The consensus among investors is beginning to come around to my view that this situation is similar to 1982, not 1932. 1982 was a severe recession induced to cure the economy of systematic inflation and it was a double dip recession that began in late 1979. I don't mean to diminish the destruction that has taken place in the financial system from excessive leverage, speculation and a real estate bubble. What is different is the Federal Reserve’s and the Federal Government’s response to it. In the 30s it was believed that the free market would right itself and people just needed to pull themselves up by their own bootstraps. They then went on to raise taxes, increase tariff’s on imported goods, allowed the money supply to contract and

We came very close to this type of situation again through our blind belief in the “free market” and non serious total lack of regulation of financial institutions. Our problem now is the credit market is still frozen and confidence has been shattered. I think over time those wounds will heal, trust will begin again and the economy will begin to stabilize. The reason I'm bullish on stocks when most aren't is because I think that the Dow at 9000 and the S&P 500 are 10% undervalued to the situation we're in. In other words, it has more than priced in the known negatives.

As an investor or trader who suffered through a true crash like in 2008, it is very hard to be optimistic going into 2009. However, if you still have your capital and can look out twelve to sixteen months, America and some of its best American brands are truly on sale right now.

If you choose to invest, it will take a leap of faith, the courage to do what others can’t and the mental strength to ignore the daily volatility. For those who can, stocks are now approaching valuations as low as in 1991 and the 2002 bear market low. There are many negatives and positives to review before making calculated investment decisions about 2009. However, the main risk of the stock market in 2008 was that it had been ignoring bad news and was ready to tumble. I think that has already happened now and while we might not have seen the ultimate low in the market, we’re very near it. That has reversed the reward-to-risk ratio in the investor’s favor to the most positive it has been in years. The opportunities here lie in buying good companies at discounted prices to their private market value. It will likely be one of the best years for individual stock picking, versus owning the major market indexes since 2004.

The casino sector has been hammered in 2008 with the stocks being down 60-85% year to date. Regional casino operator Ameristar (ASCA) offers an opportunity to buy a collection of casino assets, with good relative fundamentals at a bargain price. Ameristar has seven properties in: Kansas City, Mo., St Charles, Mo. near. St Louis, East Chicago, In. near Chicago, Il., Council Bluffs In Iowa and one on the Nevada/ Idaho border. While they are headquartered in Las Vegas, what differentiates them from the Las Vegas based casinos is they have no hotel or casino exposure to the sluggish and highly competitive Las Vegas market.

Ameristar focuses on providing higher quality more personal service where the average gambler is considered a star and the theme is “you are a star”. It does a very good job with direct mail and entertainment to keep customers coming back. Almost all of its properties have meeting and convention space to help fill rooms mid-week. Four of its six properties still charge $100-189 during the week and $149-299 on the weekend, which in this tough environment is a good sign. Regional casinos usually charge $69-99 at the most so they have quality properties. Of course they “comp” rooms and food (give for free) to higher level players in exchange for certain levels of play but as you know, there is nothing “free” in a casino.

Since 2004, railroads as a sector have dramatically outperformed the S&P 500 and other transportation stocks. Also, the sector regularly has 6-12% pullbacks based on the latest worry about economic growth, housing, financial crisis and last week slower exports due to a slowing global economy. There was also speculation that the sector was being targeted by short sellers who were guessing there was hedge fund liquidation going on in the stocks. Based on my experience in the sector, the strong fundamentals and continued pricing power will once again be demonstrated, and the stocks offer a short-term opportunity for appreciation.

When you look at a railroad company, it is an incredible collection of assets. It took 80-120 years to form the large railroads that now dominate America after decades of mergers and consolidation. They own billions in land, rights of way for their tracks, switching yards and capital intensive equipment. In today’s environment, all these assets are producing nice profits and generating good cash flow.