More comments and stocks ideas to exploit the panicked selling

Unwinding hedge funds, mutual funds and some silly retail investors with margin accounts have been forced to sell their favourite holdings of late. Those of us who have some cash on the sidelines may well have the opportunity of a lifetime.

Read First Eagle's view on this matter.

I've been concentrating on accumulating shares in companies with an established history of creating shareholder value (i.e. ROE >20% over 5 years), strong balance sheets, dividend yield over 2.5% and compelling valuations. The Grahamian simple valuation measure of focusing on companies that have a price-to-book ratio multiplied by the price-to-earnings ratio of less than or equal to 22 is helpful. I also prefer companies that have hard assets so I can focus on tangible book value that exclude such nebulous items as goodwill.

If you can ignore the macro-economic view for a moment (and I agree that it is hard to), you can choose wide economic moat companies with household names trading at amazing discounts to FMV. Most of them are in the DOW: AXP, MMM, GE, JNJ just to mention a few. DIA (the DOW Diamond ETF) is yielding about 3% now which isn't too shabby.