A very common refrain among value investors, "my pal Warren" being head of the class, is buy on fear (sell on greed), and it is working with the toxic stock portfolio.

This is the second update to my ranting twelve weeks ago that the six most highly traded stocks receiving the most bad press would be a great contrarian investment, and that this group would outperform the overall market without much difficulty.

It was true earlier, and it is still true today as the DJIA topped 11,000 again. The toxic stocks list includes Bank of America (BAC), Citigroup (C), General Electric (GE), BP (BP), Goldman Sachs (GS) and Transocean (RIG).

I have always felt that for all the blabbing we do -- or blogging, in my case -- we should try as best we can to be accountable for our good and bad calls. This report is long overdue, but I will post it anyway since all of my past year's picks and results have been made public.

The market was very harsh in the early part of 2009, filling investors fear and trepidation, and sinking to a March 9, 2009 bottom. Perhaps some of the bleeding has stopped, but the economy has not healed as bears and bulls seem to carry the day, or every other day.

Over most of the last ten years my favorite investment has been Intuitive Surgical (ISRG), the developers of the da Vinci robotic surgical technology.

The stock has been on quite a roller coaster ride over the past two years, rising as high as $360, then plummeting to around $86 a share. This spring it reached a new high of $393.92 on spectacular earnings and investor euphoria. That was ridiculous, but in the short run you cannot predict what the market will do.

Now, with economic concerns building, an investor lawsuit pending, and perhaps a dose of reality seeping into the stock price, it has taken another dramatic turn downward again. It closed Tuesday at $269.12, a 32% fall from its high.

A few weeks ago, a good friend asked me for a stock recommendation that he might add to his Roth IRA. Three stocks with high yields came to mind that would be great in a retirement account. Note that I do not advise others what they should do, but share what I am doing or contemplating doing.

I recently included Merck (MRK) in a review of the granny portfolio, and discussed Royal Dutch Shell (RDS.A) in Chasing Value™: Buffett Must Be Buying Oil. I own Merck in all of my portfolios and have made Shell the largest holding in the largest portfolio. The third stock that I thought of I don't yet own -- Telefonica SA (TEF). I looked at it last May, and it currently pays a whopping 7.13% yield.

In case you need to be reminded to look closely at the books, today's poster boy for erroneous ledgers, Bernie Maddoff, should be a constant reminder. Furthermore, when you are looking at the books, remember that Benjamin Graham, mentor to "my pal Warren," advised buying stocks for less than their intrinsic value. And book value is the starting point in attempting to establish that.

Two weeks ago, I posted an update on my toxic stock picks. These were six unloved stocks where I felt the stage was set for market beating returns. The same is true again for today's market-beating group, although it is not the headlines that tied this group together, but their standout bargain metrics.

Are folks afraid to invest in EZCORP (EZPW)? Perhaps they are, because the stock has not moved even though the metrics improve every time I check. On July 23, EZCORP reported a year-over-year net income rise of 39%. That is, after reporting similar gains the year before.

The metrics are so strong I can't imagine why the company has not made the front page of every investment journal -- but it hasn't. EZCORP has a market-beating P/E of 10.75 (forward 8.55) and very little debt. It's earning a ROE of 19.55%, ROA of 18.75%, and a ROIC of 19.18%. Is there something evil going on here I that I've missed?

"Loews Corp. (L) is a holding company run by the New York Tisch family; the stock is selling at less than nine times earnings, and an almost 30% discount to its NAV, based on a sum of the parts," says Adrian Day.

The money manager and editor of The Global Analyst explains, "The company's businesses are mostly doing well; the balance sheet is rock solid; and the shares are undervalued.

Buy on fear sell on greed is being put to the test today, as I post the first update to my ranting three weeks ago that the six most highly traded stocks receiving the most bad press would be a great contrarian investment. I went on further to claim that the punishment was exaggerated and that this group would easily out perform the over all market.

Normally, I would not post so soon but the market has done an about face (again) and I wanted to take a glance. The stocks I suggested buying were Bank of America (BAC), Citigroup (C), General Electric (GE), BP (BP), Goldman Sachs (GS) and Transocean (RIG).

"Investing in conservative stocks to build or rebuild the core of your portfolio makes sense right now; investors should buy companies that have a long history of steady earnings and dividend growth, through good times and tough times," says J. Royden Ward.

The editor of the specialty newsletter, Cabot Benjamin Graham Value Letter, explains, "The obvious benefit of adhering to a disciplined system of value investing like ours is that you build long-term profits and, ideally, financial independence.

"While others will focus on the fear, we will continue to focus on the facts and figures; and right now, they show that there are plenty of good values out there," says John Reese.

The editor of Validea explains, "The market often turns when things look bleakest, and fear is running rampant. That's what so many of the gurus I follow knew. David Dreman has written extensively about buying unloved stocks, or being bullish in times of outright crisis.

"Warren Buffett has said that the time to be greedy is when others are fearful. And Peter Lynch has said having the stomach to stay disciplined during emotional times is critical to making money in stocks.

"The stock market is now below the midpoint of fair valuation, a fact that leads us to believe there is further upside for the market ahead," says J. Royden Ward, who specializes in uncovering value-oriented investments.

The editor of Cabot Benjamin Graham Value Letter explains, "Our goal is to identify value and one such value, in our view, is Wal-Mart Stores (WMT), the world's largest retailer, employing more than two million workers in more than 7,500 stores.

For the past few weeks the stock market has been volatile and the "I told you so bears" are coming out in droves to pat themselves on the back. Well, I'm not a stock market bull but I think they are full of it!

The market would still be up if not for the black swans popping up all over. The disaster befalling the Europeans under mountains of debt, plus the oil spill in the Gulf of Mexico running unabated, added to the colossal pending legislation to rein in Wall Street at the same time that Goldman Sachs has been threatened by the SEC and the DOJ is leaning on the rest of the street has given those already looking to make their exit plenty of reasons. However, it is not the over all economy that is the reason; that continues to improve.

"Is SkyWest (SKYW) undervalued? Indeed, we believe the shares are undervalued at only 0.55 times current book value," says J. Royden Ward.

The editor of Cabot Benjamin Graham Value Letter explains, "The company's P/E of 8.4 and dividend yield of 1.1% is attractive. SkyWest alo has over $13 per share in cash ready to expand its operations. In our view, SkyWest is a classic Benjamin Graham stock.

Another day another dollar, and more, everywhere you look, as EZCORP (EZPW) beats consensus estimates once again. But what is the value proposition?

EZCORP was an easy pick for me in late December 2009 when it was trading at $14.46. It is one of my two repeat picks for 2010, trading at the time of that writing at $17.35 after a 20% gain. Friday's close of $23.31 adds another 34.35%, and I do not see anything getting in the way of further growth for the next ten years.

Here are the glowing words of Chief Executive Officer, Joe Rotunda, stated, "This was another outstanding quarter for EZCORP, our 31st consecutive quarter of year over year earnings growth, and clearly demonstrates our ability to consistently enhance earnings and shareholder value. Coupled with this strong financial performance is our expanding worldwide presence, as seen through our continued store growth in Mexico and Canada, as well as our strategic affiliations with Albemarle & Bond in the United Kingdom and Cash Converters in Australia."

It has been a long time since I have suggested investors dabble in tech stocks, unless, like me, you consider Intuitive Surgical (ISRG) a tech stock. Today, that changes as I direct your attention to the rapidly growing small cap stock Ebix (EBIX), a software company that specializes in the needs of the insurance industry.

This Atlanta, GA-based company is up 113.30% in the last year, 450.72% over three years, and an incredible 1,092.74% in five years through March 2010.