Yesterday I was shocked by the response to a poll I conducted in this very same column where I suggested that six out-of-favor stocks were a buy and would out perform the over all market. The results left me puzzled for several reasons.

For one thing I have been blogging for Aol. for over four years and I cannot remember an occasion that there was so much unanimity on anything before. I expected approximately equal votes for each of four possible responses to my question, and an appreciable number that might think I was off my rocker. Instead, I was jolted to a new reality when 84% of the respondents agreed that the six toxic stocks would outperform.

The six stocks are Bank of America (BAC), Citigroup (C), General Electric (GE), BP p.l.c. (BP), Goldman Sachs (GS) and Transocean (RIG). I thought I was taking a contrarian position and based on recent market activity that would seem to be the case. This raises another question. If my readers are any reflection of the market, how could the market move in the opposite direction of such overwhelming sentiment?

Tomorrow is filled with the potential to boost the market upward, or trip it up going into the weekend. Three financial giants are reporting: Bank of America Corporation (BAC), Citigroup, Inc. (C) and General Electric Company (GE). This could set the stage for a continued market rally next week as earnings season has been generally positive and a trend is developing.

Expectations are high, following solid quarters reported by State Street (STT) last week that surprised many, and JPMorgan Chase & Company (JPM), who followed up with a big beat this morning.

Sentiment seems to be on the bullish side as tomorrow is also options expiration time and those betting on the banks should be pleased to book some gains.

To continue the saga of what might be on Warren Buffett's foreign wish list, consider the current holdings of Berkshire Hathaway (BRK.A/BRK.B), the largest of which is insurance. The insurance industry has been hard hit by the economy, but it also has the greatest potential to rebound of any industry. Insurance companies have huge cash flow and a large float (mandated by government regulation) that can be used for investments. This has been a major contributing factor in Buffett's success.

Unlike the construction, automobile or financial sectors that have been met with an economic tidal wave that destroyed demand, there is no lack of demand in the insurance industry. The insurance companies have been hurt by the shrinking of their investment portfolios more than loss of demand or even claims, accepting companies that wrote swaps, like American International Group (AIG).

When next "my pal Warren" invests abroad he may not have to go very far.

Let's go around one more time with American Eagle Outfitters (AEO), the retailer with the pristine balance sheet that designs and manufactures its own clothing line targeted at the 15 to 25 year old age group.

It was one of my successful picks for 2009, rising from $9.13 to a closing price of $16.98, with a 52 week high of $19.86. Today it is trading near its 52 week low of $11.35, opening at $11.61 and trading up at mid-day.

I think this eagle will soar again and surpass it's previous high.

The long awaited Initial Public Offering (IPO) of Tesla Motors (TSLA) stock hit the market at $17.00 a share and it is up in a down market, trading between $18 and $19 throughout Tuesday morning.

I say stay away. First and foremost, investors should take note of the fact that most IPO's end up as losing propositions. In the case of Tesla, which lost over $55.7 million last year and will lose more this year, the bleeding has just begun.

The car manufacturing business is very capital intensive and Tesla only hopes to stem the tide in 2012 when it projects a production run of 20,000 Model S all electric sedans for $50,000 each.

Earlier today, I posted Whose Best Interests Are Served If BP Is Pushed into Bankruptcy? where I disclosed having taken a position in BP p.l. c. (BP), and for better or worse my first test will be the market close on July 16, 2010.

Over the past year, I have started reporting on various put options that I have been doing. In today's example, I sold to open BP at a July strike price of $22.50 (a naked put), receiving $0.50 per share.

My break even is $22.00, and the stock opened today at $27.65 with three weeks to go.

The daily cost of operations, clean-up and restitution to BP plc (BP) has reached $100 million per day (over the last three days), according to the company. Unless this is being broadcast to garner unlikely sympathy from a angry crowd, then the costs have reached a magnitude I would have thought unlikely, and my contrarian bet on BP may be at risk.

It's important for me to disclose from the beginning (not just in the footer) that I have wagered that BP is oversold through options and equity. How much so depends on a lot of factors. I made this calculated risk based on the assumption that forcing the company into bankruptcy is not in anyone's best interest. However, I am once again reminded of a great line from the The Maltese Falcon, in which Kasper Gutman cautions Sam Spade:

Today we expand on investment criteria and start to look at actual stocks of non US companies that might be in the running for inclusion as one of Berkshire Hathaway (BRK.A/BRK.B) foreign holdings.

