2 Stocks to Sell Because Time Has Passed Them By

NEW YORK (TheStreet) -- It's a stock picker's market. You hear that often when the major indices take a hit.

The categorization makes me laugh because, really, we're always in a stock picker's market. It just a matter of to what degree.

Consider Oct. 6 to Oct. 10, 2008. It was the worst week the market had experienced in 75 years. In hindsight, the obvious choice was to buy into the carnage. But even though "everything" ended up moving higher, you still had to pick the right stocks.

For instance, the SPDR S&P 500 ETF ( SPY) closed at $88.50 on Oct. 10, 2008. As of Thursday's close, it trades for $132.44. That's about a 50% gain. The PowerShares QQQ ETF ( QQQ) ended Oct. 10, 2008 at $31.32. It closed Thursday's session at $62.69. That's more than 100% worth of appreciation. Not too shabby, particularly when you consider that we're down quite a bit from recent broad market highs.

If, however, you picked the wrong stocks from those indices, you could have lost money. Few people would have called you crazy on Oct. 10, 2008, if you viewed Cisco Systems ( CSCO) at $17.23 and Hewlett Packard ( HPQ)at $37.00 as bargains. Fast forward to Thursday's close and CSCO fetches $16.92 and HPQ costs just $20.30 per share.

Looking back, it's pretty obvious what you missed if you went long one of these stocks. You missed the F5 Networks ( FFIV) and Apple ( AAPL) explosions. You missed trends that look pretty clear with the benefit of a four-year-long rearview mirror.

Going forward, particularly in a topsy-turvy market, it's crucial to spot trends before they fully emerge. That requires a more qualitative approach to investing.

How many people do you think bought CSCO and HPQ in late 2008 on the basis of their P/E ratios? Without a firm grasp of a company's story and strategic-competitive future, value investing can get you killed.

So, for example, going forward, I would most likely take profits in a stock I have been high on for more than a year -- Tesla Motors ( TSLA).

As much as I appreciate Tesla's unique and innovative approach to selling cars, I would take the 17% the stock returned over the last year and call it a day.

Tesla will own affluent types in high-tone urban and suburban enclaves, but they're not selling items that even the well-off are willing to replace every six months to a year like Apple is. While their Apple-like approach to retail makes for a great story, I think we've seen the climax.

Sure you might miss some upside pop here and there when the Model S gets delivered or when Tesla shows off its crossover Model X, but as a long-term investment, I'm no longer a fan.

Here's a trend I intend to follow in place of TSLA before the end of the year -- natural gas as the fuel of choice for transportation and other crucial activities going forward. I plan to use the United States Natural Gas ETF ( UNG) to play it.

Consider what contributor Robert Weinstein had to say about UNG in the following articles on TheStreet: Here's Why Oil is So Expensive (May 8, 2012) and Natural Gas Will Dictate Oil Prices, Not Iranian Sanctions or OPEC (June 12, 2012).

In a nutshell, Weinstein tells us that $100 a barrel oil is nothing but a dream and natural gas will eventually power transportation in many parts of the world, including the United States. He already looks like a prophet on the oil call and I have confidence in his views on natural gas. I'll likely take his lead and use options to play UNG due to the high carrying cost of going long that type of ETF. In fact, I will likely use this year's IRA contribution to sell puts in an effort to get long before 2012 expires.

In addition to TSLA, I would take any profits you may have squeaked out of Sirius XM ( SIRI) over the last year and run away like you just robbed a bank. If you bought and held over the last year, you're actually down about 6%, however, volatility in the world's least favorite cult stock made it a play you could have timed for occasional profits.

I have beat the drum feverishly over the last year on what a horrific long-term investment Sirius XM is -- see, for example, Will Sirius XM Go Extinct?. Nothing has changed. And it's not getting better.

You can find a whole slew of media stocks to buy over SIRI. Look for ones that look more like innovative tech/new media/Internet/social plays than stuck-in-the-mud slow growth, stodgy stocks that would rather consider paying a dividend over reinvesting in the business. Pandora ( P) tops my list, but I would take anything from Netflix ( NFLX) to Dish Network ( DISH) over SIRI at this stage of the audio/video entertainment story.

Whatever you do, don't stare at P/E ratios or read message boards to find your way through a "stock picker's market." Picture the future and act accordingly discarding trends that have passed and getting ahead of the ones yet to fully develop.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

At the time of publication, the author was long P.

More from Opinion

Elon Musk's Latest Twitter Tirade Is the Dumbest Thing on Wall Street

Elon Musk's Latest Twitter Tirade Is the Dumbest Thing on Wall Street

Elon Musk's Twitter Tirade Is the Dumbest Thing on Wall Street

Elon Musk's Twitter Tirade Is the Dumbest Thing on Wall Street

Why Google's Search Momentum Won't Be Badly Hurt by New EU Rules

Why Google's Search Momentum Won't Be Badly Hurt by New EU Rules

Flashback Friday: Amazon, Chip Stocks, Memorial Day

Flashback Friday: Amazon, Chip Stocks, Memorial Day

Time to Talk Tesla: What Happened This Week, Elon?

Time to Talk Tesla: What Happened This Week, Elon?