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Technology Stocks : High Growth Techstocks for 1998 -- Ignore unavailable to you. Want to Upgrade?

To: Grantcw who wrote (513)	5/2/1998 1:50:00 PM
From: White Shoes	Read Replies (1) \| Respond to of 598

Grant, I can sort of see what you are up to. I certainly don't have a handle on more than a few fields...and our portfolio doesn't necessarily have a lot of what you are looking for...if I had to do it over again I would have focused more on slightly larger companies. In any case, some picks for leaders in new huge markets might be obvious and indeed already fully valued by the market. For example in the area of the internet and the 'portal' YHOO is the one. Have you read the column (you can link to it from the main SI page) in the Internet Financial Connection saying that YHOO is the only hot internet stock that really makes sense to invest in? I somewhat agree, and for this reason I dumped XCIT because a large premium should be due the market leader but not so with #2 or #3 perhaps. I guess the primary fields that I have been featuring in the portfolio have to do with electronic commerce. In this area, all of IVIAF, IFM.TO, NSCP, CKFR are worth watching. There will be others but of course you have to watch it because the stock promoters know we are looking for these things...so lots of hot stocks claiming to have electronic commerce by the tail will emerge to fleece the hopeful optimists out there. I still think OTEXF has a good future in the intranet biz and long term a merger with NSCP makes sense...company probably fully valued now but looking good, able to turn a small profit...hasn't made the acquisition yet which was the reason for the large financing so we'll have to watch for that. I suspect there may be some bargains out there in fields with obvious potential like xDSL---but such fields have generally been disastrous for investors as getting a pure play has been hard and in such cases the premium was just too high. But I do wonder if WSTL mightn't be worth a hard look...although it needs to drop even more to be worth a speculative gamble...some people think they might have a big future, others think it's all over for WSTL. These folks at ACTC have some kind of Windows CE messaging announcement out...I would keep watching this ACTC story, they might yet pull off a success. I am very high on INSO. It is a much overlooked company. It is rather diversified but overall I would say that it could be a sleeper like YHOO turned out to be (no amount of hype would have been too much for YHOO). A rule I have stumbled on for tech stock investing is that so many of the companies people throw away good money on get killed by the commodification of their product. Quite the opposite for companies who help us organize and communicate and translate and think...all require technological advances to stay competitive but none can be killed by a cheaper chip from a competitor. Maybe this is why AOL got to be such a great stock, because technical newbies want to belong to AOL's community. I happen to think that AOL's community has already been superseded by the real internet and all of the other communities out there...eventually YHOO, MSFT, TV networks, and the utility companies will give AOL a run for its money. I also think GNET and others like it bear watching. Quite simply, those who are able to see the megatrends in the media-internet-electronic-selling-portal world early on and get a lead on the competition (buying SI was such a great coup) will be very important companies tomorrow...if they aren't bought out by media giants like Disney, Fox, etc. etc. Are some of these companies stock promos? Sure. But certainly worth watching. The overarching theme to all these picks is definitely sound management, market position, and the likelihood of being caught in them middle of a new industry standard. For the most part all of the minute discussions about who has a better technological mousetrap are lost on me, but not knowing anything about technology can actually save you a lot of money in the stock market. If you can't understand it, why buy it? If I had a nickel for every time some sharp technology expert tried to sell me on some 'new process for formatting images' or whatever, I'd be the richest man on SI. My own investing philosophy is moving towards things I understand and larger companies which I consider 'safer'. That's why I would personally include companies like Fedex and maybe a few Lynch-type retailing stocks that I have discovered, in my own portfolio. So I try to understand tech stocks mostly for entertainment and educational purposes...maybe I'll make some real money off it when the next bull market comes around in the year 2015. What companies do you like? BTW I always forget to mention my old faithful, APPC American Power Conversion. Their market will continue to grow as clean power becomes more and more of an issue. Just as no one in 1923 would have predicted that people would begin drinking Coke for breakfast, I don't think we realize that companies like APCC will someday be able to convince both home and corporate customers to expand their thinking about power protection to extend to more and more protection for all of their sensitive electronics. Speaking of protection, if someone can invent The Club for notebook computers, I think we would have a winner. :) Can't say whether APCC's stock is overvalued or undervalued but point is again, debates on SI amongst engineers as to whether one of the smaller competitors has a better mousetrap are simply irrelevant. APPC is an industry leader if not the industry leader, and will therefore develop a good relationship with, especially, corporate customers. The brand is strong and the market should grow 25% per year for the foreseeable future.