Q: So this is a historic buying opportunity? A: Right. We are in the process of creating a bottom, most likely in the next 12 to 18 months. As for buying opportunities, they are not confined to small-caps. We've got the S&P at a multiple of about 11. There are some larger-cap industrials like an Eaton [ETN] and Parker Hannifin [PH] selling at six or seven multiples on current earnings. You could haircut earnings next year way beyond your imagination, say 30% to 40%, and you still have a single-digit multiple on the stocks.

Q: So this is a historic buying opportunity? A: Right. We are in the process of creating a bottom, most likely in the next 12 to 18 months. As for buying opportunities, they are not confined to small-caps. We've got the S&P at a multiple of about 11. There are some larger-cap industrials like an Eaton [ETN] and Parker Hannifin [PH] selling at six or seven multiples on current earnings. You could haircut earnings next year way beyond your imagination, say 30% to 40%, and you still have a single-digit multiple on the stocks.

Q: The value of the stock has been cut in half this year. Is that simply because of the faltering economy? A: Yes, the market is discounting that on just about every stock that is down 40% or more. So clearly, some of that has occurred. We felt that the stock was expensive when it was up in the low-to-mid-50s, and we had actually pared back our position. But we have seen the stock down enough, in the high 20s and low 30s, and that gave us a chance to buy more with it selling at 10 to 11 times earnings. That's unusually attractive for a company that for the past five years had grown its sales at about a 20% rate and earnings at a 16% rate. At a minimum, they ought to grow earnings and revenues [by] double-digits per annum in the next five years.

Q: Are there any concerns about their business holding up in this environment? A: Investors will find something to have concerns about when they are fearful and when they are looking at things half-empty -- in this case because state and local governments and municipalities are clearly under revenue pressure because of the economy. The stock came down from the low 60s late last year to the low 20s in the past month or two. But they will earn about $2.60 or $2.65 this year, so the stock is trading at about nine times. We expect the company to grow at a minimum price of 10% next year and to earn near $3 a share. They are likely to grow faster than the market.

Q: One more pick, please. A: Plexus [PLXS], a technology company and a contract manufacturer. They provide product engineering skills, and then will actually manufacture the product for an OEM [original-equipment manufacturer] customer. Plexus has premium levels of profitability in an industry that has relatively narrow margins. They generate pretax margins on a consistent basis of 5% to 7%, in an industry whose average is closer to 2% or 3%. The company has minimal debt, and they've grown steadily over time. They are diversified across a number of sectors, both in computing and networking. Medical is a big market for them in terms of customers. They also make and design products for the industrial market, defense and aerospace. We like the diversification of their portfolio. In their most recent fiscal year, which they just completed, they earned $1.94 a share. The stock is currently around $13. This is just an unusual opportunity to buy a premium company with the financial profile they have, and the know-how that few other companies can match.