papa@pollux.usc.edu (Marco Papa) (07/02/89)
In article <1989Jul1.231014.5340@utstat.uucp> davids@utdelury.toronto.edu (David Scollnik) writes: >In article <18203@usc.edu> papa@pollux.usc.edu (Marco Papa) suggests ... >) You don't need a money manager to believe that this is certainly the >) time to stay away from "technology" stocks. >) >) -- Marco Papa 'Doc' > >Au Contraire, my dear Sir !!! I guess you disagree with most of the US money managers and the WSJ which both recommend the same as I said. >If one is seeking long term portfolio gains, now may well be the ^^^^^^^^^^^^^^^^^^^^^^^^^ >time to invest ... Indeed, if North American high tech companies >are not performing admirably on the exchanges, this fact may well >promote takeover bids on the part of overseas ( ie. japanese ) >investors. Long term portfolio gains are obtained with solid growth and income companies. Sadly most 'technology' companies, at this point in time, are not experiencing neither solid grown or income, but instead declining sales. Technology stocks and mutual funds have been the WORST performers for the past 10-12 months with more bad new on the horizon (pick up any of the past 5 months issues of Money Magazine or ask your personal broker about it). Forget about Japanese takeovers. They have tried (remember Fairchild?) and the US Goverment did not let them do it. Things are not going to change in that respect. >In turn, said takeover bids may well buoy up the stock of the >aforementioned "failing" North American high tech company >( especially in the case of a smaller company ). Corporate takeovers (LBO) buoy up stocks of "sane" companies whose stock is undervalued (see Paramount vs. Time). It is very rare that the stock of a non profitable company increases substantially as a result of a buyout. Right now, most of the technology companies are showing "declining" sales and earnings. Betting on possible corporate takeovers is not for the faint of heart, and definitely not for the average individual stock investor. >I'm not just talking through my hat, either ... this phenomenon >has occurred several times on the Toronto Stock Exchange in the >last few months ( and no doubt on the Dow Jones and other exchanges, >as well ). Yes, c'mon, you ARE talking through your hat. I guess you don't follow the US market that much. LBOs happen almost every day in the US. Just pick a up a copy of the WSJ. ANY COPY! >Of course, this is not to say that investment in high tech firms >is not "risky" ... but then again, it usually always is !! Interesting. Your conclusion is exactly my premise. RIGHT NOW, if you want to take more risk than normal, buy technology stocks. And good luck :-) -- Marco Papa 'Doc' -=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-= uucp:...!pollux!papa BIX:papa ARPAnet:pollux!papa@oberon.usc.edu "There's Alpha, Beta, Gamma, Diga and Caligari!" -- Rick Unland -=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=