The

RealMoney

contributors are in the business of trading and investing all day on the basis of ongoing news flow. Below, we offer the top five ideas that

RealMoney

contributors posted today and how they played those ideas.

TheStreet.com

brings you the news all day, and with

RealMoney

's "Columnist Conversation," you can see how the pros are playing it on a real-time basis. Here are the top five ideas from today:

1.

Too Much Debt

By Robert Marcin

1:50 p.m. EST

The problem with the economy is too much debt. Let me write that again: too much debt. We don't solve the problem with more debt. We don't need banks to lend to overleveraged households to solve the problem. We don't need them to lend for auto purchases or vacations or condos.

Consumption is too big a part of the economy. It must shrink. Consumers must repay or have written down trillions in debt. Banks shouldn't lend to most of the consumers. We don't need a stimulus plan to create consumption where none exists.

We should let the deflation occur, invest in long-term infra projects to temper the decession, and reinforce the government safety net.

We cannot fuel a recovery with debt when we need to delever. This is all about managing the downcycle, not trying to borrow and spend our way out of it. Why don't the pols and talking heads get that?

2.

Options Trade Bets on Big Move in Constellation Energy

By Jon "DRJ" Najarian

12:53 p.m. EST

A large options trade today is betting on a dramatic move in

Constellation Energy

(CEG).

A trader today bought 4,600 puts at the February 25 strike and purchased 180,000 shares of CEG stock at $26, according to OptionMonster's proprietary tracking systems. That, my friends, is a "put-ratio backspread" -- a spread that anticipates and demands a major move to make money.

A mere blip up or down will not profit with this strategy. This trade needs a large move, say 15% or more, to pay off.

CEG, which is up some 1.5% to $26.70 in midday trading, has reached a definitive agreement to divest the majority of its London-based international commodities business, including its coal and freight operations and European energy trading units, to an affiliate of

Goldman Sachs

(GS). The company is also pursuing the sale of its Houston-based downstream natural gas trading unit.

That's what we know, but we don't know how much CEG will end up with. What we do know is that Constellation is scheduled to report earnings before the market opens on Feb. 18, and today's trade is apparently betting that we will know what CEG will get on that day.

3.

Continue to Stay Defensive

By Peter Kenny

9:56 a.m. EST

Integrated oils, health care, and medical systems all represent the best opportunities for weathering the continued down turn in the markets. It is as plain as day that the markets will not only retest the January lows but could very well test the November lows in the near term. The market has grown weary of the rhetoric, posturing, and pork out of Washington. It is clear from the early look at the stimulus package that D.C. is more interested in labeling the pork "stimulus" than actually passing a stimulus package. The market is headed lower until we get an honest effort out of Washington, and realistic earnings estimates out of Wall Street. Don't try to be a hero in a deflationary and recessionary environment. Cash remains king, but for the brave of heart, the above-mentioned represent actual earnings and interesting technicals.

David Malpass's mention of the need for distance from Bush's "weak-dollar policy" this morning on

CNBC

will spark a very constructive debate. I suspect this will become a major talking point in the next few weeks.

4.

Applied Materials Pre-Announces

By Bob Faulkner

9:22 a.m. EST

As part of

Applied Materials'

(AMAT) reduced guidance this morning, the company indicated that it is taking a number of charges. Among them, $20 million (a penny a share) is to write down inventory due to the lower demand.

If there has been a dirty little secret among the semiconductor capital equipment companies in recent quarters, it has been the willingness to allow inventories to spiral out of control. While they all claim the need to have plenty of spare parts on hand to service customers, just how much is necessary? In their last quarter, AMAT's days-of-inventory stood at 144 days. Below are a few examples from December quarter results of some others in the group:

  • ASML 198 days
  • ESIO 446 days
  • KLAC 179 days
  • KLIC 156 days
  • LRCX 133 days
  • SMTL 398 days
  • TER 130 days
  • UTEK 167 days

Just how long will we have to wait until the writedowns take place at other companies?

5.

The Essence of Investing in a Bear Market

By Christopher Atayan

7:00 a.m. EST

As I reviewed the disparate portfolio of corporations that I am responsible for, I found one thing in common. All of the businesses were prepared to mount a hard charge into 2009. Management is focused on well-defined targets and has developed strategies and associated tactics they are confident will breed success. Moreover, in each case the businesses are defying unemployment trends and actively looking for new high-quality hires. None of these companies compete in attractive markets. As a matter of fact, several are in declining industries.

I am certain the companies I am involved with are not alone in their posture. Sure, the headlines are all about

General Motors

(GM),

Citigroup

(C) and the rest of the corporate miscreants. However, the majority of the businesses out there are competing hard and not giving up. So while the overall economy has shrunk and faces severe structural problems, opportunities still exist at the individual company level.

At some point the gap between the market perception and the underlying business valuation will be wide enough to provide the appropriate risk/return framework for the prudent investor. Of course that is much easier said than done. I have felt for some time, primarily because of stagflation, we are very much in the 1966-1982 market environment. Although the overall equity market went nowhere in that period, the nimble traders were able to make money as the

Dow

fluctuated between 800 and 1000. Yet at the same time, many of the great individual long-term investments by the likes of Warren Buffett, Dr. Henry Singleton and others were also initiated during that time frame. Prudently navigating this dichotomy with your capital intact is the essence of investing in a bear market.

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This article was written by a staff member of RealMoney.com.