Bargain-Hunters' Faves

Editor's Note: Jon D. Markman writes a weekly column for CNBC on MSN Money that is republished here on TheStreet.com.

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Amid all of investors' fortune-telling and hand-wringing over the direction of interest rates, inflation and stocks, it's easy to forget something important: Companies and individuals that don't borrow much don't get into a lot of trouble when rates rise. And when prices of debt-free companies decline anyway along with the broad market in a widespread selloff, it boosts investors' chances to buy them at a big discount.

That is why the most knowledgeable deep-value investors don't wring their hands during a decline like the one we've seen in the past month. They lift their hands and shout hallelujahs.

"The market is like a party for me now," said Matt Feshbach, chairman of MLF Investments in Florida. Feshbach, who takes very large positions in a handful of beaten-up companies and then helps management nurse them back to health, said he has been delighted to see his top prospects down by 40% or more lately. He was buying heavily last week, and he planned to do so again this week.

Selectively Cheap

Tom Kahn, who helps run $800 million at Kahn Brothers & Co. in New York, said Monday that he's not seeing a huge number of bargains "jumping out of the newspaper," so he believes that the market overall is not particularly cheap. But he does say that several of his favorite long-term holds are much cheaper now than they were at the start of the year, and he says he is glad to finally get a chance to buy them for new clients.

So what are these old hands looking at?

Let's start with Kahn, whose heritage goes all the way back to Benjamin Graham, the father of value investing. His father helped Graham with the research in his seminal book The Intelligent Investor while studying at Columbia University in the 1950s.