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There are some who say that video games will be just fine during the economic crisis. Of course, you have to consider who's spouting this idea when evaluating it. According to this article, gaming giants Microsoft (NASDAQ: MSFT) and Sony (NYSE: SNE) believe that the upcoming holiday season won't be so tough on their PlayStation 3 and Xbox 360 consoles. They agree with some pundits who think that people will look to drop several hundred dollars on a system as opposed to spending even more on bigger-ticket items such as a vacation. If people cocoon in their homes during this terrible time period to save cash, then they may want to play video games. That's one dimension of the argument.

The other is that consumers may turn to escapist fantasies and casual diversions to take their minds off their problems. In this sense, video games are no different than the movie industry, which is supposed to be resistant to recessions. Again, companies like Disney (NYSE: DIS) and Time Warner (NYSE: TWX) make content that can immerse you in worlds that are different (and more fun) than the one you currently exist in.

Both arguments make sense. Many video games are like movies these days, so comparing them to the film industry is important. And video games definitely are cheaper than a trip to Walt Disney World. However, there are a few things to keep in mind when thinking about these concepts and making an investment decision. First, we are arguably in an environment that we've never seen before. The variables are so different these days. Who's to say how recession-proof movies are going to be, let alone video games? An Xbox 360 can be had for $200. So what if it's less than a trip to Mickey Mouse's castle? Consumers will still be aching. At the very least, if parents don't cut back in terms of buying Johnny a system for Christmas (and they may not, since parents oftentimes refuse to disappoint their kids during the season of Santa), then surely the households who already have one system installed will think twice about installing a second system (yes, many households have multiple systems).

I remember when Rocky Mountain Chocolate Factory (NASDAQ: RMCF) was a cool stock. Unfortunately, that was then and this is now. The economy is horrible, and it's getting worse. Rocky Mountain is not the company with which to ride the storm out.

The third-quarter earnings report, issued on Thursday, showed terrible data. Revenues declined well over 16% to $6.3 million. Earnings per diluted share took a big drop of 30%, coming in at $0.14. And it doesn't stop there. Comps for franchised outlets dipped over 2%. Same-store pounds of products bought by franchisees dropped 10%. Let's face it, people are cutting back on Rocky Mountain's confections. I'm sure they're delicious, but it just doesn't matter. Rocky Mountain is going to continue to struggle as we make our way through this macro mess. Management points out that the stock does pay a dividend of $0.10 per quarter. That gives a yield, as of Thursday's closing price, of just about 6%.

That's not bad, and I suppose if you're a long-term value investor who has extremely solid patience, you might want to take a look at Rocky Mountain's shares. I mean, we all know that equities are pretty irrationally priced these days. But, would I step in and buy the stock as any sort of defensive position for my portfolio? No way. I think it's headed lower. And besides, if I wanted to step in and buy something related to confectionery pleasures, I'd probably consider Hershey (NYSE: HSY) first. Not only am I a big fan of the Reese's peanut butter cup, but I perceive the portfolio controlled by Hershey to be a lot more valuable in these troubled times than Rocky Mountain's line of products. Let's hope all the Halloween trick-or-treaters out there are gearing up to help out the confection industry at the end of this month by demanding a whole lot of treats. Goodness knows, the market has already had its share of tricks this year.

Disclosure: I don't own any company mentioned; positions can change at any time.

There's no question that Johnson & Johnson (NYSE: JNJ), whose corporate colleagues include Merck (NYSE: MRK), Pfizer (NYSE: PFE), and Procter & Gamble (NYSE: PG), is a respected institution on Wall Street. It's a proud member of the Dow, and we all know the company's products: Band-Aid, Listerine, etc. J&J also makes diagnostic equipment and pharmaceuticals. It's truly a respected icon, as Steven Halpern found out.

Investors will be digging through J&J's third-quarter numbers next Tuesday, looking not only for signs about the economy but for signs about J&J itself. After all, everyone wants a defensive stock in their portfolios. A lot of companies aren't looking so defensive these days. Could J&J be the one?

