The technology sector has taken a beating since its heyday in 2000, but prices are up an impressive 84% from the lows of last November. Not a bad recovery from a situation which many thought marked the end of the world as we knew it. Just 16% more and the tech sector will have recovered all that it lost in last year's debacle, on top of posting 10% net annualized price gains since 1997. In contrast, the less-exciting consumer staples sector has registered price gains of only 3.7% annualized over the same period.
Stocks can be a wild and woolly ride at times, but they can also pay off handsomely if one has patience. Apple stock, for instance, has soared 144% from its January low of $78, and is only $10 below its all-time high of $200 at the end of 2007.
Scott, Nice call on Apple.
ReplyDeleteScott,
ReplyDeleteLooking at the world on the margin is so much fun.....everything looks sooooo good right now.
It is amazing how positive things look so long as you focus on the margin.
Thanks.
Yea great call on Apple. It is set to explode. Its about the only thing people are spending money on. iphones.
ReplyDeletetech has been the leader in this market, and will continue to lead the entire market higher.
Scott,
ReplyDeleteAs a supply sider, do you have any thoughts on sector selection in an inflationary environment?
I always viewed technology as benefitting in a deflationary environment (they held on while deflation hit home 1997-2000). Will technology correct if inflation escalates?
Thanks as always.
Russ
I'm not really very good at picking sectors. One thing that occurs to me is that if inflation really turns up, then the stocks with the most fixed-rate debt should be able to outperform. High inflation is a like a get-out-of-jail-free card for those with a lot of debt. By the same logic, stocks with little or no debt and lots of cash would be disadvantaged by lots of inflation. Commodity producers should do well, but they've already done very well, and gold is already very strongly bid.
ReplyDeleteThere are so many other factors to consider that I don't feel comfortable coming up with a sector of choice. Suggestions welcome.