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A bear market is not tolerant of aggressive behavior. The effects of your mistakes are magnified—the secret to surviving the bear market is adapting.

We got a great response to Wednesday’s Cabot Wealth Advisory about Peak Oil, and many of the responses are reproduced in today’s issue.

Intellectually, everyone knows that the right time to get into the market is at the bottom. Stocks are cheap and there are bargains galore. Unfortunately, figuring out when a bear market is going to bottom is about as easy as knowing when a long-winded speaker is going to quit talking. It can’t be done. Maybe it’s fairer to say that you can’t see a market bottom by looking forward through the windshield. It’s something that can only be seen in the rear-view mirror.

Here’s what I wrote about Barrick in last week’s edition of Cabot Top Ten: The price of gold is in a solid uptrend, and that’s helping all gold stocks, including Barrick Gold. The company, based in Canada, is one of the largest gold producers in the world...most gold stocks simply trade up and down with the price of gold, and for good reason—cash costs for mining activities are holding relatively steady, so as spot and futures prices increase, the extra money will fall to the firm’s bottom line.

If I try to think rationally about this problem, here’s what I get. Debt is bad; equity is good. Consumers and businesses are already working to reduce their debt loads, and as they continue, they will develop stronger balance sheets and greater financial health, which is a good thing. (One aspect of this that is often forgotten is that this debt shrinkage is right on schedule for aging baby-boomers.)

My pick, by the way, is New Oriental Education (EDU), which is thriving by teaching English to Chinese students of all ages, and also teaching test preparation courses. I like it because I think the growth of China will continue at a rapid rate and because I value education highly. Also, the company is fast-growing and very profitable; in the third quarter, revenues grew 50% from the year before while the after-tax profit margin was 43.9% (there’s a strong seasonal component here). And finally, the chart looks good.

The topic is Peak Oil, the theory that global oil production will peak somewhere between 2006 and 2010 and then decline “until all recoverable oil is completed within several decades.”

Each year end, I review my investing strengths and weaknesses, examining stock charts of previous buys and sells, comparing them to market action, and so on.

I recently visited Ruth’s Chris steakhouse in Boston for a wonderful meal. Despite the stigma of being a chain, every meal has been absolutely terrific. Ruth’s Chris (RUTH) just came public in 2005, but has since slid from the mid 20s to 6 1/2. Revenues have grown fairly consistently, but earnings were cut in half during the fourth quarter, and projected to shrink some more this year. The stock just hit a new low today! Thus, I think it’s a good idea for any steak lover to visit one of the premier steakhouses in your area every couple of months. It’s a real treat! But when it comes to investing, the message is clear: Enjoy the steak, but avoid the stocks.

Stock market old-timers will often tell newbies that “the market wants to take your money,” which, on the face of it, isn’t all that credible. After all, lots of people make lots of money on Wall Street. Still, there’s something to the warning, and the quicker you learn about it, the quicker you can start printing your yearly results in black ink, rather than red. So what can you do about it? As any of our longtime readers know, the answer is: have a system.

The ridiculously poor sentiment of the last few weeks leads me to believe the market’s next big move is up.

One thing that I am almost never asked about is what it takes to be a great investor. Everyone is focused on today’s stock, or tomorrow’s headlines. I can literally count on one hand the number of questions I’ve answered that concern building a successful system that will generate above-average profits for years. The funny thing is, that system - while it involves many rules and tools for finding, buying and selling the best stocks at the right times - really begins with the individual. People are usually their own worst enemies when it comes to winning the investment battle.

The stock market and the individual stocks that make up the stock market have always bounced back and forth from overvalued to undervalued to overvalued.

The market appears ripe for a short-term bounce ... but so what? The reason most people want to pick bottoms isn’t really to make money; that’s part of it, of course, but not the sole purpose. The reason they want to pick bottoms is to feel like they outsmarted the market and most other investors. There’s nothing shameful about that, but in the market, wanting to prove that you’re right usually costs you money.

Last year one of the market’s biggest winners was Crocs (CROX). Most people just call them plastic, but we made a lot of money in the stock, and therein lies an excellent opportunity for a lesson in Romance, Transition and Reality.

So which book leads to the investment idea, the book by the dreamers or the book about the doer? There’s no surprise here; it’s Carnegie, the doer. Because today’s idea is about steel and iron ore, once again in great demand by the world. For Carnegie, demand came from the expansion of the American railroad system. For this company, demand comes from the global building boom, particularly in Asia.

Microsoft wants to pay $44 billion - perhaps the largest technology purchase ever - to buy Yahoo! Why? To compete with Google! But does it make sense? Well, from a big-picture point of view, anything that can thwart Google’s dominance of Internet search and advertising probably makes sense for Microsoft, and if they’ve got the cash, there are worse places to spend it. But does this make for an attractive investment opportunity? Do you want to own a piece of Microsoft/Yahoo!, recognizing that the Microsoft part is eight times the size of the Yahoo! part?

Every now and again I like to do a question and answer issue of Cabot Wealth Advisory--we editors at Cabot spend hours each week answering subscriber questions, so we have a large pool to choose from. I think it’s a good idea to share some of these questions with everyone, as much can be learned from a good question and a good answer.

Solar power is one of my top investing concepts for the years ahead. I think solar (along with other alternative energy sources) will gain increasing market share in the years ahead. As costs of fossil fuels rise, the still-high costs of solar power look less prohibitive, especially when various tax credits are factored in. The increase in manufactured volumes means costs are coming down, particularly for the manufacturers that don’t use silicon.

Oil billionaire T. Boone Pickens recently dropped a campaign to push for the adoption of wind power on a large scale because he’s in the process of building the word’s largest wind farm in the Taxes panhandle. When the oil barons start going Green, you’d better take notice. Today I’m going to evaluate some stocks that might benefit from this endeavor.