So when I say that you should make a list of stocks to buy, I’m not saying you should jump into the market and buy them just because they’re down a few points. I’m saying you should name your price, have the capital ready, and jump on the opportunity IF it comes.

And if this correction is even half as big as I expect it to be, just about every boat will get sunk as the tide recedes.

Even big, blue chip stocks that every investor should own will get hammered.

Last year, Exxon-Mobil (NYSE: XOM) shares sold for less than $60 – even cheaper than they were during the depths of the 2008-2009 bear market – briefly selling for less than 10 times earnings.

That’s the kind of company that should be on your shopping list at that kind of price.

There’s little doubt that the world’s superpowers are now fighting a new war. It’s not a cold one, or a hot one. No tanks, bombs or poison gas. At least not yet.

But open hostility between Europe, Brazil, China, India and the United States blanket the headlines nearly every day.

It’s a long-awaited answer to the question, “Do deficits matter?”

And the answer is a resounding, “Yes of course they do, don’t be silly - why in the world wouldn’t they matter?”

In Vermont, the general store is as common as muddy back roads. These local hangouts are commonly the closest available option for bread, milk, and coffee - as well as any fresh produce that may have been grown by local farmers.

They are sort of a potpourri of variety - selling everything from food to Frisbees, and even a few bags of cat food too. If I could buy stock in them I would - because they always have customers and are always open when I need something.

In my travels as a daily newsletter editor, I listen, read, watch and seek out a variety of news sources both ordinary and arcane.

Most of the time, I’m simply amazed at the low-caliber quality of reporting in terms of accuracy, tone and general knowledge on the part of the offending reporters.

Usually, the message being relayed is entirely irrelevant, or worse, misleading.

My favorite example is something that I hear some afternoons on National Public Radio’s program “Marketplace.” This program professes to have an “intelligent and sophisticated approach to the subject of business.”

I won’t make the foolish mistake of pushing my personal political views into this letter. My wife calls my ideas crazy, if not offensive and downright unrealistic.

So if my politics elicit disgust and confusion with my own wife, I doubt I’ll have much luck parading them in the pages of the Resource Prospector.

Who you vote for is your business.

But when it comes down to what you should vote for, I have a few things to say on the subject.

I’m talking about the way that we all conduct our personal investment portfolios, as well as the goods and services we buy.

I’ve long believed that these everyday activities are a much more important ongoing vote than any one you cast into a ballot box.

I remain super bullish on gold - I just bought some more last week. Yesterday I talked about how to buy gold and silver, and how to make sure you don't get ripped off.

I also remain totally engrossed with the price movement of several major commodities, the most important being oil. I've talked recently about the all-encompassing importance of oil with regard to every single investment and asset class. If you don't know how oil supply and price affects every single one of your investments, then you might not be in a good position.

Unfortunately, I also have a good amount of cash on hand. I say 'unfortunately' because like many investors, I feel like I've fallen into the trap of being fearfully inactive. I have little faith in the broad stock market, but I do like some companies in the commodity sector. I've talked at length about owning Exxon (NYSE: XOM), Archer Daniels Midland (NYSE: ADM), and a handful of others. I like companies like Exxon and ADM because they will survive a currency crisis. They have pricing power, they have international reach, and they have products that everyone needs.

I hate falling into the trap of simply responding to the hottest news headlines - because very few people get rich by reacting to headlines and pulling the trigger on investments based on "hot" trends in the market.

At this point, computers can wipe the floor with most any day-trader, so if you think you can buy yesterday's news and still eke out a profit, you're probably wrong.

In the past couple weeks agriculture has been the hot topic on everyone's mind. First, fires in Russia caused wheat prices to double in less than a month as Vladimir Putin banned Russian wheat exports. In sympathy, many other crop commodities rose in price as well. Then yesterday, BHP Billiton (NYSE: BHP) the world's largest mining company, put in a failed bid to buy Potash Corp (NYSE: POT) the world's largest fertilizer company.

I'm back in Vermont after a week in Sea Isle City, New Jersey. And there's nothing like a vacation to make you appreciate the comforts of home. Even though Vermont isn't very far from New Jersey, geographically, the weather difference is pretty dramatic. Vermont does get hot (we broke 100 degrees a few weeks back) but I've never felt the urge to apply and reapply sunscreen here, like I did in New Jersey last week. I still managed to get a sunburn.

And speaking of sunburn, we've seen a doubling of wheat prices over the past month thanks to fires in Russia, brought on by drought. Vladimir Putin just announced an export ban on all wheat for 2010.

The market barely budged the entire morning, but action picked

Small-cap stocks pushed higher on election day, lifted by strong commodity and financial stocks and relief that a long, yet historic political campaign was about over. The Russell 2000 (NYSE:IWM) closed up 7.47, or 1.39% at 545.97, the sixth consecutive daily gain, something that hasn’t happened all year. For 2008, the Russell is down 29%, while the Dow is off 27% and the S&P 500 is down 31%.

