"if not into the storm, then why, and if not into technology, then where, if anywhere."
This sounds like the mantra of a heavy weather cowboy sailor rather than a prudent investor.
Do you think the return in tech will really justify the risk of sailing into the storm? Tech is still the most overhyped sector of the market. I had an old professor (Bob Sobel, a stock market historian) in a securities analysis class 30 years ago teach me that every bull market ends with an unhealthy preoccupation with the latest tech fad and we will know it by the plethora of IPOs with very odd suffixes in their names and very strange sounding business descriptions. This latest bull market has certainly gone by the same old plan. I think it is fitting that perhaps the savviest investor of the last 50 years (Warren Buffett) was distinguished by his very healthy distaste for technology for all the right reasons. I don't need to sell anyone an investment theme or mantra, but simply surf on any valuation disparities that I am able to deduce between perception and reality. I apply bottom-up valuation screens as well as top-down sector rotation strategies. I believe that it may be way early to be getting more than ankle deep in yesterday's niftiest sector. I don't even know what tech means anymore, except possibly a business plan that needs to be rewritten every three months. Why this unhealthy fascination with bleeding edges when so many other sectors look so intrinsically healthy, such as pharmaceuticals for example? I've already got myself enough silicon trinkets to last me for awhile, but I keep putting together pillboxes for my mom, who is now living with me again after all these years, and the last time I checked this 85 year old woman is getting 15 different pills per day. So if you want to sell me on an investment theme based on inevitable trends or everyday reality, I'd sooner buy pharm than silicon or telecom. And yes, boys and girls, the barriers to entry are just stagerring. Now I see pharms as tech plays (same R&D/sales ratios) with some very attractive defensive and demographic features. Don't ask me for any specific names yet though, since I've just begun to scout this sector.
If you do want to play telecom, then at least look at IDT, where you have alot of cash for survivability, and a CEO who is as clever as they come. see Barrons this week |
