We can all picture it. Having sprinted a little too far, we stand doubled over and trying to catch our breath, hoping that we can make it just a bit further. I think there are a lot of financial stocks feeling exactly this way right now.

Yesterday, my fellow Fool Morgan Housel noted that the bounce we've seen since the market's bottom has been one of the largest in history. Throughout this rebound, financial stocks have been at the forefront, helping lead the charge. Since March 9, the S&P 500 index is up around 48%, while the Financial Select Sector SPDR has skyrocketed nearly 130%.

A few days hardly make a trend, but some of the most frenzied stocks in the market have started to show some signs of wobbly legs after their long runs. Fannie Mae (NYSE:FNM), Freddie Mac, and AIG (NYSE:AIG) all showed double-digit percentage declines yesterday, providing a definite hiccup in the marathon that left all three up 300% or more from their respective March 9 prices.

Bank of America (NYSE:BAC) and Citigroup, two other financials that have received heaps of government aid, were also notably weak yesterday after delivering some extremely impressive gains of their own.

Bridge over troubled water
Let’s step up onto Simon and Garfunkel's metaphorical bridge, where we can get some more perspective on the situation with financial stocks.

As I pointed out on Monday, I'm loath to bet against any institution that has the backing of someone who can print money at will (I'm looking at you, Uncle Sam). Right or wrong, this backstop is a virtual guarantee that the U.S. government will make darn sure that none of these companies is Lehmanized.

That said, do we really want to swim in these troubled waters? The froth makes me worried about getting pulled down by an undertow, while the lack of opacity makes me wonder what's swimming below the surface. While I feel pretty confident about the survival of these giants, we now have to consider how they're being valued and whether it actually makes sense.

Goldman Sachs (NYSE:GS) is probably my favorite of the sector, and it’s even more tempting because it's received a vote of confidence from Warren Buffett and Berkshire Hathaway (NYSE:BRK-A). However, Buffett invested in preferred shares with a 10% yield and got his common stock warrants at a significantly lower price -- both giving him plenty of cushion against the unknown.

The sounds of silence
Sticking with Simon and Garfunkel here, maybe it's time to step back from those troubled waters and see what's lurking in the quieter corners of the market. Remember, no matter how crazed the coverage of certain stocks or sectors, you never have to buy anything -- unless perhaps you're a mutual fund manager who likes to run with the herd.

Warren Buffett survived the tech bubble by gritting his teeth through Berkshire's underperformance and a torrent of bad press and sticking to simple principles -- only investing within his circle of competence (that is, businesses he understands), always looking for a margin of safety in his purchase price, and being ever mindful that the vagaries of Mr. Market don’t always make sense.

Today, we're in a much different situation than Buffett faced earlier in the decade. Though the market is well above where it was earlier this year, we're closer to "cheap" than we are to "massively overpriced," as was the case in 2000. Still, for long-term investors, the strategy remains the same -- stick to companies you can understand, look for a price below what you think the company is actually worth, and don't assume that everything the market does is based on reason.

For me, this has meant owning shares of McDonald's (NYSE:MCD), a brand, company, and taste known around the world that currently yields more than a 10-year Treasury, and Johnson & Johnson (NYSE:JNJ), a health-care giant that sells a roster of stable and easy-to-understand products.

But what does this mean to you? Scroll down to the comments section and let us know where you've found the best opportunities in this market.

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