According to Earnings.com, you shouldn't get too excited in terms of growth. The call for the bottom line is $1.11 per share. That would only represent low single-digit percentage growth. Of course, these days, that might be exciting enough. As to whether or not the bottom line will beat the analysts, I suppose the game is completely changed at this point, but I figure J&J will pull through on that count. It all depends on how much we can trust history given the brave new economic world we are suddenly faced with. According to this earnings analysis source at AOL Finance, J&J beat estimates the last four times at bat. Due to this strong recent trend, I'll assume J&J will deliver the goods.

So, let's assume J&J does please the Wall Street analysts. What then? Well, it's really going to be the outlook that's going to tell the ultimate tale. We'll have to see if management is going to give some positive thoughts during the conference call. What does management think about commodity costs and margins? What about the cash flows? Then there's the dividend and the share-repurchase program, two things which investors of J&J count on for long-term value. Management had a few things to say about these issues the last time around (please see the following transcript of the Q2 conference call). I think management is going to be cautious, but I don't feel that there will be any disastrous notes struck during the discussion with analysts.

What an interesting time, my friends. Seriously, we're going to look back on this period and laugh about it (maybe, depends on how much you lost, I guess). Not only has the government become one huge hedge fund as the new cliche goes, but perhaps the oddest thing about this entire episode was the ban on short-sellers.

Well, they weren't totally banned. There was a list of stocks that couldn't be shorted, and they were tied to financial businesses. For instance, General Electric (NYSE: GE), a stock I own, was on the list. Why? You see, even though it makes everything from movies to healthcare equipment, a large chunk of the conglomerate deals with financial transactions. Now, the short-selling ban is gone, and financial stocks are once again subject to the whim of the trading technique.

I hated, absolutely hated, the restriction on short-sellers. It never made any sense (check out Tom Taulli's perspective on this subject).

Look, I can understand and appreciate the fact that the government had to get into the business of capitalism. At some point, there was no choice. If we all could choose, we would choose capitalism over helping a bunch of Wall Street goofballs who became intoxicated on noxious greed and who are laughing at us right now for being bleeding-heart enough to do it. We would. But, there was no choice, sad to say.

Costco (NASDAQ: COST), the shopping club that competes with BJ's (NYSE: BJ) and Wal-Mart (NYSE: WMT), reported earnings for the fourth quarter on Wednesday. Sales did well, rising 13% to $22.6 billion. On an adjusted basis, excluding a litigation charge, the bottom line came in at $0.92 per share, and according to this source, that is one penny below expectations. Excluding the effect of gasoline inflation, comparable sales increased 6%.

For the most part, I think Costco held up well during the quarter. Yes, the warehouse club didn't wow the Wall Street analysts this time around. But comps were pretty decent for the quarter, and the top-line performance was acceptable, all things considered. Membership-fee revenue went up by 22%, which was cool.

This doesn't mean that Costco won't have a tough time going forward. As the economy worsens (and it will), Costco is going to face intense competition for the attention of the consumer's cash and credit cards. Keep in mind, though, that Costco has some good brand equity when it comes to discount shopping. The company's image is of a place where people can buy in bulk and get great deals. In a bad market environment, consumers may flock to Costco to save money. So the company might do okay (on a very relative basis) during the crisis.

It's being reported that Playboy's (NYSE: PLA) Hugh Hefner's relationship with Holly Madison is over. Madison, as you probably know, was Hefner's head girlfriend, but he has two others as well: Kendra Wilkinson and Bridget Marquadt. The four of them star in a reality show called The Girls Next Door, which runs on the E! channel. It's a pretty fun show, although it does make me maddeningly envious of Hef's lifestyle. That aside, it seems to be a decent brand ambassador for the Playboy image. Unfortunately, the popularity of the show hasn't been enough to offset losses at the media company. Playboy's stock currently sits below $3 a share. It is the exact opposite of one of Hef's playmates: downright depressingly ugly.

Well, I can't really comment as to how the Hefner/Madison affair will turn out. Will she go back with him? Is this just a publicity stunt? I simply don't know. However, I would imagine that, with Playboy's stock in the dumps, a breakup might be an event that could be exploited to help out the company. Let's face it: the whole three-girlfriend thing is pretty much an orchestrated machine anyway. So, if Madison truly does feel like she's ready to move on with her career, I think Hef should clean house and get rid of the other two girls as well. Then, he could go on a search for three new girls next door (or maybe he should search for more, why stop at just three?). It could be an integrated media campaign spanning the magazine, the website, and a new reality show.

