Buy tech stocks now (3)
Bulls See Reason for Hope in Tech
Three years from the Nasdaq market's peak, there is new optimism about the stocks.
By Tom Petruno and Josh Friedman, LA Times Staff Writers
"The market is a game of choices. It's a game of relative earnings growth. And tech is starting to grow faster than the rest of the economy again," said Doug Foreman, chief of U.S. equities at Trust Co. of the West in Los Angeles.
He and other tech optimists believe that two years of cost-cutting by most companies in the sector should lead to significant profit gains if there is any sustained pickup in business capital spending. Tech bulls advise investors to look ahead, not behind.
"Most growth fund managers are underinvested in tech," Foreman said. "I think that means that when the stocks start to do better again, investors will have to increase their holdings."
Nick Calamos, manager of the Calamos Growth stock fund in Naperville, Ill., is another money manager who has become increasingly bullish on tech. "Even if the sector is not at the very bottom, it's time to start making those investments -- after all, you're not going to call the exact low," he said.
Investors shouldn't fear that technology has entered a long-term decline just because of the magnitude of the stocks' plunge from the peaks of the bubble era, Calamos said. "This is not a secular decline. It's a cyclical downturn in the economy and the market," he said.
In recent months Calamos has shifted his fund away from consumer-oriented companies and added stocks that can benefit from a pickup in business capital spending. For example, the fund has added computer networking giant Cisco, wireless technology company Qualcomm Inc. and anti-virus software maker Symantec Corp., he said.
Tech stock advocates say they aren't simply wishing and praying that the sector's fundamentals improve. A turnaround began for many companies in the second half of last year, and is sure to gain speed in the next few years because many tech users will have little choice but to upgrade their systems and devices, the bullish argument goes.
latimes.com |
