Volatility: A chance to buy 'the best'

Daniel Frishberg, host of BizRadio 1320 and editor of The MoneyMan newsletter is using the market setback to buy Goldman Sachs (NYSE: GS), Apple (NASDAQ: AAPL), and Fluor (NYSE: FLR).

He explains, "Investor confidence remains the primary issue. We deal in a world of paper. That paper has value only because, at the basis, there is a promise to pay by someone who is trustworthy and has the capability of performing as promised."

Now, he adds, "We are worried that many people with subprime loans may not be able to meet their promise to pay, and that failure ripples through the financial system."

But Frishberg sees this weakness as an opportunity. He suggests, "Volatile markets function to transfer assets from the hands of weak holders into the hands of strong holders. When the transfer is complete, selling pressure will decline because the strong holders are less inclined to sell, and we will be in position for a new rally. It is not always orderly or polite, but that is just the way the cycle works."

He advises, "We want to be in the best companies that are leveraged to the inevitable growth of the overseas middleclass, and we took advantage of what we think is a low risk entry point to buy them at reasonable levels."

Representing these "best in class" companies, he suggests using the current period of market volatility to build positions in Goldman Sachs, Apple and Fluor.

Each day, Steven Halpern's TheStockAdvisors.com features the latest investment ideas and market commentary from the financial newsletter community.

Also see Volatile Markets: 11 stock plays for turbulent times