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What's Really Making People Money Right NowBy Dr. Steve SjuggerudFriday, August 22, 2008
Funny how times change... In 1999, tech stocks were the darlings of the investment world. Today they're completely forgotten... which is exactly when you want to consider buying them. Tech stocks are making a compelling case for themselves, right now... I think they may be on the brink of an extraordinary new bull market. Let me explain... A decade ago, investors realized companies like Intel and Texas Instruments made the crucial "heart and brain" of most new technologies – the semiconductor chip. So they pushed the shares up big time...
Today, it's still true these companies make the most crucial component in just about every electronic gizmo. But nobody cares... These three names are down an average of 70% since their 2000 highs. Instead of being priced as cutting-edge technologies, they're now priced as if they're commodities businesses... But wait! We have some signs of life! Semiconductor stocks are now cheaper than they've been since the beginning of 1997, by most measures of value. The industry has matured... These stocks are now paying dividends and have the highest dividend yields ever. And it seems like whenever tech stocks get this cheap, they stage a nice rally:
When the market started to move after bottoming in March, semiconductor stocks jumped nicely. And after the market bottomed in July, once again, semiconductor stocks bounced big. I think semiconductor stocks – and tech stocks in general – could be one of the leaders of a new bull market.
They're as cheap as they've been in a decade. They're completely ignored by investors. And they're sneaking in on an uptrend. Uptrends are hard to come by in this terrible bear market... but tech stocks have shown excellent relative strength this month. When the markets finally start to recover, look for tech stocks to lead the way. Good investing, SteveEditor's note: Steve Sjuggerud is a regular contributor to DailyWealth, a free investment newsletter focused on the world's best contrarian opportunities. We write with a simple belief in mind: You don't have to take big risks to make big money with your investments.
Further Reading:
The First "Screaming Buy" of 2008 
THE EASY WAY TO OWN THE "WORLD'S BIGGEST" World's biggest bank... World's biggest oil company... World's biggest phone company... Although these companies are enjoying huge growth right now, the China selloff has pushed FXI down 43% from its October 2007 peak. Of course, the trend is down for stocks of all sizes and nationalities... But when the trend finally turns up, this fund is worth a look. It's one of the easiest ways to own the "century's biggest" growth story. |
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