You know that political bumper sticker that goes, "If you're not outraged, you're not paying attention"? It might as well apply to the market these days. 2008 was a terrible, awful, and downright painful year to be an investor.

Good -- even great -- companies are being sold down to levels far below their true worth, and investors are losing their savings. It's outrageous!

A shocking and somewhat interesting statistic
A whopping 88% of all stocks traded on the major U.S. exchanges were down in 2008. That's 5,369 names in the red. Of those, 4,407 dropped 25% or more -- a list that includes seemingly "defensive" stocks such as Coca-Cola (NYSE:KO), Unilever (NYSE:UL), 3M (NYSE:MMM), and Schering-Plough (NYSE:SGP).

So, if you've lost money of late, don't feel bad. There's been no hiding from this downturn.

But let's also be honest: It hurts.

Time to panic-sell
It's outrageous, and it hurts, but what's the individual investor to do? The market is a monolith at times, and it can be hard to sway.

Case in point: Barrett Business Services. I found this tiny West Coast professional-employer organization and staffing company during my work as the micro-cap analyst for our Motley Fool Hidden Gems service. At the time, it was trading for a little more than $20 per share. I liked the CEO, I liked the balance sheet, I liked the track record, and I thought it looked cheap. So I told people to buy it.

What happened next was frustrating: It dropped to $17, then to $14, and finally all the way down to $10 and change.

What's your next move?
See, the market has it in its head that the economy is worsening and the consumer is weakening. When fears are that broad, everybody gets punished.

Pain isn't reserved for companies like Ford (NYSE:F) and now-bankrupt GM, which are posting losses, losing customers, and suffering under crippling debt loads. Yet it's not entirely irrational. Though a company like Wynn Resorts (NASDAQ:WYNN) continues to move ahead with big projects in Macau and Las Vegas, the company's customer outlook is more uncertain than it was a few years ago. Until that clears up, these companies will be worth less in the eyes of the stock market.

But back to Barrett: It still has a strong balance sheet, it has increased its share repurchase program, and it's paying shareholders a nice 3.1% dividend. Could the stock drop further from here? Of course, but it will be among the first to rebound if the economy improves. And no matter what, it's still outrageously cheap.

And I'm not alone. CEO Bill Sherertz told analysts on a recent conference call: "If you guys want to sell [the company] down to five times earnings, maybe I will just buy the whole [expletive] thing."

Enough [expletive] said
After backing out cash on the balance sheet, Barrett today sells for just 8.7 times trailing earnings (after adjusting for a one-time investment loss). But that's not necessarily the point. It's suffering along with a few thousand more stocks on the market, even though it's had two consecutive quarters of solid results.

Investors, then, have two ways to express their outrage:

  1. Withdraw money from the market, and wait for current market conditions to subside.
  2. Put more money in the market, and take advantage of current prices to build a portfolio of excellent companies on the cheap.

We're all about the latter strategy at Hidden Gems, and we're excited. There are so many more buying opportunities today than there were last summer, when our returns were flying high. Fortunately, investing isn't about short-term returns; it's about making a fortune over the next decade or more.

Market conditions like those we have now can be painful, but they can also help you amass a fortune. So swallow hard and start buying. And if you're looking for a few great ideas, you can read all of our research and recommendations at Hidden Gems, including our top picks for new money now, by joining free for 30 days. Click here for more information.

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This article was first published on Jan. 10, 2008. It has been updated.

Tim Hanson owns shares of Barrett Business Services, 3M, and Wynn Resorts. Coca-Cola and 3M are Motley Fool Inside Value recommendations. Coca-Cola and Unilever are Income Investor picks. The Fool's disclosure policy is awesome.