The financial sector in the S&P 500 continues to dive. Most of the stocks in the sector are down big. Some, such as Lehman Brothers (LEH) are down 30% in just the last week.

Others, such as Bank of America (BAC), are hinting that they’ll throw in the towel and cut their dividends. Bank of America is at 52-week lows and down nearly 50%.

The talking heads on tv keep saying that now is the time to buy the financials. That this is the “bottom” for the sector.

But this all reminds me a lot of 2001 and 2002 as the NASDAQ kept falling, taking the tech sector with it.

Eight years after the dot-com bust, the old leaders of the technology sector are still mired in averageness. Sure there are newer companies such as Google and RIMM that have soared in recent years. But outside of Apple, the old tech names that were owned by every mutual fund on the planet in the 1990s haven’t done much.

When the mighty fall, they stay down for a long, long time.

No one was hotter in the late 1990s than the tech titans of Microsoft, Intel and Cisco. But in the last decade, the story has been completely different. In 2003, the NASDAQ crash hit a bottom. But the individual stocks have yet to recover.

On June 9, 2003, Microsoft (MSFT) traded at $24.65. Yesterday, it closed at $27.12.

On June 9, 2003, Cisco (CSCO) traded for $17.41. Today it’s at $25.65.

On June 9, 2003, Intel (INTC) traded for $21.31. Today, it’s trading at $21.81.

These stocks were up and down during these five years. But if you bought and held at the “bottom” of the NASDAQ bust (which 2003 was), you still haven’t made hardly anything.

This will also be true of the financials.

They are not yet at the bottom, but even when they get there, they won’t be the “bargain” you think they are. For one, their earnings won’t come close to matching the prior few years. This also happened with the tech sector. It’s taken years to even come close to the boom years.

And with stocks, earnings are really everything.

So before you jump into the sector that is getting beaten down, think about the sectors that are soaring.

Buy those instead.

As most of you know, I’m a big advocate of the “buy and hold” strategy of investing. And, actually, I really like the “buy, hold and dollar cost average to your position” strategy.

Well- if you had bought Pfizer (PFE) at any time in the last 8 years, that strategy has gotten you nowhere. In fact, it’s losing you money nearly every single year. Even if you’re dollar cost averaging.

A Marketwatch columnist discussed in April 2008 a few of the most recommended stocks by newsletter editors:

With that thought in mind, here are the stocks that, as of a Sunday-evening deadline, are most popular among the nearly 200 newsletters tracked by the Hulbert Financial Digest. Notice that GE remains most popular, despite Friday’s carnage:

Company Ticker # newsletters recommending

General Electric Co. GE 21
Johnson & Johnson JNJ 18
Apple Inc. AAPL 15
Pfizer Inc. PFE 14
Microsoft Corp. MSFT 14

Why is Pfizer still among the most recommended when its returns have not only just been bad, but been dismal?

Here are the grim stats:

1. The stock has been down three of the last five years.

2. The stock is down 15.36% year-to-date.

3. Total 3 Year Return: down 10.01%

4. Total 5 Year Return: down 8.40%

Was this a good investment?

If you had invested $1000 on January 1, 2003 and reinvested all dividends, you would have $809.80.

Pfizer just hit an 11 year low. And it continues to slide.

This stock is one of those that just slowly eats away at your investment instead of turning down, say, 15% in one or two sessions. You might be apt to sell it if it sold off suddenly. Instead, it slowly declines and all the while investors “hope” for that turnaround.

Is Pfizer cheap?

But maybe you should now be adding to your position? Right? Maybe Pfizer is a “value” stock?

Here are its stats:

1. P/E is 16.82

2. P/S is 2.70%

A P/E of 16.82 is NOT cheap. In fact, that wouldn’t even qualify as “value” by most value investing stock pickers who normally look for companies whose P/E is below 15.

And to top it off, Pfizer isn’t even growing. Yes, they are paying a big dividend of 6.90%. But you can invest in other companies that actually have a growth plan for the future with a similar dividend.

Conclusion:

Pfizer is NOT a hidden gem. It’s not a deep-value stock that the market is ignoring.

It’s just slowly eating away at your investment.

Attention all newsletter writers: It’s time to change your tune on Pfizer.

There are far too many good companies to invest in out there to bother with Pfizer. Someday, it really WILL be a value pick. I’ll let you know when that happens. Given the slow bleed, we’ll all be waiting awhile.

Barron’s Magazine has a cover story this week about how investors should be buying GM, which is at 26-year lows. The reasoning is that through the cost-cutting and re-tooling, the stock could double or triple in the next few years.

My response to that?

Yawn.

Why, in heavens name, would you want to own a company that is doing nothing but losing money? Even if you might triple your money in the next three to five years?

Forget the car companies. Buy industries that are making gobs of cash. One of those industries right now is the fertilizers.

How much money will they make? We got a peek when small fertilizer company Intrepid Potash (IPI) reported earnings today.

The numbers from Reuters:

-Net income rose 417% to $33.1 million from $6.4 million a year earlier.

-On a pro forma basis, earnings increased to 27 cents a share from 5 cents.

THOSE are earnings. Forget GM.

I’m not endorsing Intrepid Potash, which is trading around 120 times earnings (even with this increase in earnings.) The stock is overpriced.

But other, larger, fertilizer companies are going to see sharp rises in earnings as well. CF Holdings (CF) is trading around 16 times earnings. Potash of Saskatchewan (POT) around 20 times earnings. Potash is one of the largest potash fertilizer companies in the world.

As an owner, which is what you are when you’re a shareholder, do you want to own a company that is making gobs of money or one that is losing gobs of money?

That’s what I thought.

Again, forget GM. There are much better companies to invest in out there.

Sorry Barron’s.

(In full disclosure, the author of this article owns shares of Potash (POT) but none of GM.)

Sears (SHLD) reported earnings yesterday and it wasn’t that great.

Is anyone surprised? Who shops at Sears anymore?

Not me. EXCEPT- for the Lands End clothing line.

The company should spin off Lands End.

Otherwise, for clothing, shoes, make-up and the like, I (and my friends) go to Target, JcPenney or speciality retailers like H&M, Forever 21, and Gap.

Heck, I buy more make-up at Walgreens than I do at Sears.

For men, I know that Sears has a great tools division. But is that enough? It doesn’t seem like it to me. From CNBC:

Sears Holdings Chairman Eddie Lampert himself said that he didn’t see a near-term turnaround in the consumer economy and admitted that sales were below where the company wanted them to be. The strategy is now about focusing expanding the brands that the company owns and adding more “names” to the product portfolio in order to get people to shop.

We could be watching the end of Sears. But would anyone know it or care?

I remember when Woolworths went under. Woolworths was older than Sears. It used to be in every town across America. But when it went under, it went quietly. Because, frankly, by that point no one was shopping there anymore anyway.

How would you “save” Sears? Is there any way to do so at this point? Even sales don’t bring in the crowds anymore.

Retail moves in cycles. Sears has been a great retail name for many generations. But it looks like that’s about to come to an end.