American Spirit: <<Do your due diligence?>>
I have. Here are the year-to-date (YTD) results for your favorites and the non-PC chip stocks that I have suggested that investors establish positions in during this mini-correction:
LU: (-8.16%)
UIS: (-17.19%)
IBM: + 1.00%
LOR: (-50%)
Non-PC chip stocks: ADI +62.3% AMCC +109%; BRCM +52.8%; CNXT +19%; LSI +143.8%; PMCS +162.5%; QLGC +94.4%; RFMD +113.2%;
XLNX +63%.
Incidentally, your analogy comparing UIS, IBM, LOR and LU to CIEN, QCOM, COMS, and ORCL is specious. CIEN was depressed after unfavorable fallout from a failed merger with TLAB and loss of a large contract with AT & T; their cutting-edge fiberoptic technology was intact. QCOM was undervalued because of uncertainty over long-standing litigation with Ericcson that had dragged on over several years. It had been dead money over that stretch of time. COMS is still a dog -- it has only run on the strength of its IPO spinoff of its Palm unit. The one exception is ORCL -- this is a company that truly re-invented itself in a rapid period of time. Given Larry Ellison's track record, ORCL's size, and its history of frequent earnings disappointments, I saw no hurry to jump on Oracle's bandwagon. My congratulations to investors that got into Oracle at $25-30 last year.
In contrast, LU, UIS, IBM are not market leaders nor do they have dominant market share in anything. NT is eating LU's lunch and will continue to do so. COMS is no match for CSCO, probably the best-managed tech company on this planet, etc. IBM is the Coke/Gillette of the large-cap tech world, unable to grow earnings above single-digits in recent years.
My point is simple: instead of wasting money betting on unlikely turnarounds, one's money will be treated better by investing in companies with dominant or significant market share in sectors with outstanding growth prospects and demand (non-PC chips, fiberoptic telecommunications, internet infrastructure, B2B software/enabling companies).
While investing in one or two of these underperforming stocks might be worth considering between May through mid-October, when the NASDAQ and high-flyers are at risk, I am not about to make these laggards a fixture in my portfolio.
The results speak for themselves. |
