Dykstra: JPMorgan Too Cheap to Pass Up

The stock market will try to regain some of the ferocious losses from last Friday. There are some great buys right now -- quite frankly, I am stunned by the amount of quality companies that are on sale.

Several hedge funds were hurt by the poor performance of value-oriented strategies beginning in late June, when concerns regarding a credit crunch escalated. Facing deteriorating investment results, rising costs for margin debt and redemption requests from investors, some hedge funds reduced the size of their long and short positions in August.

To accomplish this, funds need to buy "bad" stocks to cover short positions and sell "good" stocks. This liquidation can feed on itself, especially when giant funds are crowded into the same names. For the individual investor, panic selling or panic buying from huge funds can open opportunities.

These opportunities tend to come at times of high anxiety, however, and Wall Street is littered with the remains of brave souls who were too eager to fight the trend. Still, the volatility in the returns of quant strategies serves as a reminder that any trade can become too crowded. ...