UPDATE: The economy will slow down without any doubt but I believe that it will be a soft landing as the Fed will intervene because Mr. Greenspan is being prodded. During this slowdown period, the prices of most tech stocks will fall as their growth slows down.
However, the CAVEAT is that those tech companies with strong management and financial and business backgrounds, with historical earnings stability when things improve they the first to recover and stay as investments when the economy grows at a stable and sustainable pace. If there is any chance for rebounce it will be with the ONLY tech leaders in their sector like JDSU/GLW/NT/CSCO (networking sector),SUNW/EMC / HWP(server applicance sector), ADBE/ORCL/MSFT/SEBL (software sector), NOK, TLAB, JDSU,TLGD (telecom sector), INTC/AMCC/PMCS/VTSS/CREE/QLGC (semi sector) SANM in the Electrical Misc Sector, NEWP in the Scientific Instrument Sector will be left in a "Survival of the Fittest" challenge for longevity.
Institutions, predictably, will also setting the trend after which investors will follow suit and by buying relaying a new foundation for these companies. In these hard times, words like Safe, Predictable, Stability have renewed meaning and our old Hi-Flying unproven growth and glamour stocks like EPNY, NTIQ, MCDT, SCMR will lose their luster. We will enjoy these on bounces of course, but in the long haul its the leaders that count. |
