Hey there, Fools. I've summoned our Motley Fool CAPS community once again to highlight a few of Monday's biggest winners among the stocks with a top rating of four or five stars.

Without further ado:


Yesterday's % Gain

American Capital (NASDAQ:ACAS)


Leucadia National (NYSE:LUK)


Aflac (NYSE:AFL)


E*Trade Financial (NASDAQ:ETFC)


Alcoa (NYSE:AA)


There's a reason why I selected those notable gainers, as opposed to other winners making noise on Monday, like low-ranked financials JPMorgan Chase (NYSE:JPM) and Morgan Stanley. Stocks go up all the time, but unless you were able to predict the pop, what does it matter?  

Our community of more than 130,000 CAPS Fools considers its "high-star" stocks the most likely to outperform the market.

Written in the (five) stars?
For example, 93.3% of the 371 All-Star members who've rated American Capital have a bullish opinion of the stock. Just last week, one of those Fools, stockmajor, explained why the business development company (BDC) looked like a favorable bet:

[A]s was stated in the recent earnings call, under a Chapter 11 reorganization it is quite possible that most, if not all, of shareholder value could be preserved as long as [American Capital] can demonstrate that they can pay their bills and run their business profitably going forward post bankruptcy. I believe that they would be able to prove this to the judge, especially with the easing of the Mark to Market rules.

Naturally, after yesterday's 37% pop, American Capital is beating the market handily since that pitch.

The bullish lesson?
Learn to invest for the worst case. It's virtually impossible to call a stock's "bottom," but if you're confident that the risks are already baked into the price, there's a good chance your investment will turn out well over time. As Warren Buffett once said, "Great investment opportunities come around when excellent companies are surrounded by unusual circumstances that cause the stock to be misappraised."

And now for the losers ...
Of course, winning isn't everything in the stock market. Here are five of Monday's biggest decliners with a one- or two-star rating:  


Yesterday's % Loss

H&R Block (NYSE:HRB)


International Bancshares


Telefonica of Argentina




Java Microsystems


While yesterday's drop in highly rated IT provider Harris may have caught our community off-guard, low-ranked stocks are fully expected to fall hard.

Did CAPS call the fall?
In December, for instance, CAPS All-Star bigpeach warned of a taxing future for H&R Block:

This was a relevant business in the 90s. No longer. Hard to understand the viability of a company that only does business for 1/4 of the year. Especially now that programs like TurboTax can do the same thing for a lower fee while you're sitting on the couch drinking a beer.

Consistent with that call, shares of H&R Block sank yesterday after reporting a 3.2% decline on total returns prepared through March 15, thanks to the growing shift "from assisted to do-it-yourself tax preparation methods."

The bearish takeaway?
Always make sure the megatrends are your friends. For market-beating returns, it's crucial that you position your portfolio to take advantage of massive shifts in commerce, rather than struggle against where the world is headed. As bigpeach understands, buying into "buggy whips" disguised as bargains is one of the easiest ways to crash in the market.

The final Foolish move
Investors often focus strictly on stock price movements without realizing that developing a proper stock-picking process counts most.

Over at Motley Fool CAPS, thousands of investors are Foolishly sharing insightful investment tips to help, above all else, identify tomorrow's big movers. Over time, consistently reverse-engineering winning -- and losing -- stocks will help you become a more Foolish investor.

Log in to CAPS today and start participating. It's absolutely free -- and a lot of fun!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Leucadia and Aflac are Stock Advisor recommendations. The Fool's disclosure policy is always the big winner.