AMAZON.COM $74.71 (Nasdaq symbol AMZN; SI Rating: Extra Risk) (206-266-1000; www.amazon.com; Shares outstanding: 428.6 million; Market cap: $32.0 billion) is a pioneer in online book retailing, with 4.7 million titles, as well as DVDs and music. Other products, ranging from electronics and computer games to toys, make up 42% of sales. Amazon Web Services lets online sellers market on its web sites. In the three months ended December 31, 2008, Amazon’s revenue rose 18.2%, to $6.7 billion from $5.7 billion a year earlier. Electronics sales were particularly strong, gaining 46%, to over $1.7 billion. North American sales make up 54% of total revenue, and rose 18%. International sales, which account for the remaining 46%, rose 19%. Earnings rose 8.7%, to $225 million, or $0.52 a share, from $207 million, or $0.50. Amazon holds cash of $3.7 billion, or $8.64 a share. The Kindle electronic book reader continues to be a strong seller for Amazon. The company recently released the Kindle 2. It’s still the size of a paperback and sells for $359 U.S. (Like the first version, Kindle 2 is only available in the U.S.) Kindle 2 is thinner, faster and lighter than the first Kindle, and has a longer battery life and more storage. Kindle downloads account for over 6% of sales of the 230,000 titles available on Amazon.com in both electronic and paper versions....

Some investors wonder if now is a good time to sell short — that is, sell borrowed shares in hopes of a drop in price. I’ll say “no,” based on my view of today’s market trend, and on the perennial drawbacks of short selling. The time to sell short is when the market has been booming and investors are confident and have profits to invest. That’s when you find lots of stocks trading way above any reasonable estimate of value. Today, after 20 months of market decline, conditions are more like the opposite. Many stocks are highly attractive, based on any reasonable assessment of their value....

J.P. MORGAN CHASE & CO., $33.26, New York symbol JPM, earned $2.1 billion in the first quarter of this year. That’s down 9.8% from $2.4 billion in the year-earlier quarter. Earnings per share fell 40.3%, to $0.40 from $0.67, on more shares outstanding. Still, the bank’s earnings beat analysts’ forecasts of $0.32 a share. Revenue rose 48.2% during the quarter, to $25 billion from $16.9 billion. Morgan’s purchase of Washington Mutual last September was a big reason for the gain. Because of this, Morgan’s average total deposits rose 62% from the prior year, to $345.8 billion. The number of chequing accounts jumped 126%. As well, Morgan’s investment-banking division posted higher revenue. This was driven in large part by higher fee income from underwriting new bonds, as well as trading gains. The recession continues to weigh on the bank’s loan portfolio. During the quarter, provisions for loan losses rose 94.3%, to $8.6 billion from $4.4 billion a year earlier. (These provisions are not actual loan losses, but accounting rules require banks to estimate their future loan losses and deduct these from their revenue.) Morgan raised its provisions for credit-card and home-equity loans; this was the main reason for the jump....

IVERNIA INC., $0.15, symbol IVW on Toronto, could move down now that Griffin Mining (symbol GFM on London) has withdrawn its hostile takeover bid. The cash offer was worth $27 million (Canadian), or $0.15 per Ivernia share. Ivernia develops and explores for minerals. Its main asset is its Magellan lead mine in western Australia, which is currently closed. On April 1, 2009, Ivernia amended the terms of $20 million U.S. worth of convertible notes held by Sentient Global Resources Fund II. It also issued new notes to Sentient, which raised $10 million U.S. in cash....

WELLS FARGO & CO., $19.61, New York symbol WFC, jumped over 30% on Thursday after it reported that it expects to post first-quarter earnings of $3 billion, or $0.55 a share. This is more than double the consensus forecast of $0.26 a share. Wells Fargo said the higher earnings were driven by strong growth at its traditional banking services and improved results at its investment-banking division. It also reported that residential mortgage applications rose 64% from the year-earlier quarter. Part of this gain was caused by Wells Fargo’s purchase of Wachovia Corp. earlier this year. Wells Fargo has already written down most of Wachovia’s troubled loans and securities, and is doing a good job of integrating Wachovia’s operations into its own....

CALIAN TECHNOLOGIES, $13.99, symbol CTY on Toronto, rose this week after it won a five-year, $100-million contract extension from Canada’s Department of National Defence. The contract includes options for four additional years. If the military exercises these, the contract could last up to nine years. Calian has provided the Canadian military with simulators and training services since 1995. The Canadian Forces, especially the army, use Calian’s simulators to plan and train for military operations. Aside from the Canadian military contract, Calian’s systems engineering division sells hardware and software that is used for testing, operating and managing satellite and other communications systems. The division accounts for 36% of Calian’s revenue....

FORD MOTOR CO., $3.25, New York symbol F, reported that its U.S. sales dropped 40.9% last month, to 131,465 vehicles from 222,337 in March 2008. However, sales were up 30% from the previous month. Ford has launched a new insurance plan that will cover a buyer’s monthly car payments for up to a year if they lose their job. This plan will probably hurt Ford’s earnings. However, Korean carmaker Hyundai uses a similar incentive to bolster its sales. Other carmakers, including General Motors, plan to follow suit. Unlike GM and Chrysler, Ford has not asked for government assistance. Ford could increase its market share if these competitors go bankrupt or cut production further. However, the bankruptcy of GM and Chrysler would probably force several parts suppliers to go out of business. A parts shortage would hurt Ford’s ability to keep operating....

PULSE DATA $1.17, symbol PSD on Toronto, fell over 15% this week after it announced that it was temporarily suspending its $0.05 quarterly dividend. The move was spurred by lower oil and gas prices, which pushed down exploration spending. Lower exploration spending hurts Calgary-based Pulse Data’s seismic data library sales. Suspending the dividend will save Pulse $2.6 million each quarter. Directors and senior managers are also cutting their pay and lowering the company’s administrative costs. In the three months ended December 31, 2008, Pulse Data lost $1.6 million, or $0.03 a share, compared to profits of $1 million, or $0.02 a share, a year earlier. The loss was mainly because of an 8.4% drop in data library sales, which provide 82% of Pulse Data’s revenue. Cash flow per share rose 13.3%, to $0.17 from $0.15, partly because share buybacks drove down the number of shares outstanding fell by 1.6%....

We think this market rise could last for weeks if not months. It could even turn out to be the start of a new long-term rising phase. One positive sign is that many stocks are now cheap in relation to their dividends and assets. Many are also cheap in relation to current earnings. Others are attractive, despite recession-depressed profits, because their earnings will probably bounce back when the recession ends. Rather than buy purely on value, however, you need to focus on high-quality investments — the ones we rate as “Average”or “Above Average”in our WSSF rating system....

We generally advise against investing directly in China and other emerging markets. These markets are highly volatile, and growth can be swift. But gains can quickly evaporate in a recession like today’s. More important, investors enjoy far less legal protection in emerging markets. That’s why we prefer to buy U.S. companies with profitable Chinese interests. A long-time favorite of ours, Yum Brands, was the first fast-food company to enter China (in 1987). It is now the largest in China, with nearly 3,600 restaurants. Its established brands and size give it a big advantage over its rivals. Yum is building on its success by launching a chain of Chinese restaurants in China. Yum’s stock has dropped by a third over the past year, mainly due to weakness in the U.S. But at around 13 times its likely 2009 earnings, the stock is a particularly attractive buy....