The Cutting Room: The Four-Year-Old and the Fund Manager

The two part company on Mattel, and the TV show guest admits his pick was wrong.
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Seems I can't escape her.

Barbie

, that is. After watching the much-anticipated Barbie party scene in

Toy Story 2

, my four-year-old daughter (who still insists on wearing her Barbie cheerleader Halloween costume) and I spent the day in

FAO Schwarz

searching for the "perfect" Sleeping Beauty Barbie. Beauty will have plenty of friends, like Soccer Barbie and Holiday Barbie among others. I read somewhere that on average most girls this age own nine.

Even at work, she makes an appearance. Barbie's parent,

Mattel

(MAT) - Get Report

, was on the list of our guest stock picker a few months ago. Since then, that toy stock continues to have a rough time. And

Robert Olstein

, veteran money manager who says he has beaten the

S&P

nine out of the past 10 years, told us this week on the show that he finally abandoned Barbie. He wants no part of

Jill Barad

, the embattled CEO of Mattel.

TSC on FOX: Join the discussion on

TSC

Message Boards.

He sold a stock he once thought was a winner. And that's saying something, coming from an investor who specializes in the "down and out." In

TSC

scoreboard, where we review the picks of our guests, Olstein admitted openly that he had made a mistake.

There were a lot of memorable moments in this weekend's show, but to me, this was the most instructive. You usually only hear stock pickers tout their latest buy. But buying is a lot easier than selling, and investors are rarely offered a glimpse into what a pro does when his or her picks don't work out.

Olstein allowed that not even Barbie and her legions of four-year-old followers could save Mattel as long as the company's current management was in place.

Olstein, whose

Olstein Financial Alert Fund

is whipping the benchmarks this year, proves he isn't afraid of going bargain hunting at the bottom of the bin, though. His picks this week:

General Motors

(GM) - Get Report

and

American Greetings

(AM) - Get Report

.

Cheap because they should be? asked

TSC

senior writer

Dan Colarusso

, who always poses the question everyone wants to hear. But Olstein is a big believer in the world's biggest auto manufacturer, convinced that its strong balance sheet will easily carry it through tough times ahead for the industry.

Other highlights of the show:

  • Chartman makes a rare in-studio appearance. Gary B. Smith -- in town with his family for the Macy's Thanksgiving parade -- brought along a killer prediction on where the Nasdaq is headed in the next few months.
  • Tax guru Tracy Byrnes, in her debut appearance, offered a little-known trick for making sure Uncle Sam doesn't take such a big bite out of your returns this year. You've only got a few days left to take advantage of the strategy, known as doubling up, in which you buy more shares of a short-term loser you still believe in, then sell the same amount at the end of the year for tax purposes. Keep your exposure, but get the tax break.
  • Senior Funds Writer Dagen McDowell and I duked it out with Olstein on the issue of whether a very popular investing strategy -- indexing -- is just a sham. I still haven't heard an argument, though, that convinces me that the low costs of matching the market are a bad deal.
  • Not to mention show regular Herb Greenberg (known among the staff as Doubting Thomas) who offers his signature perspective on the market.

As for me? Only a week til Chanukah ... so I'm off to see if I can single-handedly boost Mattel's stock price.

Brenda Buttner's regular column, Under the Hood, appears Thursdays. At time of publication, Buttner held no positions in any securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks or funds. While she cannot provide investment advice or recommendations, Buttner appreciates your feedback at

TSCBrenda@aol.com.