Swap your way to a stock upgrade

Wow, I rarely comment, but I disagree wholeheartedly with every recommendation here.

The only one I would hedge on is the Citi vs. Goldman call.  It's difficult to see how much more upside that GS has, versus the lottery ticket that Citi has become (maybe another 60% to get back to $250, but no guarantee it will stay there).

In each case, you're advising selling off shares that have more than likely plummeted in value to being a fraction of what they were worth when they were bought.  While you can only endure so much masochism as a tax write-off, this underscores the very strategy of long term investing to begin with (provided you selected companies with solid fundamentals to begin with).

Starbucks will bounce back, and it's re-organizing strategy is already showing profits from 2Q.  McDonalds has multiple long-term negatives from a growth perspective:  #1 - It's already the largest fast-food chain in the world, and I don't see Africa opening up anytime soon.   #2 - The health movement shifts more people away from fast-food, and McDonalds #1 profit source, the combo meal (mainly from margin on soda sales).  True, they've adjusted by adding coffee, but I've tasted it, and it leaves one bad aftertaste.  In the end, neither one of these is the better fast food play for a long term investor (10 years +) unless you're in it for dividends (which McDonalds is relatively safe).  I would rather own YUM because of their more diversified business structure, China penetration, and innovation history.

Bob Evans?  Are you kidding me?  They have the health craze problem that McDonalds has taken to a new level.  Not to mention they're a much more regional play, who's growth potential stalled earlier this decade.  If you're going to go casual dining, go with DRI who owns chains like Olive Garden and Red Lobster, which saw an increase of customers "trading down" during the first half of the year.

I'd prefer Target over Wal-Mart on a long term perspective, barring a dividend strategy, as well.  As the recession slowly ends, and America returns to its spending ways Tar-Zhay shall prosper, and send share prices higher.  Only if you see this recession stretch beyond 5 years would the Wal-Mart strategy probably pay off better in the long run.   But there's probably a better third option to both of them from a growing retailer.  Personally I'm a Kohl's fan, but that doesn't include the food and sporting goods aspects offered by Wal-Mart and Target.

GM versus Toyota is another lottery ticket.  The shares are virtually worthless anyways, so why not hold on to them and see if GM actually does survive and become profitable?  You wouldn't get much for the shares anyways, and you'd have to put new money to work as it is.  But better than Toyota, buy Ford.  They'll be the big winner out of the GM & Chrysler bankruptcies.  Better managed, better run, better products of the Big 3 (and higher quality ratings on newer models year-over-year).

In the banks argument, if you're going to buy low, go for BofA, Wells Fargo, or USB.  Goldman is Goldman, and they'll be the best probably for years to come, but from a future growth standpoint 10 years +, I'd lean slightly toward holding onto Citi shares or putting that money into one of the 3 other beaten up banks' shares.

But the bottom line is you have to watch your investments.  Know your fair values, and be prepared to sell when you think the price is too rich, and buy when undervalued.  Warren Buffett's tried and true advice works just as well now as it did when he used the teachings of Ben Graham last century.