Telemarker, thanks for the post. I think the best thing about these threads is that you get so many great perspectives and yours is very valuable.
<<Capital markets have seen many revolutionary technologies enter economy and our lives. Ongoing innovations, refinements, and improvements in respect to these technologies have not necessarily equated to entrepreneurial enrichment. The financial models have everything to do with how well business owners fare.
IMO, highly informed investors who've done their research and reached solid understandings of the businesses, their technologies and markets can and will find superior investment opportunities. >>
I think that quote from your post illustrates the difference between investing on the basis of short term trends and investing on the basis of long term fundamentals. I would like to invest in companies with good short term trends (impossible in tech right now?) AND I would like those companies to have solid long term fundamentals.
The problem I see with large cap tech stocks right now is that the demand for equities created by the boomer money coming into the market went disproportionately, I believe, to large cap techs. Those were the stocks that had star quality, that had the volume and liquidity to accept billions of dollars of investment and allow that money to move semi-freely in and out of those companies ,and those were the companies that were seen as safer havens for investment than smaller companies with better growth prospects and better values.
The high multiples for the large cap techs were not mirrored in many of the smaller cap tech companies. I don't think the difference in multiples was justified in terms of risk, as I stated, I think it was a product of the investment limitations of the big institutional investors.
I would think that we should be looking at large caps as good buys at the bottom (which hopefully we can help each other in predicting) but also be looking for good smaller cap techs which fit telemarker's general description of "superior investment opportunities." I think that this would help balance out a portflio in tech. The large caps may well continue to demand a premium beyond their comparative value but I think that long term there are some good small caps that are below the radar of the large institutional investors and that offer good value.
I offer some names that I have followed. You should be warned that since I decided the mrkt was on a downward cycle in techs, I have not done any careful research on these companies, not that my research is that careful anyway. gg
KOPN and TFS are both small tech companies that work with small displays that are used in portable electronic equip. both have low debt, decent cash and earnings.
Gnss is a software company that designs chips for use in flat panel displays. Sagi is in the same business. they both have a good future when flat panels become cheaper and more are sold. Projections are that this will occur soon as the components for those displays come down in price and are more available. Gnss and sagi both have ample cash. Gnss is profitable and sagi is nearly there although any tech slowdown will affect them both.
Immr and vlnc are two flyers for those that like to elephant hunt and aren't worried about missing and losing money if there is possibly a good reward at the end. Vlnc is a battery company that has patented some new designs and compounds that will, if you can believe the company, result in greatly increased recharge cycles, power storage and lighter weight, along with shorter charge times. The downside is that there are probably manufacturing kinks in mass producing the batteries, that have to be solved and that the company has had to dilute in order to raise money and may have to again. Immr is a company that has patented sensory feedback technology that is used for games and training and could be used for many other applications.
For what it's worth, I also agree with telemarker that: <<. The universal consensus that inflation has gone the way of the dinosaurs is also troubling to me in that the enemy's attacks are often most successful when nobody is watching.>> for those that think the cpi report of today was an anomoly, ask yourselves what will happen to the markets next time around if those numbers are confirmed? On the question of "when?" I think that unless you are a good technician (like jimp) and have lots of the house money to play (like jimp gg) it is a minefield. Ed |
