I just posted something on another thread that I think a major downward pressure on stock prices at the moment is hedge funds being wound up to return cash to investors. I've seen it predicted that half of all hedge funds could be gone within a year, and it's one I'm taking seriously.
Previously, I'd be tempted to look to play damaged stocks in the US financials market because of the heavy profits that can be made - I mean, at present Ambac is at around $1.50, and last time the bulls ran, it went up past $8.
However, that comes with a lot of risk and instability, so I'm probably look to more stable companies, especially those in the US financials that have acquired other major companies - Morgan Stanley, Bank of America, Wells Fargo, etc. Or, at least, balance my portfolio more towards these, because holding for the long term (ie, over 10-20 years could be very enriching).
However, I'm also looking at no fast recovery, and instead very muted economy growth out of the recession for years.
The Great Depression and Japan both serve as the nearest models for the current situation, which means looking at the long term picture for investing strategies, and I daren't risk day trading in current conditions, so would probably be forced to look long-term, and look at the stronger US banks.
I tend not to look at other sectors, but I'm sure there are other opportunities.
The interesting question is what the next bubble will be - green tech already showed a lot of promise in this area before the credit crunch hit, so maybe somewhere to look more closely at I guess.
Oh, just to add - there's a lot of talk, but I think everything is underlined by the housing market - and Winter is never a good time for the property market, but Spring traditionally is. As the property sale reports tend to be a few months behind, that means looking for a bull market to start to really establish itself around June, through with quite a few ups and downs in between.
Retailers will probably take a beating, so economic news over Jan-March may be bleak - but have investors already factored this in?
Also, I think Google's hold on internet advertising puts it in an incredible position - internet advertising is the only platform companies can really measure returns from, and it remains a market with strong grwoth prospects over even the near term, as print and TV advertising continues down.
2c.