Traders remain nervous today despite approval from Congress on the final draft of Hank Paulson’s bank rescue bill. European stocks are heading towards three-week lows. US futures are down. Floyd Brown at Investment U says this is distracting from the long-term picture, and some great bargains, for contrarian investor.

The current mess has created lots of imbalance in stock prices. As thousands of financial ‘professionals’ worry about their job prospects, stock prices are getting hammered. But that doesn’t mean that all of these companies deserve this mistreatment. There are solid businesses out there that have been completely undervalued by the market.

I’ve long been a proponent of contrarian investing and buying assets on the cheap. It delivers superior long-term returns and uncovers portfolio “superstars.” And it seems that I’m not the only one beating the pavement for deep values…

Warren Buffett just took a $5 billion stake in Goldman Sachs (NYSE:GS), with the ability to buy another $5 billion more. And MidAmerican Energy, one of his subsidiaries, just bought Constellation Energy (NYSE:CEG) shares for half of what they were trading at earlier this month.

Clearly Buffett has been using the liquidity crisis to grab some phenomenal bargains. And we should be on the lookout for the same. The market’s recent fluctuations have been offering investors some tantalizing buys. (Take a look at today’s crib sheet for 3 ideas.)

So keep a level head and invest with caution in the current environment. The rules of the game are changing and short-term relief could be replaced with higher inflation and a longer bear market.

But that doesn’t mean there are some great values out there.

Source: Forget the Bailout, Buy Like Warren Buffett