Yesterday, I wrote about the outperformance of stocks in December that had an “A” rating in November.  Our analysis shows that positions that experience dramatic ratings changes from A to F and F to A tend to outperform the markets.

Here are the 5 positions for January that moved from “F” to “A” in December, meaning good investors are buying:

Rating From F to A
Symbol    Name    Industry    December Return
CBI    Chicago Bridge and Iron    Construction    23.57%
DUG    ProShares UltraShort Oil & Gas     Energy    -30.81%
IJH    iShares S&P MidCap 400 Index    Index    16.56%
MWTRX    Metropolitan West Total Return Bond M    Bond    -24.35%
SWINX    Schwab International Index    Foreign Large Blend    48.60%

Total December Return        6.72%

And here are the 22 positions that went from A to F rating:

Symbol    Company    Industry    December Return
ARAY    Accuray Incorporated    Medical    27.09%
BRK.B    Berkshire Hathaway    Conglomorate    -2.01%
DD    DuPont    Conglomorate    13.86%
DNR    Denbury Resources Inc.    Energy    25.66%
DWSN    Dawson Geophysical Company    Energy    -6.41%
EFV    iShares MSCI EAFE Value Index    Foreign ETF    18.26%
ERTS    Electronic Arts    Entertainment    -9.74%
FXY    CurrencyShares Japanese Yen Trust    Currency    2.92%
GD    General Dynamics Corp.    Industrial    18.64%
GHM    Graham Corp    Industrial    30.36%
GRMN    Garmin Ltd.    Technology    23.44%
IAU    ISHARES COMEX GOLD    Commodities    14.34%
MKL    Markel Corp.     Insurance    21.92%
MS    Morgan Stanley    Financials    41.32%
O    Realty Income Corp.    Real Estate    43.81%
ODP    Office Depot, Inc    Services    63.74%
PGF    PowerShares Financial Preferred    Financials    16.10%
RSX    Market Vectors Russia ETF    Foreign ETF    7.08%
SSO    Ultra S&P500 ProShares    Index    19.41%
STO    StatoilHydro ASA    Energy    11.89%
TSL    Trina Solar Ltd    Energy    9.29%
VTV    Vanguard Value ETF    Index    12.41%

Total December Return        18.34%

The key takeaway is that good investors seem to be taking the money off the table once these positions had a nice run in December.  Notice that foreign, energy and financials, sectors that were overly impacted by the market turmoil saw a nice bounce.

We’ll check back with these next month.  Good luck.

I heard it from our Grand Prize Cakefolio winner today: "As I have more people in the network, the value proposition increases dramatically."  Yes!  Indeed, this is why we hosted the Google Giveaway throughout the month of February. 

We wanted to  remind you that adding friends and family to your network is a short-cut to investing insights based on proven performance PLUS give you added incentive to believe us: 4 chances to win a share of Google, and the possibility to win "The Cakefolio" diversified portfolio Grand Prize.

Congratulations to our winners:

- Michael A from Amherst, NY - a share of GOOG

- Mark M from Los Angeles, CA - a share of GOOG

- Chris T from Seattle, WA - a share of GOOG

- Daniel G from Davie, FL - a share of GOOG

- Aravind D from Princeton, NJ - The Cakefolio Grand Prize!   

Aravind added more people to his network than anyone else during February, and so now he can add QQQQ (5), GOOG (1), AAPL (1), EWZ (5), EEM (1), IYR (10), and BIL (10) to his portfolio, compliments of Cake Financial.

The promotion may be over, yet there are still lots of reasons to add contacts and followers to your network:  Find out who’s trading what, and when, and why, just to name a few. 

The more folks you invite, the heartier your Cake Flash alerts will be.  Don’t you want to know how friends and family are dealing with these troubled markets? 

If so, take a minute to invite a few friends into your network.

As a federal holiday, President’s Day is officially a celebration of Washington.  Or perhaps it’s Presidents Day to remember both Washington and Lincoln.  Some even say that this is a holiday to honor any and all
Presidents of the United States…regardless, I’m pleased for the break in the normal Monday routine and enjoying thinking about what it means to be a President with integrity- whether Washington, or Carpenter from Cake, or our soon-to-be 44th Mr. or Mrs. President.

To make this short week work hard for you, here are 2 ideas compliments of the Cake team: 

First up, you could really win a share of Google– so take a shot for it.  All you need to do is invite your friends to join you on Cake by Thursday 11:59 PM PT and you’ll be entered to win this week’s Google Giveaway drawing– and have your chance at The Cakefolio Grand Prize.  Washington encouraged his peeps to "Associate yourself with men [and
women] of good quality if you esteem your own reputation" - so what are
you waiting for?

Congratulations to our first 2 winners — Michael from Amherst, NY and one to Mark from LA.

Second, for a quick review of Cake’s weekly trends and for market commentary, check out the "highly-acclaimed" (not so) news show The Slice, featuring Steve and our Sven (not to be confused with "Get A Sven").  In this recent show, they talk of our now-famous recruiting strategy as reported by Valleywag and Wired, Barry Bonds, Yahoo, and of course the most active positions on Cake. 

Most actively traded in the past 7 days by Elites and Platinums: NEM, FSLR, KGC, KKD and more.  Surprised?  Post your comments here.

And have a great week.