Yum! Brands (NYSE: YUM) reported earnings for the third quarter after the bell on Tuesday. Revenue went up 11% to $2.8 billion. Earnings per share rose 16% to $0.58. Global comps increased 3%.

You know, those numbers are not bad at all. As we await earnings reports, I'm sure that you, like me, are nervous. I mean, we're in the middle of a global economic slowdown fueled by a financial-system collapse, so the data this quarter is going to be particularly telling. The fact that Yum! has double-digit growth to its credit is pretty cool to see.

No, that doesn't mean I'm a bull on the markets all of a sudden, but it does show that people are still stopping by Pizza Huts and KFCs. Guess people won't give those guilty pleasures up during the monetary apocalypse, huh? And let's look at Yum!'s cash flow. While net cash from operating activities year-to-date was pretty much flat at $1.1 billion, it was more than enough to cover the capital spending and dividend obligation. As you can imagine, management highlighted the nice cash-flow generation of Yum!'s business. During a market crisis, it's the thing to do.

According to this source, Yum! beat by four pennies. Shareholders will be pleased by that, and perhaps the shareholders of Burger King (NYSE: BKC), Wendy's/Arby's Group (NYSE: WEN), and McDonald's (NYSE: MCD) can take Yum!'s performance as a good omen for their companies. I can't say that Yum! Brands is going to rocket from here based on the earnings news. But I can say that long-term investors with a lot of patience should have a winner on their hands based on the brand equity of the company and its cash-flow-generating abilities.

Disclosure: I don't own any company mentioned; positions can change at any time.

I just spent the last hour or so looking around the market, trying to find something to buy. I haven't purchased a stock in a while. I'm in the mood. But, you know something, it's pretty tough out there, to state the very, very obvious.

I read a piece today by my colleague Sheldon Liber in which he takes Jim Cramer to task for being too bearish. Sheldon makes some great points. In fact, he inspired me to find something out there. Unfortunately, I came up empty. I mean, I was looking at adding some shares of Marvel (NYSE: MVL) to my existing position in that stock. To be honest, I felt more inclined to preserve the profits in that stock by selling out of the position. Yet, Marvel at under $30 isn't a bad buy, in my opinion. Still, I didn't feel like adding, and that felt completely anathema to my emotional mindset.

I then thought about Disney (NYSE: DIS) and General Electric (NYSE: GE). And Coca-Cola (NYSE: KO). Nothing felt right. Nothing. Why? Well, I just don't see the merit of adding to positions just yet. Simply put, I see us going down instead of up. The market action today in the major indexes is not encouraging at all.

It's funny, because this is a case of the two sides of the same story being right. Cramer is correct in that the selling is not over. Sheldon is correct about there being values out there. But things feel so troubled. I mean, why isn't Coke rallying with all the chaos? Yes, I know many investors are concerned about growth at the company, but shouldn't it be rocketing higher with a defensive premium? Puzzling.

THQ (NASDAQ: THQI), arch competitor of Activision Blizzard (NASDAQ: ATVI) and Electronic Arts (NASDAQ: ERTS), closed under $10 per share on Monday; $9.90 to be exact. It hit a new 52-week low of $9.30 intraday. I've got to admit, THQ under $10 a share sparks my interest.

I also must concede that my interest might be a bit on the irrational side to some degree. After all, I was a big fan of THQ during the time oh so long ago when all its cylinders were firing and the stock was a pretty cool investment. Now that it's hit the magical spectrum of single-digit, does that event alone changes things on a fundamental level? Am I just looking for a reason to buy a stock I once liked and praised?

As of late, problems have befallen THQ. Questions about the quality of its pipeline and delays of key video-game product have plagued the publisher. Indeed, THQ was a weakening company and a weak stock. Why invest in THQ when Activision Blizzard exists? There's definitely sound logic to such thinking. However, THQ is around book value at $10 per share. And the fact that THQ has some cool intellectual properties at its disposal (Destroy All Humans!, Saint's Row, etc.), as well as a cool licensing partner in Viacom (NYSE: VIA) and its Nickelodeon characters, means you've got to figure that the company might start becoming a value at some point.

