This article is part of our Rising Star Portfolios series.

Call me a masochist, but I really like down days in the market.

I was on The Financial Exchange With Barry Armstrong on Boston's WRKO radio station Tuesday morning with two recommendations for his listeners -- Dendreon and Freeport-McMoRan Copper & Gold (NYS: FCX) . Just before I came on air, Armstrong was discussing the downward movement in the markets that morning, pointing out that the Dow was down 146 points, other indexes were down, gold and oil were down, etc.

Listening to that, however, I couldn't help but smile. You see, I was looking to add more of one of those companies, Freeport-McMoRan, to my Rising Star portfolio, the Messed-Up Expectations portfolio. (I had already added more of Dendreon, but if I hadn't, this article would discuss both companies rather than just one. Suffice it to say, I expect Dendreon's new CEO will be able to turn the story around there.)

While I wouldn't be too unhappy buying Freeport-McMoRan in the mid-$40 range (having learned my lesson about anchoring with Apple), hearing that it's retreated to under $40 was music to my ears. At this price, I believe there is a real opportunity, as I wrote here and here.

That thesis hasn't changed. Freeport has a very low cost of production for copper of just $1.01 per pound, which is great, as copper is currently selling for around $3.80 per pound. Plus, it has the strongest balance sheet among its competitors.

Company

Net Debt (cash)

Debt/Equity

Freeport-McMoRan ($1.3 billion) 19.1%
Rio Tinto (NYS: RIO) $11.9 billion 36.8%
BHP Billiton (NYS: BHP) $20.7 billion 38.8%
Newmont Mining (NYS: NEM) $2.5 billion 27.3%
Southern Copper (NYS: SCCO) $1.4 billion 68%

 Source: S&P Capital IQ.

Even better, it's just raised its dividend by 25%.

So why has the price fallen 15% in the past month? I believe it's due to increased concern over a recession in Europe and word that China's growth is going to slow down.

However, the demand for copper has risen pretty steadily for the past 100 years, and I don't see that turning around despite short-term worries. Copper's used in many different areas of modern life, including transportation, electronics and communication, machinery of all types, construction, and consumer products. You tell me: Is that demand going away (or even significantly declining) anytime soon? I don't know about you, but I'm not going to stop needing copper and neither, is the rest of the planet.

When the market offers up a company with a strong balance sheet and good long-term prospects at a much lower price than just a month ago -- especially after raising its dividend -- the proper thing to do is say "thank you" and buy some shares. That's what I'm going to do for the Messed-Up Expectations portfolio.

And that's why I like down days in the market.

Come and discuss this and other investments on my Messed-Up Expectations discussion board, or follow me on Twitter.

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This article is part of our Rising Star Portfolios series, where we give some of our most promising stock analysts cold, hard cash to manage on the Fool's behalf. We'd like you to track our performance and benefit from these real-money, real-time free stock picks. See all of our Rising Star analysts (and their portfolios).

At the time this article was published Fool analyst Jim Mueller owns shares of Freeport-McMoRan Copper & Gold and has an option position on Dendreon. He's an analyst for the Motley Fool Stock Advisor newsletter service. The Motley Fool owns shares of Freeport-McMoRan Copper & Gold and Dendreon. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool's disclosure policy is never messed up.

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