Keep an Eye on Small-Cap Technology
Monday, November 20th, 2006
By Mitchell Clark, B.Comm. for Profit Confidential
There more and more I look at this market, the more pleased I am with the small-cap investment opportunities presenting themselves. The broader stock market indices are a little stuck right now, but I’m really finding some innovative companies with excellent wealth-creating potential.
Right now, the stock market is worried about slowing economic growth, and the continuing threat of inflation. Only corporate earnings have helped this market stay as lofty as it is.
Frankly, I’m surprised by the resilience of this market. This is why I do expect a correction in stock prices in the near-term. I predict that there will be some catalyst such as bad economic news, or a geopolitical event, which will precipitate a short-lived market pullback.
If you pull up the charts on the main market averages, you will see that they’ve been rallying since July of this year. It is only natural after such a strong run for stock prices to take a bit of a rest.
If this action takes place, I still contend that the best place to be speculating in the stock market is in smaller-cap companies. The large-caps have had their run with the Dow Jones Industrial Average hitting new highs.
I really like small-cap technology companies going forward. Large-cap technology isn’t doing much in this market because the big industry companies are feeling the weakness in the general economy. This doesn’t preclude, however, finding some great wealth-creating small-cap technology companies that are innovators in their industry. In fact, right now I’m finding some great opportunities from newly listed companies.
Finally, another area that continues to be a hotbed of opportunity in the stock market is China stocks. Without question, small- and mid-cap China companies will provide the big excitement for the stock market over the next several years, regardless of what happens to the broader market.
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Tags: chinese stocks, Dow Jones Industrials, investment opportunity, stock market
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Mitchell is a Senior Editor at Lombardi Financial specializing in small-cap stocks. He’s the editor of a variety of popular Lombardi Financial newsletters, such as Penny Stock Reporter, Micro-Cap Stocks, and Monster Profits. Mitchell, who has been with Lombardi Financial for thirteen years, won the Jack Madden Prize in economic history and is a long-time student of equity markets. Prior to joining Lombardi, Mitchell was as a stock broker for a large investment bank. While Mitchell is not working he enjoys fly fishing, motorcycling and tending to his hobby farm.