In searching for global investment prospects that might interest Warren Buffett we have established that newly allocated capital would most likely pursue companies that pay a dividend and make products or operate in sectors that are well established and have a high level of certainty to exist decades into the future. This is basic to "my pal Warren's" investment philosophy, and there is no reason to think this will change.

In Part 2 of this series we then examined the size of a potential investment settling on a general range from $4 billion to $24 billion.

There are many places that Warren Buffett may choose to invest Berkshire Hathaway (BRK.A / BRK.B) capital. At the same time you can be sure there are places he will not set foot. It is not likely he will invest anywhere that does not have a vibrant, well-established stock market with a stable government. So, Mr. Hugo Chavez in Venezuela will not likely see any capital deployed from the likes of "my pal Warren" any time soon.

As a matter of fact, I would put the chances at slim of any South American country, besides Brazil, getting a look at all. Brazil is just too big and too vibrant to ignore. I would rule out Africa entirely except for indirect investments in oil and minerals through large conglomerates. The closest thing in the region would be Israel, at the furthest western reaches of Asia. He has already invested there and there is a high probability he would again. Investors from most of Europe and Asia have done the same, although many would rather not discuss it.

He has also invested in China, Great Britain, South Korea, and Switzerland. I would expect more money to be plowed into all of them again without reservation if the right deal materialized.

Trying to figure out what Warren Buffett will invest in next is no small task. Although, you can bet it will not be small. In fact, he may try to acquire whole companies because anything else might not move the needle when it comes to increasing shareholder value at Berkshire Hathaway (BRK.A / BRK.B).

This post is a follow up to Serious Money: Buffett Looking Beyond Our Borders, where I concluded that Buffett will seek an opportunity to invest in a company that is paying a dividend and has a very easy to understand product or service that will not become obsolete any time soon.

Stories are starting to appear that "my pal Warren" is gearing up for a major foreign acquisition. One of my dear friends Randy S. is taking a post graduate business class at UCLA where this issue is a part of the course. He is supposed to figure out what non US companies Berkshire Hathaway (BRK.A/BRK.B), led by Warren Buffett, might be considering for investment.

Ahh yes, the prediction business, quite tricky indeed. Starting with some basics, in most cases I would stick to the time tested philosophy that past performance is not an indicator of future success. That said, I think in the case of Buffett, it does. There are many clues along the trail based on his past performance.

Here are some basic consistencies from the existing portfolio that I would expect to hold true going forward.

If you're a stock trader, then this post is not for you because these stock picks are long-term bets for people looking to beat the traders using the best time-tested strategies. We have been in a very volatile market as of late. It has knocked down many quality companies creating opportunities.

Today I ran a stock screen using six value metrics to find big companies with low stock prices. I found a few dozen, but selected the household names.

All it takes is one story to ignite the market, reverse fortune and increase volatility. In the past two weeks this has happened a lot, as the tug-of-war between bulls and bears plays out. The fervor created by headlines portrays investors with little conviction about what to do with their money.

Inflation or deflation, what can we look forward to? Is China going to blow-up its economy with its very own housing bubble? Will Greece default and others follow? Will BP p.l.c. (BP) stock fall deeper than its undersea gushing Gulf of Mexico oil well, and take other oil service companies down with it?

Does any of this matter -- yes and no.

Voltaire said, "Common sense is not so common" and George Bernard Shaw commented that having " ...enough of it was genius."

This reminds me of Warren Buffet, CEO of Berkshire Hathaway (BRK.A) or Steve Jobs, CEO of Apple Inc. (AAPL) that have both displayed plenty of the former and arrived at the latter in their business pursuits.

Derivatives like Collateral Debt Obligations, or CDO's, and Credit Default Swaps, get their value from something else entirely: total hype in an environment of smoke and mirrors.

It turns out that if you build layer upon layer of derivatives until you have no idea what the original underlying value truly is, it becomes so convoluted that a genius can't comprehend it at all. It is self evident that nobody could even determine all the counter-party risk.

One of my 2010 stock picks seems to be adrift closer to its 52-week low ($11.52 July 8, 2009) on a long slow downtrend. On June 2, 2010 E-Trade (ETFC) did a reverse 10 for 1 stock split and is now trading back in the teens, having closed last Friday at $14.06. For the time being, it is trading under the symbol ETFCD.

This allows many pension funds and other institutions to hold positions in the stock that they could not before when it was under $5.00 per share (significantly) due to restrictive investment guidelines.

E-Trade management may have been counting on this to inject some life in the stock or at a minimum some additional support. This has not been the case as the stock continues to erode with the other financial stocks.