In this overheated and overvalued market, it is very easy to feel frustrated. It is very easy to walk away with a conclusion that there are no obviously good deals in the market. It seems that, due to runaway overvaluation, a lot of the American companies worth putting money to have already been bought up sky-high. It appears that all the solid companies are taken.
This is definitely the conclusion that you will have if you are trying to play the market the traditional way. If you are trying to use fundamental investing strategies, looking at solid companies and buying them up, you are going to run into this problem. You are going to have to step up and just pay top dollar. In other words, you run the very real risk of buying at the top.
The good news is that there are otherwise solid companies positioned for the future that are facing earnings turbulence or stock price turbulence. Companies ranging from IBM (NYSE:IBM) to Microsoft (NASDAQ:MSFT) and Intel (NASDAQ:INTC) are facing issues. Why? In the tech space, there is a lot of transition going on. A lot of solid companies in the days of local software are now realizing that the future lies in cloud computing.
Take the case of Oracle (NYSE:ORCL). This database giant is a solid name and a solid brand. It also has solid earnings. However, it faces an uncertain future as it tries to transform itself into a cloud-based computing company. Such large-scale transitions are always risky. This, of course, translates to potential questions regarding its stock.
These are the types of companies you should take a long hard look at. You have to understand that these companies are so solid that even if their transition efforts falter, they are still solid companies. They have the resources and infrastructure to wait while they fully morph into cloud-computing giants. If you are looking for a solid transition play, Oracle is a good bet along with IBM.