Philip,
Two quick thoughts on INTC, CSCO, MSFT
1) I think looking for "long-term strong buys" (i.e. ten years or so)
in tech stocks is a little like hunting tigers with a baseball bat.
You might get the occasional tiger but you are also likely to lose
large chunks of flesh from time to time.
Technology just changes too fast, and any of these companies
could be tossed off the throne very quickly. Ten years ago I was
using an Apple II! I'm not
saying become a trader, I'm just saying the time frame for
tech stocks should be shorter than, say, insurance companies,
and your trigger finger a little itchier.
2) Everybody knows the current tremendous position
these occupy. Doesn't this bother you? Intel in particular is at record valuation levels, and market cap is pushing something like
one of the largest five publicly traded companies in the world.
Hard to expect superior capital appreciation from something like
that.
Point is, everyone wants to own these stocks. Valuations
are lofty as a result, that has to be a drag on your
investment. You should have bought INTC at 50 in January, not
now.
For a long-term suggestion, look at AIG. Very consistent growth,
good international prospects, well-run, low expenses. Valuation
is a little rich on a historical basis now, I believe.
--joel
p.s. I think I know the study you are referring too. Didn't
it show something like a 1.5% point annualized difference in return
over fifty years? Isn't 1.5% annualized for fifty years about a factor of two? And I wonder what would happen if you compared worst days in
five-year period vs. best. |
