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Is Tech Dead?

    Some investors would hold technology stocks at arms length while holding their nose with their other hand like they’d just picked up some dead animal on a hot day. 

    Yes, the performance of tech stocks has stunk over the past handful of months, but do technology stocks as a whole stink and will they continue to stink?  Some pundits say tech will never come back.  Volatility in the tech sector is certainly much greater than in any other sector.  Some tech stocks will be de-listed by NASDAQ officials because the share price will remain below $1 too long, and some may close their doors.  But, many of these stocks will be trading at 10 times their current prices just a few years from now.  If you take a macro view of the world we live in and the future you will see some very interesting opportunities and the past year’s stock market will just be a small bump in the road.

     Looking forward we will continue to see technology, and the companies that develop it grow at a very fast pace.  Although the demand for traditional desktop computers will be soft, manufacturers will continue to develop faster chips and these faster computers will be needed and purchased by users.  The wireless Internet craze, whether implemented through PDA-type devices from the likes of Palm or Handspring, or on new generation web-enabled cell phones, will grow at a quantum rate.  We have probably only seen the tip of the iceberg when it comes to wireless Internet.  Digital cameras that use microprocessors and increasing amounts of memory will continue to gain market share against traditional film cameras.  Companies will continue to need Network Attached Storage (NAS) and every other type of storage imaginable as they create larger, more graphically intense web sites and then try to keep track of the buying habits of their customers.   Those same companies will cheer every time there is an opportunity to increase the rate they can send information across their office network, even if it means throwing out most of what they currently own and replacing it with new equipment.   And the same will be true with an opportunity to speed up the rate at which their customers can communicate with their web site.  New software releases that increase efficiency and provide easier access to more bells and whistles will soon get a purchaser’s signature on the bottom of a Purchase Order.  Chip manufacturers will want to take advantage of increased efficiencies found in $1 billion state-of-the -art manufacturing equipment.  No matter what the economy or markets do, there will be new technologies, and buyers of new technology.   The most rapid growth in corporate America will be in the tech sector, and the greatest likelihood for stock price appreciation will be in technology companies with good products, good management, and good financial fundamentals.
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