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Microcap & Penny Stocks : TGL WHAAAAAAAT! Alerts, thoughts, discussion. -- Ignore unavailable to you. Want to Upgrade?

To: Laura E. who wrote (43726)	4/18/2000 10:09:00 AM
From: allii	Respond to of 150070

VCSYE up .12 for those holding

To: Laura E. who wrote (43726)	4/18/2000 10:21:00 AM
From: john	Read Replies (2) \| Respond to of 150070

Gloating anti-tech investors just blowing smoke by Rob Carrick - Tuesday, April 18, 2000 The massacre of technology stocks would be a lot easier to take if the only impact was a lot of wealth going up in smoke. Unfortunately, there's a much more obnoxious problem. It's all the gloating by those investment types who think they've been vindicated in their belief that investing in tech stocks is a game for suckers. You know the ones. They're the brokers, financial advisers and money managers who kept their clients safely quarantined from all those nasty technology stocks over the past year. Maybe a little BCE or Nortel Networks, but that's it. If you were a client, you missed the tech selloff of the past few weeks, but also the far more intense tech rally that preceded it. You won't hear much about this discrepancy from the tech naysayers, though. For these people, the reasons not to invest in the technology sector came down to a belief that the tech-stock rally was a freakish bubble that begged not to be pricked but harpooned. Some of the dimmer bulbs out there kept going on about tulips, as if an ill-fated investing craze from a million years ago had anything to say about Internet stocks. Others suggested the tech rally was some kind of a Ponzi scheme, a reference to an old-time con artist (not the guy on Happy Days). As a commentary on the tech scene, Mr. Ponzi is more relevant than tulips, but only by the width of a fibre-optic strand. Hearing the anti-tech crowd talk, it was as if the very idea of owning technology stocks was so ludicrous, such idiotic folly, that anyone who did deserved to have their entire investment fall to zero. Now that tech stocks are being flayed, there's a sweet feeling of justification in this camp. Ah, the ignorance. The worst part of it is an apparent assumption that tech stocks are all of a kind, that Cisco and Nortel and JDS Uniphase and Intel are on the same plane as all the riffraff that truly did appreciate to idiotic levels. The correct way to think of Cisco, Nortel et al is as tech blue chips, not much different than banks, merchandisers and manufacturers. These are essential stocks that investors and money managers will flock to for the foreseeable future. The beauty of the tech sector is that there's another layer somewhere below these companies that will supply the next generation of technology giants. The huge ups and downs of the past six months are just the market's way of guessing which companies will make it. Yes, investors got carried away beyond all reason. It happens. Some tech bashers talk as if technology is a cyclical sector, like oil or base metals. In this view, tech stocks have had a great run and now they have to be beaten to a pulp. You know the drill if you own resource stocks. Technology stocks are certainly on the outs with investors right now, but it's difficult to see the cyclicality of the niches in which many of these companies operate. Unless, of course, you're a Luddite and think the Internet is a fad. Some of the anti-tech talk is smoke blown by advisers and money managers trying to obscure the fact that they made the wrong call in avoiding the technology world. If you weren't in tech over the past year, making money in stocks was a struggle. Now, with tech stocks tumbling, it might seem as if no techs was a good strategy. It wasn't, and anyone who says so is a smoke blower. Say you bought into the country's largest technology mutual fund, Investors Global Science and Technology, at the end of March, 1999. Back then, the value of each unit in the fund was $13.74. That compares with $24.90 at the end of last week, which is good enough for a robust 81-per-cent return. And what if you bought in at the beginning of the year? Then you were down about 3.6 per cent at the end of last week. That's no great disaster, especially if you were sensible enough to have limited pure technology exposure in your portfolio to somewhere around 10 per cent or less. For the sake of balance, it has to be pointed out that there was entirely too much hyperbole on the pro-technology side of things. Some analysts kept "buy" ratings on stocks that had risen by a few hundred per cent on nothing more than froth, and investors continued to listen up and buy right to the very end. It's not uncommon right now to hear investment pros talk about a flight to quality, a move to "real companies" from those poseur technology firms. If you got carried away with technology, then adding solid blue chips to your portfolio makes perfect sense, particularly if they pay a dividend. Just remember one thing. There is quality in technology as much as anywhere else. As for those who don't grasp this, I just hope they're not managing any of my money. Comments and suggestions are welcomed at rcarrick@globeandmail.ca