And I’m not just talking stock investors, either: Just about every asset class out there — from real estate to commodities to fixed income securities — are getting taken out back.

But mark my words: This is not going to last forever. It never does and it never will. The fact is I’ve been through a ton of crises and know how to handle them, no ifs, ands, or buts about it.

Does that mean I can tell you with absolute certainty what investments are headed higher? Nope: No one can. But I can tell you that — right now — the stock markets are ready to deliver simply mind-blowing bargains.

As you can see from the top part of this chart of the S&P 500 — a good proxy for the broader U.S. stock market — stock prices have taken a beating. While that’s painful for all of us, it’s far from news.

But take a look at the bottom part of the chart: The price-to-earnings (P/E) ratio for the S&P 500 is at historically low levels. In fact, it’s around 10 for the entire stock market. And that is news.

Remember, the P/E ratio takes a stock’s — or in our case, a market’s — price and divides it by the amount of earnings it makes. So, a P/E of 10 means that for every dollar in stock value, that company earned 10 cents.

Is that significant? You bet. With the stock market making 10 cents in profit for every dollar investment, it’s booking returns of 10% for stock investors. Those are stellar numbers, for sure, and blow away just about every other asset class out there.

But that’s not all. The chart also shows that when the market was at similar levels as today — which was way back in 2002 — the P/E ratios were much, much higher. In fact, the market’s P/E ratio of 45 in mid-2002 is nearly five times its current rate.

Meaningful? Yep. It shows that earnings are in much better shape than they are today. After all, when prices stay the same and P/E ratios decrease, earnings are on the rise.

But even more importantly, today’s relatively low market P/E means that it’s jam-packed with bargains – in fact, many more than in 2002. That means there are tons for stocks for sale at rock-bottom prices. And that’s a huge plus for a new bull market.

My Readers’ Portfolios are Going Gangbusters!

Let’s get down to brass tacks: While stock investors have had a tough time of it over the past few months, my portfolio has been delivering outstanding returns. Take a look for yourself…

As you can see from this chart, since April stock investors have booked a mind-blowing 29% in losses. This is based on a whopping 401-point loss from April to October on the S&P 500, a good proxy for overall stock market profitability.

Meanwhile, my Easy Money Options subscribers have amassed a solid 16% profit, on average, over the same time period. That means they’ve outperformed the average stock investor by a staggering 45%!

And don’t forget: They’ve collected these profits during one of the biggest financial messes of all time. To join my readers at Easy Money Options and find out how you can collect significant gains, even in this market, check out this free report. Even if you never tried options investing, I’ll show you how easy and profitable it can be.

Best Regards,
Wayne Burritt
December 3, 2008

Cheap Stocks and Mind-Blowing Bargains was originally featured in the Penny Sleuth.