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Earnings Season Part II: Finding the Best Stocks to Buy on Wall Street

Thinking he was off camera, President Bush recently said that "Wall Street got drunk," and is now experiencing a hangover. While I may not have phrased it quite that way, it's certainly true, and the hangover may last for a while longer. Fortunately for us at What's Working on Wall Street Now, we abstained from most of the mayhem—and that's why we're not experiencing the hangover.

This week, I want to survey some of the damage on Wall Street, and I'll give you some pointers on what to do in the weeks ahead. This is a tricky market, and I don't want you to fall victim to it--which is so easy to do these days. I also want to make sure you're not to be fooled by the rebound of financial stocks. They've been beaten down and it's tempting to think they've bottomed out and are on their way back up. Don't do it  because this is a classic sucker's rally, and a lot of inexperienced investors are being pulled in.

One investor recently told me how excited he was that Freddie Mac (FRE) has soared from under $4 a share to nearly $10 a share in just a few weeks. Sorry, but I'm not impressed. Freddie still has to add on about $60 more to make a new high and it's simply not going to get there. There are plenty of places to make money right now so don't risk a dime on the financials.

Wall Street's Hangover

Let's take a step back and survey some of the damage on Wall Street. As someone who has been a professional investor for 30 years, I'm pretty amazed by some recent earnings results. Consider National City (NCC), a stock I warned you about five months ago. The company announced that it lost $1.8 billion last quarter. Washington Mutual (WM), another company I warned you about, lost $3.3 billion, and that's not the worst of the banks. Wachovia (WB) lost $8.8 billion! I'm not sure how you can lose that much in just three months, but they did it.

Don't think it's just the banks. High energy prices are also taking their toll on the auto sector. Ford (F) reported a loss of $8.7 billion, that's the most in the company's history! The airlines are also suffering, UAL (UAL), the parents of United, reported a loss of $2.7 billion.

So where are the earnings? The answer is simple—commodity related stocks. The companies that are in any connected to the massive global rally in commodity prices are experiencing rising profits. Here's a perfect example: Today, Potash (POT) reported that its earnings tripled last quarter. This has been a huge winner for us. I recommended Potash to subscribers of Blue Chip Growth last June, and we already have a 186% profit in a little over a year. I also placed the stock on my exclusive Top 5 stocks for the month.

Potash isn't the only stock reporting huge earnings gains; we have several more on our Blue Chip Growth Buy List. I want to remind you that you can sign up now for a one-year subscription to Blue Chip Growth for just $149—that's half off our regular price. If you sign up now, you can immediately see our list of earnings champions. At Blue Chip, we're in the midst of celebrating another market-beating year so please, join us today.