Are you a Disney (NYSE: DIS) shareholder? If so, then you're pretty happy about the box-office weekend. According to Boxofficemojo, Disney's Beverly Hills Chihuahua was number one over the past three days at domestic theaters. It is estimated to have grossed $29 million. That number may change when final stats are released later on, but it won't change the ranking, since the movie in second place, Viacom's (NYSE: VIA) Eagle Eye, grossed around $17.7 million.

Eye was last week's number-one film, and I have to say, I thought the thriller would remain in the top position this week. That's how Hollywood works, though. You're on top one minute, and then the next minute, you're on the way down.

Movies are a very risky business, and I have been critical of how Disney manages its movie operations. I am a shareholder, and I care about how much capital is put at risk on each project and how the deals are structured. Are they structured with the shareholder in mind, or are they tipped toward the pampered stars who demand big percentages of the grosses while not taking on any risk?

I think IBM (NYSE: IBM), whose colleagues include Microsoft (NASDAQ: MSFT) and Hewlett-Packard (NYSE: HPQ), is a great long-term idea. Unfortunately, it might be a bad short-term idea. According to news from earlier in the week, some analysts are speculating that Big Blue may miss earnings expectations for the third quarter.

The negative catalyst? You guessed it. The terrible economic calamity that is tearing down Wall Street institutions is threatening the iconic technology concern. Not even the Cloverfield monster could do as much damage to Wall Street as what has been done by those mutant-mortgage investment vehicles. Not even close. And the theory now is that IBM may become the victim of its exposure to both customers in the financial sector and to the financing it extends.

However, if you read a rebuttal by my colleague Douglas A, McIntyre, you'll see that he doesn't buy that IBM is going to miss come the next report. He brings up some good points. In fact, he brings up probably the best point there is: IBM hasn't warned yet, and if it needed to, it would have. So the stock sold off during the week in part because of all this debate about Q3. It begs the question: Does this sell-off make IBM a buy?

So, Take-Two Interactive (NASDAQ: TTWO) has had enough of arbitrage. According to reports, management decided that it will remain an independent entity after all. You'll recall that the software publisher was being courted by Electronic Arts (NASDAQ: ERTS). That relationship never panned out. Take-Two said "give us more money, EA." And EA apparently said "no way." It was interesting while it lasted. And if you had sold out of Take-Two when the offer was made oh-so-long ago, you made money. Hopefully you aren't still holding the shares.

I don't know why Take-Two didn't decide to cash out, especially when it was becoming apparent that the economy was headed for a severe downturn. I mean, you would think that executives in a company such as this would have more information than I do and would have known where things may have been headed, or at least have a strong indication. Let's face it: Take-Two is an investment/trading idea based on the notion, in part at least, that it's going to be taken out at some point. Otherwise, you've got one big intellectual property, Grand Theft Auto, to get excited about. Now, truth be told, I know and you know that the company has a little more than just that. There's BioShock, for one thing. But this is the perception on Wall Street, and it's a hard one to fight. And since I already own Activision Blizzard (NASDAQ: ATVI), I don't think, at this juncture at least, I'd want to invest in a second game-software publisher. I'd be going for a shorter-term trade. That line of thinking kind of makes me wonder why management didn't decide to trade out of Take-Two months ago. Oh, I forgot. Greed. Hey, greed might be good, but it isn't always smart.

I don't think Take-Two will remain independent forever. It'll be bought out sometime in the future. Someone will want Grand Theft Auto. Will EA come back to the table? That's a strong possibility. Maybe Microsoft Corporation (NASDAQ: MSFT) or Sony Corporation (NYSE: SNE) will make a bid. Doesn't matter who it is, it'll happen. Just not now, maybe. However, I personally wouldn't consider entering Take-Two's shares until they drop much further from current levels. Below $9 a share would be a cool price.

Disclosure: I own Activision Blizzard; positions can change at any time.

Nintendo (OTC: NTDOY) has had incredible success with its Nintendo DS hand-held gaming device. Sony's (NYSE: SNE) PSP just doesn't have the same heat. And now, the DS is getting an upgrade. It's to be called the Nintendo DSi. The new version is going to have a camera and an SD slot. You'll be able to play music on it. The system will debut in Japan on November 1. For a look at the specs, and a comparison chart that includes the Apple (NASDAQ: AAPL) iPhone, check out this item at Joystiq.com. In terms of North American availability, it has been reported that it will be released in this territory sometime in 2009.

