I have made many bad decisions when it comes to investing, but my logic has always been very sound. I want to put it on record that if you have access to any money that isn't invested you should be buying like crazy right now. Now don't do what I did and not hedge (i.e. buy some downside protection) but this is the time when fast millionaires are made. Buy foreclosed properties and get in the market!
Greed and Fear predominate in the marketplace. You can't beat people based on the information you have (although what my friend Geoff and legendary mutual fund manager Peter Lynch do is a very good idea - visiting the stores and seeing what their traffic is like, etc) but you can beat them based on resolve. You have to be greedy when others fear and fear when others are greedy. That's it. Put the odds in your favor and become the house at the casino!