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I’ll be the first to concede the going’s tough. That almost every “time-tested” strategy that worked well in bull markets is sputtering and collapsing.

But is it so bad we’ve given up on turning a profit? And just resigned ourselves to preserving our principal, right?

WRONG.

This week the Treasury sold $32 billion in 4-week bills at a yield of ZERO percent.

That’s not a typo. Investors actually clamored for the opportunity to lend the government their money in return for absolutely no return. In fact, investors bid $126 billion at the auction, more than four times the amount available.

As Michael Franzese, the head of government bond trading at Standard Chartered explains, “I have never seen this before… It’s all about capital preservation for the turn of the year, not capital appreciation.”

Forget unbelievable. It’s idiotic. What investors are essentially saying is that absolutely no better opportunity exists in the market right now – that survival is their paramount goal of investing, not profiting. But ignore what the lemmings are doing. Their folly is creating endless (and historic) opportunities for us to increase our wealth. Of course, simply telling you that will not suffice…

6 Market Investment Opportunities Right Now

Let me share with you a short-list of market investment opportunities I’m researching and taking advantage of on a daily basis. If nothing else, it should make you think twice before you follow the $32 billion worth of stupid money…

• International Stocks: Forget decoupling. It was a farce. The United States caught a cold… and international markets caught pneumonia. The offshoot? International markets are the cheapest on the planet – despite much stronger growth prospects than in the United States. For instance, the average Russian stock trades for just three times earnings! South Africa and Brazil are the next cheapest at six and seven times, respectively. An easy way to capture upside here is to rebalance your portfolio by adding money to your diversified international funds or investments. One of my favorite options here is the Templeton Emerging Markets Fund (NYSE:EMF), run by the best international manager around, Mark Mobius.
• “Free” Stocks: Hundreds of stocks trade below their cash balances, making them essentially free. Some will of course, burn through that cash faster than my wife on a shopping spree. So we can’t buy blindly. But that’s not the case for all of these stocks. One compelling opportunity I recently presented to my subscribers is Immersion Corp. (Nasdaq:IMMR) – a leader in haptic technology. Forget cash on hand, its patent portfolio is worth more than the current stock price.
• Income: Dividend yields rest at 15-year highs. Of course, not all dividend-paying stocks are created equal. Many will slash or suspend payments just to survive the downturn. But others won’t. The master limited partnership (MLP) space is rife with opportunity. Investors seem to forget these companies aren’t impacted by the price of oil and gas. They just get paid to transport it. The price of oil might be off 70%, but demand is not. My favorite play here is Kinder Morgan Energy (NYSE:KMP). It just increased its dividend and currently offers investors an attractive 8.7% yield.
• Munis: We all know there are NO guarantees in investing. But I can guarantee taxes are going up. How else will the government fund the billions upon billions in new spending? Especially, at a time when tax receipts will plummet. Thanks to a drop in corporate profits and the loss of 1.2 million taxpayers to unemployment. No surprise, the herd is piling out of munis ($7.4 billion so far this quarter) at exactly the wrong time. Their folly is creating attractive tax-free income yields and upside for us. For instance, the Vanguard Intermediate Tax Exempt Fund (VWITX) currently sports a 4.25% yield. That’s tax free and equivalent to earning 6.5% (based on a 35% tax bracket).
• Real Estate: Pricing remains completely irrational for real estate investment trusts (REITs). Some closed-end funds are off as much as 90%. Dirt is cheap – but it isn’t that cheap. This is a once-in-a-lifetime rebound opportunity. If nothing else, capitalize on the unstoppable trend of homeowners converting into renters by considering an apartment like Equity Residential Properties (NYSE:EQR).
• Short selling: An economic recovery won’t save every company. Plenty will remain in the tank, or worse, end up on the courthouse steps. Yet, most investors overlook the simple strategy to profit from these collapses – selling short. But they shouldn’t. In these markets it’s one of the few strategies consistently booking winners. That’s why I’ve been using it for my subscribers. Just last week, we booked a 50% winner in The New York Times Company (NYSE:NYT), for example.

Remember this is just my short-list. The key takeaway is simple – investment opportunities abound.

Granted, we might have to work harder than normal to unearth them. But we certainly don’t have to resign ourselves to handing over our hard earned capital to the government for nothing in return. After all, that privilege is reserved for our tax dollars.

