While most investors are fretting the markets recent contraction, you can be quite confident that "my pal Warren" has a smile on his face, as does Peter Lynch, Ken Heebner, Bill Miller, Bruce Berkowitz, and any number of fellow value investors that know now may be a time of opportunity. That is because they have the experience and understanding to pounce when they have a chance to buy things cheap.

This is the fourth installment of my series to discover just that: cheap stocks. If you would like to get on board from the beginning then review the initial post which screened for stocks with lower than market average P/E ratios, see Serious Money: Market Looks Cheap to Me -- 35 Stocks. In the second installment, I looked at yield and PEG ratios: Serious Money: Still Cheap Market -- 35 Stocks + Yields & Growth. Then I moved on to the the P/S and P/CF metrics in Serious Money: Cheapest Stocks Yet -- From 35 to 26, cutting nine stocks.

If you were to calculate a headlines/efficacy ratio for government and corporate leaders, executive pay czar Kenneth Feinberg would have to rank pretty high on the "most press for least accomplished" list.

Now that Bank of America (BAC) and Citigroup (C) are out from the somewhat watchful eye of Mr. Feinberg, he has only American International Group (AIG), the car companies, and GMAC to meddle with at little benefit to anyone.

So what does he do to keep himself occupied? He chats on the phone with Goldman Sachs (GS) CEO Lloyd Blankfein about how that company can better align pay for its executives, even though he has no authority over -- or interest in -- that company's policies.

The catastrophe bond market will be heating up over the next few months, thanks to a combination of favorable market conditions and new investors. Michael Halsband, Vice President at Goldman Sachs (GS), said to Reuters that the cat bond issuance market got off to an early start in January, despite the fact that the first quarter is usually rather quiet. This follows the recent closing of the year's first cat bond, Foundation Re III, by The Hartford (HIG).

According to Halsband, "From January to June this year, $2.7 billion of transactions will mature and most of that is expected to be placed straight back into the ILS [insurance-linked securities] sector," continuing, "In addition, we believe between $1.5 and $2.5 billion of new capital has flowed into dedicated ILS funds and along with the $2.7 billion of maturities. Around $5 billion will be available to be put to work in the cat bond sector."

How do you account for sovereign debt risk outside of the credit default swap markets? That is what traders were asking themselves today over fears of Portugal, Greece, and other issues. A growing China-U.S. tension and the reality of lower consumer after-tax monies in 2011, and on. The jobs data today was going further and further away from anything decent, and the fears of Friday's unemployment value of most assets fell... stocks and commodities hit skid row.

Here were today's unofficial closing bell levels:

Dow 9,999.84 -270.71 (-2.64%)
S&P 500 1,062.86 -34.42 (-3.14%)
Nasdaq 2,125.43 -65.48 (-2.99%)

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Is the market overpriced? Maybe it is cheap, or perhaps it is fairly valued. This is the third in a series examining the issue. Still, it has been my contention that it does not make any difference because no matter how the market is valued as a whole, there are plenty of cheap stocks out there to accommodate a large amount of capital allocation even this deep into a bull run.

If you would like to follow along from the beginning, the initial post screened stocks for lower than market average P/E ratios: Serious Money: Market Looks Cheap to Me -- 35 Stocks. In the second installment, I looked at yield and PEG ratios: Serious Money: Still Cheap Market -- 35 Stocks + Yields & Growth.

Let's try and reduce the gambling by examining the facts and ignoring what the bulls and bears are chatting up at the moment. We started the process by screening for lower than market average P/E ratios, see: Serious Money: Market Looks Cheap to Me -- 35 Stocks.

Two more important criteria influence today's review: the yield, a favorite of "my pal Warren"; and the price-to-earnings-to-growth (PEG) a focus of Peter Lynch, the retired fund manager extraordinaire of Fidelity's Magellan Fund.

Banks are the kink between the financial markets and the Main Street economy. They are also the lubricant -- when they are lending -- of a growing economy.

Using time-honored but now discarded accounting standards, U.S. banks, as a group, are insolvent. They are hoarding cash because deep in the recesses of little offices, they know they will be exposed as insolvent if they have to dump toxic assets on the market. They are also looking at reduced activity due to the economy and new taxes and regulations, and therefore lower profits. And when the Fed raises interest rates, their spreads will contract, also hitting profits.