Today’s rally clearly favored large caps as investors still have a tinge of risk aversion that tends to favor bigger companies. Also, the rally in energy stocks had a more powerful influence on large caps as many energy companies have sizable market caps. For large caps, it ranked as the biggest election day rally since 1984 when incumbent Ronald Reagan carried 49 of 50 states, with runner-up Walter Mondale carrying only his home state of Minnesota and the District of Columbia.

Within the energy arena, the Energy Select Sector SPDR Fund jumped 6.3%, mirroring a big surge in crude oil prices. Crude gushed 10% on talk that Saudi Arabia was slashing production. In addition, commodities like crude oil benefited from a sizable slide in the U.S. dollar, which makes dollar-priced goods more attractive. The greenback tumbled more than 300 basis points, or some 2.4% against the euro, triggering a buying spree in all sorts of commodity goods.

The Commodity Research Bureau Index of 19 physical markets shot 5.3% higher today, with gains seen in everything from gold, sugar, coffee, grains, cattle and copper. The latter is seen as a key economic benchmark and copper prices jumped 6.4% in U.S. trading. In addition to the macro trends on the dollar, strong earnings for soybean processor Archer Daniels Midland Co. (NYSE:ADM) fueled a supportive tone for beaten down commodity stocks. ADM shares rallied some 14%.

Financial shares also were a big part of the story today, with the Financial Select Sector SPDR Fund up 5%, boosted by yet another decline for inter-bank lending . . .

Small-cap stocks extended the morning rally into midday action, boosted by gains in commodity and financial stocks and some relief that the end was in sight for the political uncertainty surrounding elections in the United States. At 12:32 p.m. ET, the Russell 2000 (NYSE:IWM) was up 7.10, or 1.32%, at 545.60.

Even another downbeat reading on manufacturing activity today didn’t stall buying enthusiasm. Just a day after the ISM Manufacturing Survey came in at 38.9% -- well below the 50% contraction line -- today’s factory orders data came in at minus 2.5%, below the forecast for a drop of 1.5%. Although the market initially pulled back on the factory orders report, the rally quickly resumed and stretched out through mid-session.

Commodity shares were on a roll today, with agriculture products, metal and mining stocks, coal and gold all seeing sizable gains. The Energy Select Sector SPDR Fund was up 6% and crude oil prices shot 8% higher on reports that Saudi Arabia slashed output. Commodity stocks in general were lifted today by a sizable drop in the U.S. dollar, which tumbled some 2.8%, or more than 350 basis point against the euro, which makes goods priced in dollar terms more attractive. Among the big gainers were gold, copper and corn.

Soybean processor Archer Daniels Midland Co. (NYSE:ADM) jumped 17% on solid earnings, and other large-cap names getting an earnings lift today included MasterCard Inc. (NYSE:MA), which jumped 14% and lifted rival firm American Express Co. (NYSE:AXP) along for the ride, with AXP up about 5%.

Economic bellwether stock General Electric Co. (NYSE:GE) rose 8% . . .

Small-cap stocks pushed higher on the opening, but gains were short of expectations built on pre-market futures activity. Support was tied to further declines in lending rates and advances in overseas equities, but the focus today was clearly on the elections underway in the United States. At 10:01 a.m. ET, the Russell 2000 (NYSE:IWM) was up 0.82, or 0.15% at 539.32.

The factory orders report came out at minus 2.5%, which was below the forecast for a decline of 1.5%. The market noticeably trimmed away gains after the report.

Even with the market in rally mode early today, the spotlight will likely be on the exit poll reports as American voters close out the presidential election campaign. Barack Obama is widely reported as holding a comfortable lead into today’s vote, but market watchers are also closely watching the House and Senate seats that are up for a vote to see if the Democrats will mount a big power shift. In addition, traders are debating the potential impact of an Obama stimulus package.

On the inter-bank lending front, three-month Libor rates tumbled to a five-month low and are now below the levels in place before the stock market collapse in September. In addition, three-month Euribor rates hit a seven-month low. Libor rates are now down more than 2% from the peak seen in the credit crisis when banks were . . .

Small-cap stocks are expected to open higher, underpinned by a decline in crude oil prices during overnight trading and a stronger-than-expected showing on durable goods orders. The Russell 2000 (NYSE:IWM) was up about 0.3% in after-hours action, which would translate to a cash opening near 736.

The durable goods report came in at minus 0.5%, better than the forecast for a loss of 1%. In addition, the ex-transportation component was up 2.5%, well above the median analyst expectation for a rise of 0.5%. The ex-trans figure was the best showing since last July. In the immediate aftermath of the report, stock index futures products extended overnight gains. The MBA Mortgage Application survey also came out this morning, and reflected slack demand, with the index down 4.6% and the purchase index off 17.4%. This is a volatile data base and appeared to be overshadowed by the durables surprise.

