Brian.oco 0 Posting Whiz

Last week saw a potential top in commodities prices, as both oil and gold prices seem to have stalled out from their upward march in 2008. That should have spelled relief for the stock market, which has been down by 13% in 2008, as measured by the Dow Jones Industrial Average.

Yet, it didn’t. The week saw the Down finish lower by 0.63%, while the Standard & Poors 500 index rose by a meager 0.15%. The market may be waiting until after Labor Day, where it can have another two weeks to be certain that commodity prices have topped out. In the meantime, Americans will be back from their summer vacations and “idle” time, where historically that leads to more investment activity on Wall Street.

In a hopeful sign, tech investors aren’t waiting for Labor Day or any other day. Last week the Nasdaq index rose for its fifth straight week, by 1.59%. Signs that companies are still investing in technologies has given investors a good reason to seek shelter in tech stock, especially given so much uncertainty with ongoing credit and energy price issues.

That should spell opportunity for investors who want to get in ahead of the market. When investors are pessimistic that historically means that there are good buying opportunities out there for investors who do their homework, have some patience, and don’t mind some risk.

The key is taking stock evaluation on a company-by-company basis.

Consider a company like Qualcomm, about which I’ve written about several times this summer. The company’s stock was flat for several years, pulled back by concerns over legal woes involving patent issues with Nokia. Investors were down on the company and stayed away from the stock in droves. Yet if you studied the situation and realized that a deal was bound to be brokered, you would have made out like a bandit. Once that happened, Qualcomm’s stock shot up by 30% and investors who had absorbed some risk and figured out the legal issues were resolvable were rewarded handsomely.

If you can’t stomach too much risk, dips your toes in the water by buying stocks like Qualcomm on a bit-by-bit basis, staggered over weeks or even months at a time. Of course, the longer you wait, the bigger the risk of losing out on a stock’s upswing. But whatever helps you sleep better at night is usually the way to go.

In the tech market, too many investors lose the focus they should have on the underlying financial health and actual value of a given company. They cling to stock prices like a barnacle to the hull of a boat. Turn that strategy upside down, focus on value and opportunity, and you’ll win more that you’ll lose.

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