What Wall Street and Main Street Have in Common

03/11/2008 12:00 am EST

Focus: STOCKS

James Oberweis

Editor, The Oberweis Report

James Oberweis, editor of the Oberweis Report, says when Wall Street and Main Street suffer, it's time to buy-and he recommend two small growth stocks.

It has been a long time indeed since the Wall Street Man and the Common Man have had so much to talk about.

To be precise, the last time the Wall Street Man and the Common Man met in line at the unemployment office was in mid-2002, after the dot-com bust had crushed the investment banks and shaken technology firms alike. And interestingly, as it turns out, 2002 was a very good time to be buying stocks.

Historically, an unemployed Wall Street Man tends to coincide with a good time to buy stocks, though few appreciate the opportunity at the time. Layoffs on Wall Street are a sign of capitulation; layoffs occur AFTER a lousy stock market, not before.

Bad, ugly times are priced into the market. Fear of the future is what drives stocks lower and when the market is near the bottom, it doesn't usually feel like better times lie ahead. But when everyone is betting on bad times, even mediocre improvements can lead to powerful rallies.

The bottom line: leave no bills under your mattress. Now is the time to be aggressively buying small growth stocks. We may be somewhat early, but you will regret it if you miss it.

Sapient (Nasdaq: SAPE) is a global organization collaborating with companies to help them evolve and grow in today's dynamic market place. The company has two primary service groups-Sapient Interactive and Sapient Consulting-both of which advance businesses in the areas of marketing, business operations, and technology.

Sapient Consulting provides a unique approach to business and IT strategy, process design, testing, and outsourcing. Sapient Interactive is focused on taking creativity, strategy, and technology out of silos and developing a single blended approach to creating a powerful online brand experience for their clients.

In the company's latest reported fourth quarter, sales increased approximately 36% to
$155.0 million from $113.6 million in the fourth quarter of last year. Sapient reported earnings per share of 12 cents in the latest reported fourth quarter, [twice the six cents it earned] in the same quarter of last year. (It closed below $7 Monday-Editor.)

Virtual Radiologic (Nasdaq: VRAD) provides teleradiology solutions to radiology practices and medical centers throughout the United States. Utilizing proprietary workflow technology, Virtual Radiologic's predominantly US-based physicians perform preliminary and final read interpretations for emergent and non-emergent needs around the clock.

Virtual Radiologic's American Board of Radiology-certified radiologists are collectively licensed in all 50 states. Virtual Radiologic is Joint Commission-certified and serves hundreds of clients supporting more than 800 medical facilities. In the company's latest reported fourth quarter, sales increased approximately 41% to $22.9 million from the fourth quarter of last year.

Virtual Radiologic reported earnings per share of $.14 in the latest reported fourth quarter versus ten cents a share in the same quarter of last year. (It closed near 17.50 Monday-Editor.)

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