IN THIS GAME

, it's frighteningly easy to lose tremendous amounts of money literally overnight. Case in point is Evan Dooley, the

MF Global

The stock of MF Global, which had been relatively strong in a weak market, promptly dropped 40% to an all-time low over the next two days. It's the stuff trading nightmares are made of.

Thankfully, most changes, both in life and in the markets, don't occur that quickly. Adjustments tend to unfold slowly over time, oftentimes so gradually that you don't even realize they've occurred until after the fact.

The best example can be found in the natural changing of the seasons. It's still quite cold here in Chicago in March, but without much difficulty, one can easily observe the days getting longer, the air getting warmer and the snow beginning to melt. Yes, there will be one particular day in which spring will officially "arrive," but ahead of that day there were plenty of clues and fair warning.

Right now, the commodities story and increasingly the weak-dollar story have become front-page news all over the world as those markets have continued to boom. And as millions of investors salivate over the performances by securities such as StreetTracks Gold, PowerShares DB Agriculture and CurrencyShares Euro Trust, it's worth noting that these picks didn't get hot overnight. Gold, oil and weak-dollar plays have been in bull markets for years. Although that may or may not be the case a few months from now, at the moment the trend is very much intact.

You can't say the same thing about utilities, a former favorite. Names like Great Plains, Consolidated Edison, Exelon, Wisconsin Energy, FirstEnergy and Edison International have slowly become among the market's worst names.

The investment game is especially competitive and efficient. To that end, there's an ongoing process of natural selection. Losing investments and investors simply get washed away.

We've seen that over the years with former highfliers like Alberto Vilar or Garrett Van Wagoner, or more recently with rogue traders Jerome Kerviel and the aforementioned Dooley. Indeed, if you've got bad discipline or a reckless approach, you simply won't last long.

But it's also true in investment themes as well, where only the strong tend to survive. Far too often a quest for a "bargain" leads to stocks the market is naturally trying to brush aside.

Case in point is newspaper stocks, among the weakest in a tremendously weak market. Newspapers have been lousy stocks for years, participating in a steady, sectorwide implosion. Yet many investors, especially those with a value bent, have bought the whole way down, ignoring a litany of indicators, most obviously the stocks themselves.

Read 'Em and Weep

Prominent newspaper stocks over the past four years.

Even if you were oblivious to the industry's fundamental decline, the story was showing up in multiyear charts of stocks like New York Times, where bullish investors have lost money repeatedly for the better part of a decade.

Knowing that Albert Einstein defined insanity as "doing the same thing over and over again and expecting different results," one has to question the approach of those traders who repeatedly insist on building an exposure just as the market is working to break it down. When you're fighting and fighting to make an idea work, that's usually a good indication it's time to find a new idea.

I can't control the market, only my exposure to it. And when a particular idea continues to hemorrhage money quarter after quarter, I interpret that as the collective wisdom of the market separating the wheat from the chaff. Because markets, like the seasons, tend to move in persistent trends over time, you should follow the price action, not resist it.

And while I'm cognizant of the fact that, as pointed out last week, yesterday's hot stocks can quickly cool off, the shift tends to unfold over months. So when the time comes to put money to work, you're usually best served by buying the wheat and kicking the chaff aside.

Jonathan Hoenig is managing member at Capitalistpig Hedge Fund LLC.