The financial media and analysts are talking endlessly about the state and fragility of the stock market and whether a bottom may be near. I discussed the vulnerability to the downside in my last article. If you missed it, you may want to go back and read what I said. (See “Strategies to Protect Your Capital While Investing in This Market.”)
While stocks appear to be heading to negative ground in 2014, I view continued weakness as a buying opportunity to accumulate some stocks at a discount.
For the majority of you, I would advise staying away from the higher-beta small-cap and momentum stocks at this time and wait for things to settle down. In other words, I want to see some sustained buying support emerge to show some evidence the downside selling is coming to an end.
In the meantime, take a look at some of the bigger S&P 500 and DOW stocks that have moved lower to much more attractive entry points.
In the technology area, I like what’s happening at former Wall Street darling Microsoft Corporation (NASDAQ/MSFT) under the stewardship of CEO Satya Nadella.
While Nadella recently said some disparaging remarks on females in the workforce, what he has done at Microsoft since taking over from former CEO Steve Ballmer has been encouraging.
The rise in the stock price in Microsoft has even allowed Ballmer to pay an obscene $2.0-billon-plus for the LA Clippers. Ballmer’s failure to recognize and fully understand the big impact the mobile sector has on the technology space helped to make Microsoft insignificant for years.
Chart courtesy of www.StockCharts.com
Nadella has shifted his focus to make Microsoft a much more relevant company for the technological age we are in. While the company is known for its “Windows” platform, Microsoft is looking to develop solutions for the mobile space.
The personal computer (PC) is not dead yet, but Microsoft has shifted its focus to smartphones, tablets, and its increasingly popular “XBox One” entertainment gaming console. Microsoft also operates the “Skype” call and text solution that is excellent but probably somewhat underappreciated by the stock market. Finally, the company is also developing applications that can be used on the massively popular Apple Inc. (NADSAQ/AAPL) “iPad”—clearly a smart and strategic move by Nadella to ride the coattails of Apple.
Now, this is not to say that Microsoft is the next big thing; however, in my view, the company does offer investors a less risky buy in the technology space.
The bottom line is that Microsoft is an excellent play in technology and is worth a look on the current market weakness.