Source: 32 Billion Reasons The Average Investor Will Fail

Immersion develops haptic technologies that allow people to use touch to operate digital devices. Think the type of fancy touch-screen technology used by the much-hyped iPhone.

Paul says Immersion remains loaded with potential but remains still somewhat on the launchpad. But with three major set to toss the firm new business, Paul is bullish…

While Immersion has met its financial expectations, the mass adoption curve for its technology has been pushed out and has overlapped a point in time where high beta stocks have been stripped of premium valuations.

That said, we believe the underlying fundamentals remain intact and the stock is attractive here.

In case you don’t know about Immersion’s industry, the company is a market leader in the field of haptics – a technology that simplifies and enhances human interaction with everyday technology. The company holds hundreds of patents and provides products and patent licensing to some of the world’s biggest firms.

We’ve already seen the first wave of enthusiasm, as Immersion’s technology is incorporated in cutting-edge consumer electronics products like cellphones (Immersion’s patented VibTonz software is already in Nokia (NYSE: NOK), Samsung, and Motorola (NYSE: MOT) handsets) and Sony (NYSE:SNE) PlayStation video games.

However, the company’s smaller segments (mobility, gaming, and automotive) are enjoying faster growth at the moment and offer the most opportunity. And as this technology matures, it will filter into products with lower price points that have mass appeal. At that point, IMMR’s top line will have the potential to grow exponentially in line with unit shipments.

Medical Division Set To Spring Back To Life, While Other Segments Rise Rapidly

While the consumer products receive most of the attention, the bulk of Immersion’s revenue actually comes from medical training devices that help surgeons learn their craft.

That core business has slowed in the US recently, but a push to expand in Europe and Asia is likely to reaccelerate revenues from this segment later this year. And even as its Medical division has slowed, Immersion has managed to offset that through rapid growth in newer areas.

For example, strength in the Mobility (NADAQ:USMO) division saw sales shoot up by ten times during the most recent quarter and now accounts for 13% of revenues. And looking ahead to the remainder of 2008, there is plenty to be excited about…

The Buyer’s Favorite Word

Right off the bat, three major industries are set to toss more business Immersion’s way:

1. Auto: BMW (FRA:BMW) is expanding the use of iDrive into its 3-series models.
2. Telecom: Samsung and LG are shipping handsets that leverage haptics and Nokia is expected to follow later this year.
3. Gaming: 3M (NYSE:MMM) is producing casino gaming screens, which could offer upside over the second half of 2008.

That’s the business end. But what about the stock’s valuation?

In a word: Cheap.

While the concept of buying low and selling high is a mainstay of investing, every now and again, this simple concept temporarily eludes investors.

That explains why Immersion trades for less than two times its net cash. In the software industry, buying a profitable company at that price is relatively unheard of. But at a time when fear is rampant, you occasionally get the opportunity to snag a bargain.

In Immersion’s case, it boasts $4.52 in net cash per share. This is in cash equivalents that could be quickly liquidated if a majority holder were to buy the company.

This basically means that if a third party such as Sony or Apple (NASDAQ:AAPL) or Oracle (NASDAQ:ORCL) were to buy the company, it would be getting the operating business and patent portfolio for $2.30 per share (assuming a $6.82 share price). When stocks get to these levels, it becomes cheaper for a partner to acquire the firm than pay royalties for the licenses.

The Big Boys Bailed Out… But Are Now Getting Back In

Unless you took a vacation from the planet over the first three months of the year, you’ll probably know that it represented the worst start to the year for the stock market, as gridlock in the credit markets plunged financial institutions into dire straits.

That goes some way to explaining the unusual selling pressure that Immersion endured during the first quarter.

For example, Immersion’s largest holder, Goldman Sachs (NYSE: GS), all but liquidated its position over that period. Goldman sold 78% of its 3.1 million share position and if you assume that the firm sold those evenly throughout the quarter (a measured program of selling, rather than panic), it accounted for 5% of the daily volume each day. This represents a significant hurdle for a stock to overcome in a stable market, let alone a panic situation.

Since then, however, big institutions have ramped up their buying of Immersion shares. Two large shareholders have stepped up big-time, with Balyasny beefing up the size of its position by 131%, while Immersion’s largest current shareholder, Mazama, has bought 23% more stock.

This represents a strong vote of confidence from institutions that are intimate with Immersion’s story and have combined to own 15% of the shares outstanding.