Large-cap stocks of note overnight included UPS (NYSE:UPS), which was up about 2.8% on an analyst upgrade. In addition, Southwestern Energy (NYSE:SWN) was expected to climb after being named to move into the S&P 500. On the downside, JetBlue Airways Corp. (Nasdaq:JBLU) was off about 1% as the company said . . .

Today, we look at a trio of stocks that could be considered micro-caps, as their market capitalizations are all well below the $100 million mark. Given their small size, readers should be aware of the inherent risks; nevertheless, not only is each selected by a top newsletter, each is also selected as a favorite speculative stock for the coming year.
 
Tony Sagami, editor of The Asia Stock Alert, says “My favorite speculative, home-run idea for 2008 is Man Sang Holdings, Inc. (AMEX: MHJ).” 
 
“I run at a pretty fast pace when I’m in Asia as every day is packed with factory tours,” Sagami says. Despite this hectic schedule, he says, “When I was in China in May, I postponed my entire South China schedule because what should have been a one hour meeting at Man Sang turned into two full days of tire kicking and fact checking.
 
“Man Sang Holdings is one of the leading pearl merchants in Greater China. The company primarily sells in the U.S., Europe, and Asia such as QVC,” he says. “I’m not talking about a fly-by-night, newbie business. This company has been operating for decades ... and it’s been extremely profitable over the years.
 
“I’ve been doing this for 23 years,” he says, “and Man Sang Holdings is the most undervalued stock market bargain I have ever seen. I consider this an undiscovered gem.”
 
Tom Bishop, editor of BI Research, says, “My favorite speculative idea for 2008 is NutraCea (OTC: NTRZ).”

Rice, he explains, is the most consumed food on the planet and NutraCea has found a way to process rice bran into an “extraordinarily nutritious food ingredient/nutraceutical.  
 
“Companies such as General Mills, Inc. (NYSE: GIS), Sara Lee Corp. (NYSE: SLE), Archer Daniels Midland Company (NYSE: ADM) and Purina want to boost the nutritional value of their products.” He says that over 500 companies have signed confidentiality agreements with NutraCea to look into reformulating their products.

Commodity, low-tech businesses usually lack investment fizz, unless that business is somehow tethered to the Utopian world of alternative energy.

One tethered energy source, ethanol, is responsible for more fizz than any other thanks to politicians left and right, environmentalists and sundry rent seekers chatting it up as the most expedient solution to the putative energy-independence conundrum.

The chat is backed by more than rhetoric: it’s backed by legislative muscle. The Energy Policy Act of 2005 requires that at least 4 billion gallons of ethanol and biodiesel be used in 2006, increasing up to at least 7.5 billion gallons in 2012, with an annual increase of approximately 700 million gallons each year. More recent legislation passed by the Senate (but not the House) amps ethanol usage to 8.5 billion gallons in 2008 and 13 billion gallons in 2012.

What’s more, the legislation is heavily slanted in favor of the home team. Imported ethanol is subject to two duties: (1) a 2.5% ad valorem tax and (2) a tariff of $0.54 a gallon, rendering imports uncompetitive.

Citing the potential boon from more favorable energy-policy iterations, influential Lehman Brothers analyst Mansi Singhal on August 30 scribed a research note upgrading ethanol producers VeraSun Energy Corp. (NYSE: VSE) and Aventine Renewable Energy Holdings Inc. (NYSE: AVR) to "overweight" from "equal weight” while upgrading the entire sector to "positive" from "neutral.”

Other analysts are less sanguine, expressing concern that increased capacity means increased pricing pressure and margin squeezes down the road. On that front, Bank of America analyst Eric Brown recently predicted that the "relentless supply" of new ethanol production will lead to a 70% contraction in margins by 2009.

Even less sanguine are the free-market economists who believe ethanol economics are a fiction. The sector can’t exist at industrial levels without subsidies and tariffs; therefore, it exists at the whim of elected officials.

Political intervention invariably produces unintended consequences, to be sure. Corn prices have nearly doubled this year, soft-drink manufacturers have struggled to buy corn and corn syrup and environmentalists have fretted over new stresses on America’s farmland. All have powerful lobbyists with access to Congress’s ear and could stymie future pro-ethanol legislation.

That said, a complete 180 is unlikely. Alternative energy supporters have the wind at their back. The ethanol market thrives and money is being made, though who will continue to make money as competition, output and unintended consequences multiply is anyone’s guess. For that reason, investors might consider ethanol exposure with less of a California-gold-rush tack and more of an established-diversified-company one.

One company fitting the established-diversified mold is MGP Ingredients (Nasdaq: MGPI), a $225-million market-cap based in Atchison, Kan., that tempers its ethanol exposure with specialty and commodity wheat proteins and starches.

Shares of Metabolix, Inc. (Nasdaq: MBLX) set a new 52-week high in intraday trading following news this morning that the Cambridge, Mass.-based biotechnology company will produce the world’s first bio-based and fully biodegradable plastic.