Over the past 60 years, the United States has seen, and survived, 10 recessions (not counting the one we could be in at present). From the shortest one -- six months in 1980 -- to the two that spanned 1973-1975 and 1981-1982, we've muddled through and come out the other side. In between each, we've experienced, on average, almost five years of expansion.

So while we could be in another recession right now, I'm excited!

Pardon me while I wipe my chin
First, we have a whole bunch of people running around in panic mode crying, "The sky is falling!" They don't want to hold stocks during a recession, so they're willing to sell them -- cheap.

Second, the news media fans the flames of panic with constant stories about weakening consumer spending and the specter of recession.

Third, we've got a handful of really hated companies. Specifically, I'm talking about the banks, thrifts, and builders that caused and are feeling the fallout from the mess we're in.

What does that add up to? Bargains.

Like a kid in a candy store ... and the candy's on sale
One option is to search among the beaten-down banks. In that space, Allied Irish Banks (NYSE:AIB) is an intriguing company. Because it has pretty much stayed out of subprime lending, you'd think it wouldn't be feeling the effects of the U.S. housing market meltdown. But it has. Add the potential of similar troubles in its own backyard and it's down some 40% this year. Tasty!

There's also the investment bankers and brokerages. While Lehman Brothers (NYSE:LEH) is struggling, others, like Morgan Stanley (NYSE:MS) have gotten more interesting. Heck, if it gets cheap enough, I'll even take a closer look. (Even possibly bad companies can be good investments if you get them at the right price.)

Then there are (still) the retailers, trying to survive declining same-store sales and decreased consumer spending. This is where a strong balance sheet is helpful. Gap (NYSE:GPS), for instance, has $1.8 billion in cash and short-term investments and only $188 million in short-term debt, with no long-term debt. As long as cash flow keeps coming -- and it has so far -- the company should survive to become great again.

Even some big name companies have been dragged down. Merck (NYSE:MRK), maker of a lot of the drugs we take, is one such example. The stock has been falling for most of this year.

Finally, consumer goods and tech have gotten interesting of late. Stalwarts like Procter & Gamble (NYSE:PG) and Intel (NASDAQ:INTC) are off significantly from their highs of late last year. All that talk about lower consumer and company spending in 2008 may have driven their prices down. But really, who cares about 2008? For my money, I'm more interested in companies I can buy today to own in 2013 -- so thanks for the bargains!

"When Miller and Nygren speak, people listen."
Investing in the above industries might seem counterintuitive now, but Bill Miller of Legg Mason says au contraire.

[Several] years ago, everyone wanted tech and Internet and telecom stocks. ... The time to buy them was in 1994 or 1995, when they were cheap. But in 1994 or 1995, people wanted banks and small and mid caps, which should have been bought in 1990, and, well, you get the picture.

Bill Nygren, another great value investor, agrees. Looking at the current economic situation, he wrote, "What usually happens is that suffering industries begin to recover, the next crisis comes from somewhere least expected, and the cycle of creating new investment opportunities starts anew. We have no reason to believe it will be different this time."

These gentlemen know that investing today in areas that aren't well-liked will position your portfolio for the eventual end of this bear market. There will be another bull market. What we have now is the chance to grab some good companies while they're cheap.

So what will you do? Stop investing in stocks altogether, worried that things will be different this time? Or listen to master investors (not me -- Miller and Nygren!) and look at some opportunities?

I know what I'm doing.

Finding value
If you'd like some help in figuring out whether a beaten-down company is worth investing in, take a look at our Inside Value service. Philip Durell and his team look in downtrodden areas of the market, just as Miller and Nygren advise.

Since the newsletter's inception, their picks are beating the market; plus, you can see the stocks they're recommending today for free with a 30-day trial.

This article was first published on Feb. 12, 2008. It has been updated.

Jim Mueller owns shares of Intel and Allied Irish Banks. The Motley Fool owns shares of Legg Mason and Allied Irish Banks. Gap is a Stock Advisor and Inside Value recommendation. Intel and Legg Mason are choices at Inside Value. Allied Irish Banks is a Global Gains recommendation. The Fool has a disclosure policy that believes, deep down, that the market will turn around.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.