. That's not to say he hasn't been trading a while -- he begins the book by chronicling how he began trading while in High School, using the library's Internet connection to research his picks.

The book is not a typical "how-to" guide to becoming a millionaire, although Sykes does detail some strategies that got him where he is today. More interesting, perhaps, is that he is able to set aside his ego and detail his trading flaws and the colossal failures they led him to make, which occasionally gives the book a "how-not-to" feel. Although Sykes's trading style, which focuses heavily on day trading risky micro-cap companies and on short selling, is worlds away from my comfort zone, which is much more large-cap value oriented, that doesn't mean I didn't learn and appreciate from seeing how his mind and his trading desk operate. I may have appreciated his technique more due to the stark contrast to my own.