I love my country: the chaos, the hurly-burly of democracy, the hard work of quiet people and the great, big heart as shown by our private donations to Haiti at a time of near 20% unemployment and underemployment. We forgive wayward politicians and athletes, let our children make more decisions than virtually any people on Earth and we stand for something -- a true city on a hill. But right now, that city is in political chaos ... and pretty broke.

Although, I don't like to say it, it is time to short the United States.

We frequently receive comments that the market is overpriced. Recently one of our active readers commented that the market P/E was 30, which it's not. The actual rate (S&P forecast) has been even higher at times due to the volatile market.

The average should trend closer to the long term P/E of 15.7 in the next few years. However, I have reviewed companies often covered on our site and come up with a list of 35 stocks that have price-to-earning ratios below the long-term average already. I think there are dozens of bargains regardless of the status of the overall market.

The following article was contributed via Seed.com, AOL's new platform for freelance writers.

"I don't like to opine on the stock market, and again I emphasize that I have no idea what the market will do in the short term. Nevertheless, I'll follow the lead of a restaurant that opened in any empty bank building and then advertised: 'Put your mouth where your money was.' Today my money and my mouth both say equities."
~ Warren Buffet, in a New York Times op-ed from October 17, 2008.

With the release in 2008 of the highly-anticipated biography of Warren Buffet The Snowball: Warren Buffet and the Business of Life, the somewhat unlikely cult of personality that is the Oracle of Omaha once again garnered attention. There are legions of Buffet adherents, and there is no doubt that his underlying principles are sound. He lives in the same house in Omaha that he bought in 1958 for about $31,500 and that today is valued at around $700,000. His stock picks have been similarly spectacular in many instances. But the Contrary Investor (that's me) would proffer that there are two very basic, very important distinctions in Mr. Buffet's investment process that followers simply cannot duplicate.

The following article was contributed via Seed.com, AOL's new platform for freelance writers.

Warren Buffett is one of the few investors in the world that has consistently succeeded where others failed. Part of his success is due to his common sense approach to the stock market. Investors have mocked Buffett for his old fashioned approach to investing when he sat out the dot com era bubble. But Buffett had the last laugh when others lost out during the bust.

Buffett also managed to largely avoid the major losses investors faced when they invested in securities dependent on subprime lending practices. In fact, he managed to profit from it.

Here are some principles Warren Buffett follows and investors would be wise to model:

While we wait for details on the president's plan to break up the banks, I wonder why the banks can't decide to break themselves up?

Wouldn't it be so much better to break up themselves than wait for President Obama to do it for them? Investment banks specialize in mergers and acquisitions and the converse spin-offs. Mergers and acquisitions are big business for Wall Street and they happen all the time. In fact, that's how many of the banks got so big.

Here are some highlights from this past week's earnings coverage on BloggingStocks:

• Advanced Micro Devices Inc. (AMD) shares declined despite an earnings beat and a positive outlook
• Bank of America Corp. (BAC) reported that its Q4 loss widened more than expected by Wall Street.
• Capital One Financial Corp. (COF) reported better-than-expected earnings but shares declined.
• Colgate-Palmolive Co. (CL) is seen as on-track to record double-digit earnings growth in 2010.
• Cree Inc. (CREE) strong earnings and revenue growth sent shares to a new 52-week high.

With a market cap of about $4 billion, WebMD Health Corp. (WBMD) shows that there is a big market for online health content. Keep in mind that nearly 70% of all adults in the US used the Net to get health care information (for 2009).

So, to capitalize on the financial opportunities, Everyday Health also wants to become a public company (the filing came this week).

Banks have seen a hectic couple of days' of trading, thanks to a bevy of news. I thought it may be good to take a look at some earnings results from a few of the banks, and what it could mean for the economy going forward.

First, let's look at the earnings:

• JPMorgan Chase (JPM): earnings of 74 cents per share; expectations for 60 cents per share
• Citigroup (C): a loss of six cents per share; expectations for a loss of 33 cents per share
• Goldman Sachs (GS): earnings of $8.20 per share; expectations for earnings of $5.20