By Porter Stansberry in the S&A Digest:

The theme of my newsletters this month is obsolescence. You see, I'm convinced when the Fed stops buying long-dated credit securities (Treasuries and mortgages) in March, interest rates are going to rise, causing stocks to fall. I don't think 2010 is going to be a great year for stocks. And if stocks aren't going to go up, then it's probably a good idea to position our portfolio to make money as stocks fall.

There are three categories of stocks you should always short. First – frauds. It's a no-brainer. The problem is, frauds don't happen all that often, and they're often very hard to discover. Second – overly indebted firms. I've already explained why I expect GE to go bankrupt. It simply owes far too much money to ever be solvent again. That's why I shorted GM, too. These stories are pretty easy to find... and they all go to zero, so they're great bets.

Third – obsolescence. I don't care if you're the best buggy-whip maker in the world, once Henry Ford started selling cars people could afford, your fate was sealed. This last category is difficult to execute well because lots of these buggy-whip stocks have good balance sheets and talented managers. So sometimes the stock takes longer to roll over than you expect. But... they can be spectacular long-term trades and give you plenty of protection against bear markets. I first shorted Kodak in 1998, when I bought my first digital camera, and rode it down for years.

I've found three companies whose products are completely useless and whose businesses are facing a permanent reduction in intrinsic value – all the way to zero. We'll use these stocks to hedge our exposure to the market this year by short-selling them. The details will be in my next newsletter, which will be out next week – I promise.

I know some readers will be disappointed, because they simply won't short a stock, no matter what. That's a big mistake. If you're an investor in U.S. stocks, you'd better get comfortable with shorting. You're missing half the opportunities if you don't. Refusing to sell stocks short is like trying to play a round of golf without a putter. You might make a good score... but you're making it a lot harder than it ought to be.

Crux Note: The S&A Digest comes free with a subscription to Porter Stansberry's Investment Advisory. Porter will be unveiling this 3 favorite stocks to short in his latest issue out later this week. To learn more, click here.

More from Porter Stansberry:

What you must know about bankruptcy of the United States

Porter Stansberry: This huge U.S. blue chip virtually guaranteed to go bankrupt

Porter Stansberry: The high-return/low-risk vehicle investors should place most of their money in