Your dog-stock best bets for 2008

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Strategy Lab is MSN Money's stock-picking challenge. To learn more about the game -- and the contenders -- click here.

Is the economy heading into a recession or not? Will consumers tighten their purse strings? Is the dollar's decline good or bad for the economy? Are oil prices headed above $100? Will it be Obama or Hillary, Rudy or Mitt? Is the housing sector poised to recover in 2008? Have we seen the worst of the credit crunch?

These are just some of the very important questions facing investors as 2007 comes to a close. Given that there are no clear answers, you can see why the market is volatile and why stocks are having trouble sustaining any momentum.

You can also understand why underperforming or dog stocks haven't enjoyed their usual year-end bounce. Investors aren't excited about owning healthy stocks, let alone those with a few fleas.

Standing firm

That's one reason why my Dog Pound portfolio has suffered so much over the past month. It wasn't long ago that I was leading this contest with a gain of more than 8%. But when the credit crunch moved to the front pages and the tone of the market turned decidedly less optimistic, the losers gave up their rally effort and resumed their losing ways. Not unusual, just unfortunate -- especially given the short time frame of the lab.

Nevertheless, I still like all the holdings in my portfolio, and I'm confident that the group will post solid gains over the next six to 12 months. So I'm holding fast even though my portfolio is rapidly losing ground.

One thing you can say about the turbulent market: it has created a lot more dogs to pick from. And many of you responded to my call for stock ideas for 2008, which I appreciated greatly. I couldn't respond to each of you, but I do thank you for taking the time to share with the rest of us.

Your dogs for 2008

Here are some of the stocks readers wrote in to suggest as dogs that will get off the mat in 2008 and outperform the rest of the market:

Barclays (BCS, news, msgs) and EMC Corp. (EMC, news, msgs), from Joel; Excel Maritime Carriers (EXM, news, msgs), Thomas; Pioneer Drilling (PDC, news, msgs), John; Comerica (CMA, news, msgs) and Corn Products International (CPO, news, msgs), Jim G.; Brookfield Asset Management (BAM, news, msgs), Russ; NutraCea (NTRZ, news, msgs) and Senomyx (SNMX, news, msgs), Don; Level 3 Communications (LVLT, news, msgs), Jim -- and no, the last name wasn't Cramer; Superior Offshore International (DEEP, news, msgs), Chris; Tellabs (TLAB, news, msgs), Tom; Dow Chemical (DOW, news, msgs), John; Nabors Industries (NBR, news, msgs) and BJ Services (BJS, news, msgs), Ken; Belo (BLC, news, msgs), Erik; Under Armour (UA, news, msgs), Derrick; CalAmp (CAMP, news, msgs) and Thomas Group (TGIS, news, msgs), Howard; Sally Beauty (SBH, news, msgs), Jim; CSX Corp. (CSX, news, msgs), Gloria; American Express (AXP, news, msgs), Ted; and StatoilHydro (STO, news, msgs), Lou.

Aside from the companies listed above, there were a few brave souls recommending the following financial stocks: Citigroup (C, news, msgs), Washington Mutual (WM, news, msgs) and Countrywide Financial (CFC, news, msgs), from Brian; First Marblehead (FMD, news, msgs), Brent and Josh; and Hovnanian Enterprises (HOV, news, msgs) and Fidelity National Financial (FNF, news, msgs), Dennis.

Then there were the kindred souls who picked current or past Dog Pound stocks such as: Starbucks (SBUX, news, msgs), from Bob; Whole Foods Market (WFMI, news, msgs), Mark; JetBlue Airways (JBLU, news, msgs) and Yahoo (YHOO, news, msgs), Brian; and Ceradyne (CRDN, news, msgs) and SiRF Technology (SIRF, news, msgs), Chakra.

Finally, my favorite dog selection comes from John N., who selected Fed chief Ben Bernanke.