JJC:   Gold is skyrocketing...  Oil has finally done it... It hit $100 bucks a barrel...  We got higher prices, less economic activity, and inflation... and how about a presidential campaign in Iowa that will likely give us some candidates that the market thinks are awful for business?...

So it's no wonder we were down 221 points in the first trading day of 2008...

It's a pity, but it's also one we've dealt with over and over again here in Cramerica, and it's one we'll keep dealing with because, alas, there is always some bull market kicking around somewhere...  and today's market screams that oil and infrastructure, and this nation's absolutely absurd love affair with ethanol will make 2008 look a lot like... yep... 2007.

The only adjustment we need to make is we need to add gold, which is why I was already commenting earlier in the year that I thought it was good for insurance, right?... But now it looks like insurance is paying off...  So let's just take down some gold for investment... It's Barrick (ABX) for mainstream gold, and Yamana Gold Inc. (AUY) for growth gold...

.  .  .  .  .

Since this year is looking a lot like last year already, we don't need to focus on how bad the tape is - meaning the broad proclivity of stock...  We need to look at what went right first... and then what went wrong in 2007... particularly with things I predicted... so that you can apply these lessons, and keep on trying to make some mad money in this new year... 

.  .  .  .  .

At the beginning of 2007, I picked nine stocks of the year... three value, three growth and three speculative..

The stocks collectively were up an average of 16.4%, compared to 4% for the S&P...

So, even though I'm all about - as everyone knows - self flagellation and self-mutilation... the results mean we need to focus on what worked, rather than on what didn't...

For value, I picked Goldman Sachs (GS*), up 7%... I picked Altria (MO*), up 16%... and I picked Halliburton (HAL), up 27%...

Yeah, all winners...

.  .  .  .  .

For growth, I picked Cisco Systems, Inc. (CSCO), down 5%... Apple Inc. (AAPL), up 131%... and NYSE Euronext, Inc. (NYX*), the worst trading stock I have ever seen, for most of the year, which finished down 8%...

.  .  .  .  .

My speculative picks were Savient Pharma (SVNT), which I then told you to swap out of, to BioMarin (BMRN)... on September 28th...  That gave you a 77% return... and then two real clunkers... Rite Aid Corp. (RAD), down 50%... and Level 3 (LVLT), down 49%...

But we still managed to come out on top...

.  .  .  .  .

There's a lot we can learn from getting introspective here... and then analyzing what went right...

First and foremost, these stocks of the year show that, if you contain your losses, your winners will get there.

Remember, one of the things we learn, and we keep teaching is, if you can cut your losses, you are going to make money.

We didn't have any big losers in the growth and value groups...  And you can see how an AAPL or a HAL - the two big winners - took care of all the upside...

.  .  .  .  .

The second takeaway is that you need to stick with your winners...

AAPL had been a big winner in 2006.  We liked it then...

Then, you could have gotten out, but nothing had changed, except that it had gotten better, with the iPhone...  with more iterations of iTunes and, most importantly, with the actual old Macs... and it made you more money.

Winners win and losers lose... what a cliché... but, most of the time, it's just that simple.

You've got to remember that the market is really - in the end - just one big herd and, most of the time, herds aren't that sophisticated, and that means, if you're out-thinking things, well, you're going to get it wrong.  Losers will hurt, and winners will help.

As long as AAPL keeps growing at 30%, I'm on board...

.  .  .  .  .

The third takeaway is that even the worst stock in a good neighborhood... the absolute worst stock in a good neighborhood... remains in the house of pleasure...

I'm talking about here... Prince Halliburton (HAL)... Do you know, that was the worst of the oil service bunch?... and it's still a winner...

The Oil Service Index (OIH) was up about 42%... HAL was only up 27% for the year...

You would have been better off owning a different oil driller, but anything in that sector worked, because rising tides do lift all boats...

.  .  .  .  .

The fourth lesson...  slow and steady can win the race in stocks.

Do you know that there was absolutely nothing exciting about Altria (MO*), which is the old Phillip Morris?...  It was just a weak dollar play with a strong dividend... I own it for the trust.  But it beat the averages handily...

One of the things I like is that there's a guy there by the name of Dinyar Devitre, who's the CFO... I am telling you something... that guy should stick with the company, because they are the best, well-managed money team I have ever seen.  

.  .  .  .  .

The last thing that I want you to learn from these stocks is that biotech is the true stuff of dreams... and, while it's high reward...

Both Savient (SVNT) and BioMarin (BMRN) were big winners.

Of course, my other speculative stocks... they got annihilated... 

.  .  .  .  .

On a big down like today, it's important to look back at what's worked, so you can duplicate it in the future.  And not let yourself get all depressed, and hopeless, and homeless... because the tape was so ugly...

.  .  .  .  .

The Bottom Line!:   If you contain your losses, your winners will win.  You need to stick with those winners, as long as the fundamentals underneath stay the same...  Even the worst stock in a strong sector can make you money.  Slow and steady stocks can win the race for you and, if you're going to speculate in 2008, biotech is the field to speculate in.  Stick with Cramer to see me stick it to myself for what went wrong with the stocks of the year, and then, later, I'll actually tell you what to do with all these stocks, and which ones are still super-deduper strong buys.

I have not talked to an investor on the phone in ages, although a lot of guys bothered me yesterday trying to get me to recommend a bunch of stocks I don't like, like Elan Corp. plc (ELN)...

[See Jim's 2nd Opening Segment stock picks below... ]