Ed:
I won't disagree that the risk is higher in small tech stocks (and I have a lower bank account to prove it). Certainly, many of the high-flying small players have come crashing down, some with significantly reduced future prospects. But this can happen to larger tech stocks too. Look at Compaq or even IBM from a few years ago. Look at the disk drive makers. Look at 3COM. Look at Cabletron, which was close to Cisco for a while.
Let's not forget that Cisco, Microsoft, Dell, AOL and Intel were all small-tech stocks at one point. They are all hundreds of times higher than they were back then. But, none of them will ever be hundreds of times higher than they are today (unless you believe in $10 trillion companies).
I would also think that a major global slowdown could affect larger companies as much or more than smaller companies. Small companies have the ability to change course more quickly.
Here's another smaller tech that has been beaten down dramatically: Symantec. Growing at 20+ percent a year, expected to earn $1.70 in 1998, with $4 a share in cash. $600M in annual revenues. Big name products like Norton Utilities, Norton Antivirus, pcAnywhere, WinFax Pro, ACT, Visual Cafe.
It closed today at 16 3/8, 50 percent off its high of a few months ago. |
