If you're paying attention to the stock market these days, you're seeing some major stock-price volatility. But it shouldn't worry you. A true investor should welcome volatility, since it can create opportunities to purchase securities at significant discounts to their intrinsic value. Patience is the key.

Even while some dirty laundry remains to be washed in the mortgage industry, recent high levels of market volatility in various other sectors have caused some attractive buying opportunities. If a company so much as sneezes "asset writedown," there's blood in the streets. One need look no further than the recent one-day 59% freefall by E*Trade (NASDAQ:ETFC) to understand my point. Mr. Market is very emotional right now, and his mood swings present us with opportunities. Veteran value investors are taking notice.

A rare opportunity
One of my favorite investors, Mason Hawkins, founder of Longleaf Mutual Funds, is a longtime Ben Graham-style value investor. For nearly two decades, Hawkins and his team have delivered the goods to anyone fortunate enough to be a partner in his funds. The group's Partners Fund has been closed to new investors for some years, with Hawkins believing that the availability of capital exceeded the availability of bargain investments.

But now, that stance is changing. The firm recently issued a letter to its partners concerning the state of affairs in the market:

... we have found several new qualifying purchases. Because the Fund is fully invested, we face the predicament of either having to sell businesses below appraisal even though their appraisals are growing, or forgoing compelling new opportunities that can be the foundation for the next decade of performance.

We therefore are trying a third approach -- raising capital from investors for new purchases without selling names, with tremendous potential upside. Today's opportunity set could digest approximately $2 billion. [Emphasis added.]

Over the years, the folks at Longleaf have been extremely prodigious with their capital. It takes a market event of unique characteristics -- like the credit market's squeeze today -- for them to make such a statement. The opportunities appear to be so compelling that the fund will accept new partners -- something that has not happened in many years.

This is the classic "be greedy when others are fearful" investing philosophy at work. Time will tell what the significant opportunities are, but already, we see in Longleaf Funds' recent quarterly filing a new holding in Office Depot (NYSE:ODP), Sun Microsystems (NASDAQ:JAVA), and Dillard's (NYSE:DDS). The firm also increased its holdings in Worthington Industries (NYSE:WOR) and eBay (NASDAQ:EBAY). For value investors, such buying activity occurs usually during times of high pessimism, and this is no exception. Given the firm's excellent long-term track record, you would be wise to pay attention to what it's buying.

You're buying a business, not a stock
As long as you understand that you will hardly ever buy at the bottom, you have some fantastic opportunities that will do extremely well over the next couple of years. Your investments might not do well next month or next quarter, but if you remember that it's the performance of the business that matters in the long run and the performance of the stock price in the short run, you will do fine.

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Fool contributor Sham Gad is the managing partner of the Gad Partners Fund, a value-focused concentrated investment partnership modeled after the original 1950s Buffett Partnerships. He can be reached at sham@gadcapital.com or at http://www.gadcapital.com/. He's usually busy buying what you're selling and selling what you're buying. The Fool has a disclosure policy.