With markets hitting new lows everyday, is it time to start buying? A look at a few stocks.
Stocks have finally started to go down and it is an exciting time. Sure, many of us are seeing are stocks plummet, but this is now a great opportunity to purchase some great companies at increasingly attractive prices. Many companies are 30% or more off of their highs. Companies such as Dell Computer, Microsoft and Apple are some examples. The great thing about what is happening now is that, it becomes very likely that you will make a profit if you invest in some of the stocks now. When you purchase stocks at lower prices, assuming fundamentals are the same, you assume lower risk. The other thing is that these big market swings is that things become much more predictable. Like most stock market declines, it will eventually go back up and nearly all of the stocks will go up with the market indexes. In a normal market, trying to pick a stock and waiting for it to go up will not be as easy as with these big market declines. Markets have been going up for so long now, and much of it is being fueled by new participants who have discovered how easy buying stocks are over the Internet. Much of the new money is borrowed money and will help push the stock market lower as people start selling to meet their margin requirements. This on top of some other news such as high oil prices, fear of inflation, and the election should help push markets lower and create a terrific opportunity for the investor. Great companies such as Dell Computer, and Microsoft are starting to near attractive prices. Dell Computer has already shown itself as a leader in the PC market and is now aiming at the very attractive server market. It has been showing great success in this area. Sure, growth isn't always symmetrical and their will be times such as now when it slows, but it should continue to grow revenues and earnings at rates much higher than other companies. One of the greatest things about Dell is that they have great customer loyalty while maintaining very good Return on Equity rates. Microsoft is also another possibility. The company is now in a pivotal phase which may make it slightly risky, but the new products that they have coming out and their excellent track record may make this an attractive investment. Microsoft still has the dominant operating system for PCs, office suite and is now working to becoming the #1 network operating system with Windows 2000. They are also working on a very attractive area which is the mainframe operating system. For years this has been dominated by UNIX and now Microsoft has developed a Windows 2000 Datacenter server which will be an attractive alternative to Unix or Linux for Mainframes. They also have been receiving great reviews on their SQL Server program which is a database server and a competitor to Oracle's product. Some speed tests have shown their new version to be faster than Oracle's product. I believe that Microsoft will slowly eat into Oracle's share and eventually may dominate this market as well. One of the biggest things on their hands is the Justice Department. Their biggest threat could be a breakup. Although this seems far-fetched, Judge Jackson seems to be very much against Microsoft. What seems more likely is a large fine for integrating IE with Windows and for other things. Another possibly attractive company is Apple. The stock is now trading at about 2times the amount of cash that they have on hand. Now with Jobs on hand, the company has a vision and their products have been improving. They have a new operating system coming out and it has received some good reviews. Jobs has proven himself as a great salesman and a pushes his people to do their best. One of the issues Apple is currently facing is lack of demand for their Cube product. It is possible that Apple may even lose money for a little while unless they can get people to buy their product. But, this may just be a speed bump for Apple. The company is selling at almost Benjamin Graham prices, so the worst is already reflected in the stock price. If you would like to discuss a stock or ask the author about different stocks, please do so at the forum.
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