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Technology Stocks : Son of SAN - Storage Networking Technologies -- Ignore unavailable to you. Want to Upgrade?

To: trendmastr who wrote (2445)	11/15/2000 10:12:34 PM
From: trendmastr	Respond to of 4808

from briefing.com Trader's Edge: Waiting On Tech 15-Nov-00 11:22 ET Many investors are beginning to lose patience waiting on tech to break out of its almost year-long funk. This analyst is one of them. For the better part of the year, the tech world has been a hazardous place for investors to reside. However, as a result of the volatility associated with the daily bull/bear joust, trading opportunities have been plentiful. In fact, of the individuals I speak with, traders seem to be the only ones that have consistently made money this year. Nevertheless, the depression currently being experienced in tech is even beginning to make these market participants jittery. Few seem to think tech is ready to rollover, but there is fear that we are on the verge of a return to fundamentals driven investing. With the major indices submerged this year (Nasdaq -23%, S&P 500 -6%, Dow -7%), the pressure has been taken off mutual fund managers to chase gains. A 100% cash position has been sufficient to top most benchmarks this year, making those with the most conservative portfolio the market's recognized pundits in 2000. After the abysmal year experienced by most pure tech funds, it is quite possible that the managers who put up 7% returns in 2000 will be rewarded in 2001 with heavy capital inflows. Preservation of capital could prove to be the mandate of individual investors in the next calendar year. May sound overly bearish, but it is a scenario a tech investor must be prepared to face. If capital continues to flow away from tech, many of the issues that now appear to be compelling long-term investment opportunities will find their shares only weakening further. Technology stocks have been a great wealth creation vehicle. But in this what-have-you-done-for-me-lately market, the fickle investing public would turn its back on this sector quicker than you can say fund redemption. Again, we are not writing an obituary for the technology opportunity. While the sector may fall out of favor with the masses, it will still be one of the few games in town for growth investors and traders. When tech does come back into vogue, storage and fiber optics stocks will be the areas that aggressive investors first place their chips. These groups are the final frontiers of the current technology landscape, where investors can find both earnings and the level of growth required to justify extreme valuations. Being a tech investor at this time requires patience, as capital (both individual and institutional) does not yet feel comfortable returning to the market. The powder is being kept dry until some of the clouds lift. As a growth investor, this analyst remains committed to tech. At the same time, I am willing to admit that this sector is currently working hard to shake out investors and traders alike. It doesn't help matters that the most attractive names continue to flood the market with secondary offerings, significantly altering the intraday trading characteristics of the stocks. While 5% to 10% returns could prove the norm for the broader markets over the next several years, this analyst believes that triple-digit gains will continue to be available to the agile and informed. Our view is that the year 2001 will mark the return of the theme opportunity. Those individuals who know their groups from top to bottom will be the biggest beneficiaries. A more selective and conservative capital market should also create an opportunity for IPO investors, as top-tier deals experience less of an initial pop, creating an opportunity to participate in extremely attractive long-term investments. Many quality 2nd-tier deals will quickly fall below their offering prices, offering value to those investors willing to sacrifice liquidity over the near term.