So, what does this mean for those who may own shares of Nintendo? Well, in case you haven't noticed, the price of the ADR's are sitting a little too close to a 52-week low. And quite honestly, I think they're going lower. The reason I think they're going lower is exactly the reason you think it is: the market for equities is awful. The financial crisis has become a global-sized blob, consuming everything in its path. It's a shame, too, because I think Nintendo has a decent shot at doing well with the Nintendo DSi. Even if it does, though, there's no way anyone could say "buy Nintendo now" ahead of the roll-out since the technicals on the stock, and for the market indexes at large, aren't too pretty.

Nintendo closed at $46.26 on Thursday. The 52-week low is $45.80. The shares are in bear mode for certain. I was really hoping to have an excuse to dive back in for a holiday trade. Now, that hope is deader than a mortgage-laden financial stock. Longer-term, I think Nintendo will do just fine as an investment vehicle. But, you'll be waiting a while, I'm afraid. And even if you want to buy for a long-term portfolio, like I say, you'd probably do well to remain patient for a lower entry price. How low do I think it's going? Below $40 looks to be a given, but I wouldn't be surprised to see Nintendo's ADR's dip under $30 at some point. Now that would be one heck of a compelling price, wouldn't it? All depends, of course, on what the macro situation is at the time...

Disclosure: I don't own any company mentioned; positions can change at any time.

Pepsi Bottling Group (NYSE: PBG), a competitive colleague of Coca-Cola Enterprises (NYSE: CCE), reported earnings for the third quarter earlier in the week. I didn't find the release too exciting, to be honest. Revenues went up 2% to $3.8 billion. Earnings came in at $1.06 per share. In last year's quarter, Pepsi Bottling Group booked a bottom line equal to 98 cents per share, after adjustments. In terms of expectations, the company beat the analysts on Wall Street by two pennies better.

While an earnings beat is certainly a nice thing, let's take a look at what is perhaps one of the more important metrics when it comes to beverage manufacturers: case volume. I'm afraid there's nothing to write home about as far as this statistic is concerned. Case volume took a dive around the globe by a disappointing 6%. Management cited hard economic times as a contributing factor. Imagine that. You'd think that products found in the portfolios of Coca-Cola (NYSE: KO) and PepsiCo (NYSE: PEP) would be pretty defensive in a tough economic period. Apparently, Pepsi Bottling Group found it difficult to distribute more of its drinks this past quarter.

Long term, I think Pepsi Bottling Group will be okay. But I think both PepsiCo and Coke need to find better ways of convincing people to continue to drink their flagship carbonated beverages. They've been on the decline over the past several years. As a stock, Pepsi Bottling Group isn't on my watch list. I already own shares of Coke, but even with that bias, I can honestly say that I wouldn't want to enter the bottler at this time. I'm not impressed with either the growth or the year-to-date stock performance.

Disclosure: I own Coke; positions can change at any time.

Yum! Brands (NYSE: YUM) wants to educate its patrons. No, it's not going to be offering history lessons to go along with its personal pizzas, fried chicken and burritos. It just wants to make sure you know exactly how many calories are in the stuff you eat at its restaurants. The information will be posted at company-owned locations over the next few years. Management is hoping that franchise locations will also participate in the initiative (I'm sure most eventually will).

Personally, I think this is a great idea. How could anybody be opposed? After all, if I'm in a Pizza Hut, I want to know how much damage I'm doing to myself. Yes, I am one of those people who actually checks out the nutrition pages on the sites of fast-food joints such as McDonald's (NYSE: MCD), Burger King (NYSE: BKC) and Wendy's Arby's Group (NYSE: WEN).

But yes, there is a downside for shareholders when this type of information is made available. Indeed, the more I've learned about the health effects of a bad diet, the more conservative I've been about going to a KFC or a McDonald's. No doubt Yum! will see some challenges from people scaling back on buying the junk food it sells. Will there be a significant effect? Will Yum! and its various chains disappear as a result of this decision? No. Management will simply adjust, if it becomes necessary, and will try to offer healthier selections.