Games of chance: Lotto or Wall Street

Maybe that's how investors should be thinking about many stocks at this point. With shares of some of America's biggest companies beaten down to single-digit prices, either they're going to pay off handsomely in the next few years or they'll be worthless.

Build a portfolio of these stocks, and your odds of winning big with at least a few of them may be a lot better than your odds of winning a real Lotto jackpot.

In the Standard & Poor's 500 index of major U.S. companies, about 100 -- one-fifth -- were trading below $10 on Friday. The list is remarkable because it includes instantly recognizable brand names.

Most investors know that auto giants General Motors Corp. and Ford Motor Co. have crashed to fast-food menu prices. GM closed at $3.06 on Friday; Ford was at $1.43.

But the single-digit club now spans many industries: Apparel maker Liz Claiborne Inc. is at $1.79 a share; hotel chain Wyndham Worldwide Corp. sells for $3.02; aluminum titan Alcoa Inc. is at $8.44.

This is America, land of giant companies with tiny stock prices. And that didn't change much Friday, despite the market's sharp rebound from what was an 11-year low on the S&P 500 on

Thursday.

Now, "tiny" is relative, of course. A low share price doesn't necessarily mean a company is a bargain. What counts is the earnings power behind the stock.

In theory, companies that are selling in single digits have dismal earnings prospects -- they're "cheap for a reason," as the old Wall Street line goes.

Once a stock falls to low-single-digit territory, it often means investors believe the company is doomed. So hunting for a bargain in that realm is fraught with peril.

But I wish I had a nickel for every time some trader or analyst has told me in recent weeks that no one is paying attention to the fundamentals anymore.

Almost every stock chart looks exactly the same: Prices just fell off a cliff beginning in mid-September as the credit crisis worsened and investors began to realize that the global economy was at risk of a severe recession.

"The market doesn't trade on the fundamentals or the technicals. It's fear-based," said Joe Saluzzi, a partner at Themis Trading in Chatham, N.J.