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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Wyätt Gwyön who wrote (48157)	10/22/2001 5:38:31 AM
From: techreports	Read Replies (1) \| Respond to of 54805

"Suppose you're down 75%," says Jerry Tweddell, an investment adviser in Sonora, Calif. "Just to get back to even, it might take two decades of moderate stock-market returns. You'll have to double your money and then double it again." What to do? For many folks, the temptation is to stick with their battered technology holdings, hoping they will snap back. This isn't an unreasonable hope. Technology shares have high "betas," which means they tend to lose more than most stocks in a market decline, but they should outperform in bull markets. The problem is, the previous bull market's heroes are often left behind when stock prices revive. Indeed, technology issues took years to recover from the early 1980s tech-stock frenzy. "The next bull market will probably be led by companies you and I have never heard of," Mr. Tweddell predicts. Technology now accounts for about a fifth of the Standard & Poor's 500-stock index. If you have more than 20% of your stock portfolio in technology, "you've got to cut your weighting," argues Honolulu investment adviser Harry Kasanow. "Investors will be disappointed if they wait for tech to come back." And where are the facts or history to back this up? After the 1987 crash, did new companies lead the markets? Do these people even have a theory as to why this would happen? It's one thing to make a statement with no facts, but is a totally different one if you don't even provide a theory as to why this would happen. It's like saying I think the sky will turn red and provide no reasons why you think this. Why will investors be disappointed? Does this guy not see that irrational exuberance is till in some tech stocks and if we see any sign of technology recovering I think there will be a huge rally. I'm personally thinking that technology is not a good place to invest for a few reasons. 1) everyone wants to own the next Microsoft or Intel, which means more people focus on this sector 2) Technology companies generally receive higher multiples, however, the rapid change in the tech sector increases risk, yet investors ignore these risks. 3) My knowledge of technology isn't that great (i would say i'm in a competitive disadvantage), but I'm still very interested in technology in general and know more about technology than any other sector. Small caps are interesting in that they don't get all the attention and hype (which creates demand for the stock). The major brokerage houses don't really focus on small caps, instead they look to push big caps that are very liquid and allows them to make money. Mutual funds as well probably ignore small caps. It's harder to do research on small caps, but that can be a good thing. It drives away many individual investors who spend more time focusing on more popular stocks (such as qualcomm, ebay, siebel, emc, ect..) If it wasn't for the huge amount of information on JDS Uniphase on the internet, I don't think I would have even considered investing in JDSU.