The Great Recession of 2008 followed by anemic recovery of the following 3 years has created long-term value proposition in multiple sectors including finance, transportation, publishing and retail that are likely to benefit the patient investor. While the rapid stock market recovery since March 2009 has lifted many stocks out of deep doldrums, the slow economic recovery has continued to create value in several parts of the stock market.

The financial sector is clearly the sector that has suffered the most during this Great Recession, and companies like Bank of America, Wells Fargo and BB&T all have been affected adversely by this. Same is true for many European banks. Emerging market banks however, like ICICI, while affected, have recovered much of their value and are not on the same boat - mostly because they don't have the same exposure that the established economy banks do, plus they are buoyed by a rapidly growing economy that permits banks to commit more mistakes. In the established economies, as the foreclosures and home mortgage crisis gets past its trough, legal issues are worked through and prudent lending and growing economy results in a healthier balance sheet, these bank stocks will rise sharply to reflect the superior prospects for these companies. Now is the time to place those value bets in this sector.

The airline sector in transportation similarly has value plays in the "old-time" airline companies like American Airlines. These companies continue to be saddled with high labor costs and retirement benefits that they guaranteed during the golden era of flight - similar to the golden era for the automobile industry. The last decade and more however has seen airlines cut back on number of operating planes, streamlining crew operations, managing fuel costs, demanding fuel-efficient aircrafts during fleet replacements, as well as airline consolidations (Delta+NorthWest; United+Continental). Pushing this further, American Airlines is even fighting with Global Distribution Providers like Sabre to reduce the distribution cost/ticket sold, the benefits of which will drop straight to the bottom line. Labor negotiations should help further reduce fixed costs and over time, the costs of retirement funding will drop as well. If the airlines manage to maintain their prudent approach over a 5 year period, their stocks will respond handsomely to the improving business.

There are other sectors such as publishing and book-store retailing companies such as Barnes & Noble that are facing even longer-term secular trends that are against it - Internet, E-books, competition like Amazon.com and other factors are creating solid headwinds for these companies and generally for this sector. However, this has created a situation where there may be space for only one physical specialty chain to cater to customers who love to browse books and enjoy the atmosphere. This coupled with opportunities to up-sell to these clients (coffee/snacks, children toys, other events) should allow at least one specialty store chain to survive.

All told, this is a fabulous time to be a 5 year value-investor and seek out companies that can, with a good margin of safety, let you double/triple your money over that time frame - a return of 12-24% per year!

Happy investing!