Take a trip to any mall these days, and you'll see gigantic signs advertising sales and deep discounts. In fact, some of the discounts are so generous that you could conceivably walk out with twice as many clothes for the same amount of money you spent last year. In other words, you're getting more bang for your buck.

The same phenomenon has been a pleasant side effect of this most unpleasant market -- you can buy more shares than you could before. (Unfortunately, there are no advertisements guiding you to the big stock sales.)

In his new shareholder letter, Bill Miller recalls a recent conversation with Warren Buffett, in which the Oracle of Omaha "then made the perfectly sensible point that as we are all net savers, we should be happy if stock prices declined a lot more, so we could buy even better bargains."

Be a net saver
If your existing holdings are deep in the red, you can take solace that you're not alone. Many respected professional money managers are down over the past year or more -- Miller, Bill Nygren, Ron Muhlenkamp, et al. But these men know that it's not time to pack it in. It's time, in Miller's words, to look for the "even better bargains."

That sounds good in theory, but the application is trickier. For instance, if you suddenly fell into $5,000 today, what stock would you buy?

I'm guessing most investors wouldn't know how to answer that. That's why it's critically important that you always keep (and constantly maintain) a watch list of potential investments.

After all, finding great businesses is hard enough. Finding a great business simultaneously with a good price is downright improbable. So do the research up front to find the businesses you'd want to own, and keep a list of buy-around prices so that you're locked, loaded, and ready to go when the right price presents itself.

All we need is just a little patience
Those opportunities may take a long time to come about. For example, back in October 200,7 our Motley Fool Million Dollar Portfolio team had its eye on electronics superstore Best Buy (NYSE:BBY), which was then trading at around $47 a share. Despite Best Buy's "stellar balance sheet" and "leg up on the competition," the team didn't want to pay that much for the stock. Our crew liked Best Buy's long-term market outperformance capability at $47 but decided to wait for a better price before making a purchase.

Fast-forward seven months, and the team purchased Best Buy at around $44, about 6% cheaper than it was back in October. Might that 6% savings make a huge difference? You betcha.



If Best Buy Goes to $60 ...

If Best Buy Goes to $40 ...

Purchase at $47

27.7% gain

14.9% loss

Purchase at $44

36.4% gain

9.1% loss

As you can see, buying at the lower price not only magnifies any upside, but it also reduces downside exposure. Value investors will be quick to note that this is a classic example of buying a stock with a wider margin of safety.

Of course, given the overall down market we've seen since, Best Buy's shares have declined a tad further since it was purchased for Million Dollar Portfolio, but the team is still thrilled with the $44 purchase price.

Aim small, miss small
Having a watch list of five to 10 great companies you'd love to own, paired with buy-around prices, will make you a much more prepared investor -- and that preparation will most likely improve your returns. If you haven't yet constructed a list, or if you just need some new ideas, start today. After all, nearly 75% of the S&P 500 constituents are currently in negative territory in 2008, including:


Year-to-Date Return

Boeing (NYSE:BA)


Microsoft (NASDAQ:MSFT)


Motorola (NYSE:MOT)


American International Group (NYSE:AIG)


Valero (NYSE:VLO)


American Express (NYSE:AXP)


*Data provided by Capital IQ, a division of Standard & Poor's, as of Aug. 5, 2008.

Although not all of these stocks are necessarily deep values at this point, they're definitely worth a closer look than they were last year.

Always be prepared
Fortunately, the market goes on sale from time to time, like right now. These moments provide us the chance to buy proven businesses and hold them for the long run. Keeping a watch list and some spare cash allows you to pull the trigger on these rare opportunities when they arise.

If you're looking for some thoroughly vetted stock ideas or a support community to help make you a more prepared investor, consider the new offering from Fool co-founder Tom Gardner, Million Dollar Portfolio. You'll get an all-access pass to follow along as Tom and team invest $1 million of our own money in recommendations from the Fool's premium services. I urge you to learn more about Motley Fool Million Dollar Portfolio today.

Just click here for all the details.

Todd Wenning can leap small objects in a single bound. He owns no shares of any company mentioned. Microsoft, Best Buy, and American Express are Motley Fool Inside Valuerecommendations. Best Buy is also a Motley Fool Stock Advisorselection. The Fool owns shares of Best Buy and American Express, and its disclosure policy is always a strong buy.