Get ready to buy stocks. The summer/fall swoon that I expected is in full bloom and is creating reasonable long investment opportunities. Consensus investment strategy, whether bullish or not, currently centers on the theme of "high quality" stocks: Take your lumps in the speculative junk, and invest the proceeds in name-brand shares with reasonable valuations and dividend yields. Since I tend to avoid the consensus, I am looking at an investment concept completely different from that theme. Now might be the time to start speculating again!

Don't get me wrong. The recent pullback has brought many stocks down to reasonable valuation levels. Most stocks are more attractive than they have been in years. Valuations, which prompted

my May call to sell all types of stocks, have returned to fair levels from overvalued ones in the spring. For example, the Value Line Index has a median price-to-earnings ratio of 15, down from its all-time high of 21. Combined with a massive rally in government bonds, lower stock valuations should support a meaningful rally in the seasonally strong fourth quarter.

While some large-cap shares have become very cheap, like

EDS

(EDS)

at $14,

Honeywell

(HON) - Get Report

at $23 or

Citigroup

(C) - Get Report

at $29, most name-brand stocks appear fairly, not compellingly, priced.

Better absolute valuations exist in the small- and mid-cap sections of the stock market. I like most of the names in this sector that I have recommended in the past year, including those I sold in the spring. Many decent businesses with respectable management teams and strong balance sheets can be purchased at 12 times price-to-earnings ratios or lower.

Companies such as

Liz Claiborne

(LIZ)

(11 times),

Republic Services

(RSG) - Get Report

(12 times),

Monaco Coach

(MNC)

(nine times),

Washington Mutual

(WM) - Get Report

(eight times),

Heatlh Net

(HNT)

(10 times) and

Black & Decker

(BDK)

(12 times) represent excellent long-term value with acceptable risk profiles. I will add to my positions here over the next month.

But what has me really excited is the opportunity to speculate in small concept stocks and micro-cap tech turnaround ideas. Just as the market overestimated growth and profit outlook in 1999-2000 for many of these companies, it might just be too pessimistic on their recovery prospects today.

Over the next four weeks I expect to build 2% to 4% positions in micro-caps such as

Artesyn Technologies

(ATSN)

($1.60),

MRV Communications

(MRVC)

(85 cents),

Quantum

(DSS) - Get Report

($2.40),

SeeBeyond Technology

(SBYN)

($1.45),

Epix Medical

(EPIX) - Get Report

($4.50),

Abiomed

(ABMD) - Get Report

($4),

Gundle Environmental

(GSE)

($7.85) and

SL Industries

(SL)

($5.05).

While many of these businesses are currently unprofitable, the stocks are compellingly cheap, should the concept work or the turnaround occur.

I do not have space in this column to develop each spec idea I like, but let me share a couple of them. Artesyn, a leading maker of power supplies for tech and telecom, trades for half of book value and one-sixth of revenues. Two publicly traded competitors, Power One and Vicor, trade for one times and two times sales, respectively. My best guess at normalized profits is a range of 45 cents to 65 cents per share. In a few years, if the company is still independent, the stock could be $6 to $10 per share on those earnings.

Gundle Environmental is the dominant provider of plastic liner systems for waste and water applications in areas such as landfills, mines and liquid waste applications. The company purchased its closest competitor for less than nothing and now maintains a 50% market share. Gundle should earn north of $1 this year and $1.35 next year as consolidation benefits flow. At $7.70, the shares trade for three times earnings before interest, taxes, depreciation and amortization, or EBITDA, while the company generates significant free cash and has a debt-free balance sheet.

Abiomed has developed an artificial heart that just might work. Its current price is supported by the company's cash position and existing profitable BVS product line. I do not know how to handicap the commercial success of the AbioCor, but should it occur, the stock will be a huge winner. Every few thousand units would represent $1 per share in profits. They have at least one happy customer, Tom Christerson, who would have died last summer if not for the AbioCor.

This speculation game is not for everyone and not for the major part of one's portfolio. And performance could be dismal if the bear market continues. But successful speculation will generate significant returns when the market begins its next rally.

If you have a compelling speculation, I would love to hear about it. Please be realistic in your assumptions regarding revenues and margins. Remember, the new era (of stupidity) will not return in your investment lifetime. I am not interested in billion-dollar concepts, however successful they may seem. Nor am I interested in 15 times price/earnings ratio fixer-uppers. But very low price/sales ratio stocks that could be trading at three to five times profits a few years out seem worth a serious look, even if they are technology, telecom or biotech stocks.

I have expected a retest or new low since the August rally. I expect to cover my short hedges and become fully invested by November. I do not know precisely when or at what level the bottom will occur. I do know that I am tempted to purchase shares. Many investors are selling aggressive stocks to pay taxes, or facing losses from their investments in aggressive stocks. Exploit their short-term fear and irrationality. Investors really hungry to add to equity positions should purchase appetizer positions. Others should at least study the menu.

Robert Marcin is the principal of Marcin Asset Management, a private investment firm. Formerly, Marcin was a partner at Miller, Anderson & Sherrerd and a managing director at Morgan Stanley, where he managed the MAS Value fund (currently Morgan Stanley Institutional Value). At the time of publication, Marcin was long EDS, Liz Claiborne, Republic Services, Monaco Coach, Washington Mutual, Heatlh Net, Artesyn Technologies, MRV Communications, Openwave, Quantum, SeeBeyond Technology, Epix Medical, Abiomed, Gundle Environmental and SL Industries, although positions may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Marcin appreciates your feedback and invites you to send it to

robert.marcin@thestreet.com.