Here’s The Skinny On Immersion’s Plan To Fatten Up

To sum up, Immersion has its finger on several different developing markets that have the ability to dramatically increase its growth. If one of them catches fire, investors will benefit from accelerating profit growth and multiple expansion. Additionally, Immersion remains a buyout candidate for the likes of Sony or Samsung and a precedent was set earlier this year when Nokia acquired Navteq (NYSE:NVT).

The downside scenario would be if Immersion’s share price stagnates at current levels. That could happen if increasing pressure on consumer spending delays the adoption of devices using haptics. However, the low valuation would likely still provide support for the stock and you’d merely sacrifice opportunity, which is much better than sacrificing investment capital.

Source: Immersion Is ‘Force-Feeding’ Its Way Towards Solid Growth

Rather than run away from the sector like the masses were doing, I instead suggested that it was a great time to buy quality stocks for a big discount and told you what types of companies to target.

I like it when I’m right! Back then, the rally was just brewing. Today, it’s in full swing and we’ve seen an enormous short-term rally in the small-cap area.

For example, Immersion (Nasdaq: IMMR) – one the companies in our Xcelerated Profits Report portfolio – has blasted up by 50% (from low to high) in just a three-week period. Let’s revisit the topic and see what you should be looking for in the sector today…

A Small-Cap Success Story

I must admit… when I wrote the original article on April 3, I did so with Immersion in mind. The reasons are quite simple:

• It has $138.1 million in cash on the books – $4.52 per share.
• Its business is growing at an impressive 30% rate per year.
• It has a massive competitive edge, owning over 700 patents.
• It boasts strong growth opportunities, independent of the slowing economy, because it’s in the right space at the right space at the right time.

But that’s just one company. The small-cap market is chock full of other “bargains” just like Immersion. The question is: How do you find them?

The Only Way To Succeed In The Small-Cap Jungle

The answer is clear-cut: Research, research, research. There is simply no substitute for it when it comes to small-cap stocks.

Given that even large-cap, blue-chip stocks can run into the kind of trouble that can cause shares to fall 50% or more overnight (and that’s with full disclosure, tons of information in the marketplace and lots of analyst coverage), you can see how daunting the small-cap world can be.

It’s one of the most volatility-prone sectors, so it’s something you have to get right, or risk getting your portfolio crushed.

But, the rewards of being in the right company at the right time can be immense. This brings me to another company in our portfolio…

Despite A Share Price Battering, This Firm Is Still A “No Brainer” Buy

Right off the bat, there are several compelling reasons to buy this stock:

• It’s a leader in its field, creator of a revolutionary technology that is helping to beat the world’s most deadly diseases.
• It’s selling rapidly all over the world and boasts an order backlog that would make many larger companies very envious.
• The company is buying back its stock.
• The stock is selling for a bargain-basement price.

It’s as close to a no-brainer as you can get – yet the shares are down, more than 60% from their highs. So what gives?

We’re well aware that company’s main problem is management credibility. This is a shame, since its technology is so successful – but it’s a fixable problem, which is why we haven’t cast the stock aside.

You could say that this is the proverbial “company that a monkey could run.” Trouble is, the current management team is very inexperienced at communicating with Wall Street and have done a poor job since the firm went public last year.

But this is where our opportunity lies…

Big Bucks From Small Caps… And The Time To Buy Is Now

Our research shows the market for the company’s product is enormous. The product is clearly the best in the class and is in high demand because of its revolutionary aspects.

This is what we do: We put in the legwork, visit companies, call the CEOs and CFOs, and conduct exhaustive analysis. So we don’t panic when others do because we have faith in our research and our analysts.

Simply put, there is still no better time than now to buy a lot of companies that have seen their share prices devastated by a combination of scared investors, a scary market, and misunderstood fundamentals.

You owe it to yourself to put in the extra effort to find these diamonds in the rough. And we’ll do our best to not only alert you to them, but also show how to trade them in any market.

Enjoy your weekend.

Karim Rahemtulla

P.S. Want the name of the company I just mentioned? While I can’t give to you here, as it would be unfair to our paying readers, you can do so very easily by clicking this link. Plus, for the cost of a decent dinner at your local bar, you can let us do all the legwork for you for the next 12 months and give you the specific, actionable stock picks and professional ways to invest in them that can help you accelerate your wealth faster than most regular investors.