Your house for sale. It seems that everything is for sale these days, yet no one is buying. It has been said that the stock market is the only place where, when something is for sale, no one wants to buy. Yet, that statement is pervasive all through the world economy, and especially the US economy. What to do?

There is very smart money being pooled to take advantage of this conundrum. In a recent article in the Wall Street Journal, a big institution is buying bulk units of condos in the glutted condo market in Miami. Vulture funds are offering $0.25/dollar to buy huge pools of mortgage-backed securities from the few remaining banks. Some may say “they are crazy,” but if the true values of those mortgages are really valued at $0.25/dollar, then our economy is ruined! Think about it: the housing problems are fairly isolated to a few geographical locations. One only needs to reference the Case-Schiller Index to see that the overall damage from these few markets skew the entire Index downward. Granted, housing is soft in many markets, but nowhere near the crushing levels of southern California, Arizona, Nevada, and south Florida. The point is that because of panic and the opaque nature of the slicing/dicing of those mortgage securities, it is easier to mark down everything rather than sort it out tranche by tranche. Another article in the WSJ exemplified this by calling ALT-A loans similar to sub-prime!

If you are looking for out-sized gains, NOW is the time to cherry pick the truly spectacular bargains that are out there. If you are looking to buy a home, check the local bank’s short-sale list. Foreclosures are great bargains, but unless you are a handy person, the condition of these can be overwhelming. If you are looking for an investor property for cash-flow and long-term appreciation, condos are a steal. Look for ones that are being auctioned off in bulk, if institutions are bidding, why shouldn’t you?

The stock market is trickier. If you have been an Index investor, you are in for a very choppy ride for quite some time. Better yet, do you homework and look for extreme value. We spotlighted SevenArts (SAPXF) recently at $0.25. This entertainment company produces mostly schlocky movies, not block-busters, but they all MAKE MONEY. Isn’t that important?? The stock is currently up 100% in this market and we feel it could rise another 200% this year. They have extreme value, and shrewd stock pickers realized it and profited.

Another case of extreme value is EnDevCo, Inc (EDVC). This is an Oil & Gas producer that is sitting on over $1 Billion in oil and gas on their Oklahoma property, Short-Junction Field!! That’s right - over $1 Billion. Management bought the field a few years ago for $11.5 million; that works out to $0.42 cents per SEC proven reserves. This is so undervalued it makes your teeth hurt!! The company is already producing and is cash-flow positive, but because it trades on the OTCBB, it is severely discounted by the big Wall Street brokers. If you take their SEC reserves and use an oil price of $80, multiply the two figures and then divide by the number of outstanding shares and guess what? You get over $40 a share in SEC proven value. That is value!

Are these stocks risky? Very much so. We picked a few bombs this year as well. Digital Post Interactive (DGLP) was profiled at .80 and is now at .04. Ouch! They have taken longer to execute on their business plan, and the market had zero patience for them. Are they done? Not so fast. The announcement they made about their partnership with Kiddie Kandids, one of the top 5 national portrait studios with over 180 locations throughout the country, is just getting started. They should have had that done 2 months ago, but are now finally rolling out the service. The potential cash-flow from this deal should be a game changer. At these prices, once the business starts rolling in, start to pay attention. The market certainly will.

Making money from investments is never easy, nor should it, but when asset classes get this cheap every investor should be strategizing on where their best fit opportunities lie. Look back at every other financial calamity and you will notice that they all have one thing in common: those smart or brave enough to take advantage made outsize gains in a short time. Now is one of those times.