My old boss and mentor in this business was the late great Al Frank. He was known as a philosophical kind of guy but not necessarily as a deep thinker, and one piece of advice has stuck with me over the years.

That advice was the key to his success. He said not to be afraid to buy the stuff when it stinks the worst (his grammar, not mine).

Back in May, I wrote about American Airlines (AMR). Then, the stock was trading in the mid six dollar per share range after suffering a punishing 24 percent one-day decline on concerns about skyrocketing fuel prices.

Had you purchased the stock then, when it really stunk, you would have had a very nice gain on your hands by mid-September. To be sure, as often happens, I did not call the bottom. But by following my old boss’ advice and holding my nose and buying an undervalued stock when nobody wanted it yielded a 100 percent gain in just a few months.

Back in May, J.P. Morgan forecast a significant sell-off in crude oil in the fourth quarter, down to $92 per barrel.  I said even a modest decline in oil prices will spark a relief rally in the airline industry that will send their shares soaring.

Boy, was I right. In addition, AMR began adapting to the current environment by retiring older, inefficient planes, charging for checked baggage and cutting jobs. They weathered the storm, and the stock responded accordingly.

As it turns out, J.P. Morgan was wrong in their forecast about the price of oil. The price of crude has blown past the $92 level, all the way down to today’s price of $53 per barrel. That has to be good for AMR and the entire airline industry.

Ah, that would be so if the economy were not in shambles.

Individuals and businesses are trimming their spending in light of the uncertain economy and the coming holiday season. In September, first-class or business-class airfare fell 8 percent from a year ago and analysts see a deeper fall-off for October, November and December.

With the slow down in the economy, AMR stock has sold off.  Shares now trade for less than $7 per share.  The stock has done a complete 180 degree turn.

I truly believe that this too shall pass. Al Frank made a fortune buying stocks when they were distressed.  It might be hard to do, but if history is a guide doing so will pay big dividends.

I’d buy AMR at these prices.

This article was written by Jamie Dlugosch, contributor to InvestorPlace.com. For more actionable insight like this, go to: www.InvestorPlace.com.