So when I say that you should make a list of stocks to buy, I’m not saying you should jump into the market and buy them just because they’re down a few points. I’m saying you should name your price, have the capital ready, and jump on the opportunity IF it comes.

And if this correction is even half as big as I expect it to be, just about every boat will get sunk as the tide recedes.

Even big, blue chip stocks that every investor should own will get hammered.

Last year, Exxon-Mobil (NYSE: XOM) shares sold for less than $60 – even cheaper than they were during the depths of the 2008-2009 bear market – briefly selling for less than 10 times earnings.

That’s the kind of company that should be on your shopping list at that kind of price.

It's not often you get a chance to buy a commodity for the less than the price you'd pay during the Carter Administration. That's how I know the time is right to start nibbling at companies in the sector. The underlying asset is a true bargain - no matter how you dice it. So the companies that can bring this particular commodity to market and remain profitable at today's prices are destined to be huge profit machines in the coming years as the price of all "real stuff" continues to rise.

But if you're reading this letter right now, you probably don't care one lick for this commodity. It's the opposite of sexy commodities like oil or gold. In some PC circles it might even offend. It's certainly not one of those commodity investments that you'll brag to a neighbor about at a cocktail party or over a back-yard cookout.

The thing is, this boring, unloved and slightly un-PC investment has creamed the broad market over the past 23 years.

Deltic Timber Corp. (NYSE: DEL) CEO Ray Dillon said the depressed residential housing market will continue throughout the remainder of 2007, well into 2008 and maybe early 2009. Dillon made the comments during a midday conference call.

“Deltic’s reported net income for the third quarter of 2007 was largely impacted by the depressed environment that exists for our lumber and real estate market,” Dillon said. “I am pleased to report positive financial results despite these difficult operating conditions.”

After Monday’s close, the El Dorado, Ark.-based company, which harvests and markets lumber, reported third-quarter sales of $25.5 million, down 42% from $43.7 million a year earlier. Deltic’s quarterly net income plunged 96% to $0.25 million, from $6.4 million during the same period of 2006.

“With the current short-term market outlook for the residential real estate and lumber markets, operating in forest products and real estate development business will be very challenging for some time,” the chief executive said. “We will continue to maximize sales realizations where possible while concentrating on being even more efficient and cost conscious than ever before in order to weather this period.”

A fire at a southern Arkansas mill during August caused Deltic to halt operations. Dillon said the firm’s insurance policy will cover any lost business and damage resulting from the fire.

“The mill’s segment operations for the quarter were greatly affected by this fire, as it caused us to temporarily suspend production,” Dillon said. “The expected property damage proceeds could exceed the book value of the assets damaged in the fire and related cleanup costs by over $1 million.”

Universal Forest Products, Inc. (Nasdaq: UFPI) shares are up after the lumberyard company reported after Wednesday’s close that its third-quarter net sales increased to $678.4 million, above analyst estimates of $471.2 million and from $672.9 million a year earlier. The firm’s earnings, however, declined to $11.3 million, or $0.59 per share, above Wall Street projections of $0.31 per share but below $17.7 million, or $0.91 per share, during the same period of 2006.

“We’re focused on building market share, managing our working capital, reducing costs, and enhancing our balance of business by adding new products and exploring new areas for growth,” CEO Michael Glenn said in a statement. “By focusing on these objectives, we’re positioning ourselves well for the market’s return to strength.”

Sales in the company’s do-it-yourself segment increased 11.2% during the quarter, but site-built construction sales fell 24%.

In a press release, Universal Forest Products said because it doesn’t believe the housing market will recover until 2009, the company is lowering its fiscal 2007 sales target to a range of $2.48 billion to $2.52 billion, from a previous range of $2.375 billion to $2.425 billion. The company also lowered its earnings targets to a range of $32 million to $35 million, from a previous outlook of $40 million to $42 million.

For the fourth quarter, the Grand Rapids, Mich.-based company expects net sales of between $480 million and $520 million and earnings in the range of breakeven to $3 million.

In morning trading, UFPI shares are up 6.14%, or $1.68, at $30.84. Over the last 52 weeks, shares have ranged from $28.95 to $54.61.