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In this exclusive article Clem Chambers, Forbes columnist and author of the Amazon No.1 investing bestseller 101 Ways to Pick Stock Market Winners discusses 3 tech stocks to look for your investment portfolio.
Today two centuries later technology companies are still darlings.The private investor loves tech stocks. They have done so forever. In the old days they were railway stocks, then they were auto stocks, then radio, then electronics then… well, you get the picture.
Google.
Google owns the internet, at least on the desktop whilst owning much of the mobile market through its’ android operating system. With a turnover of around $50 billion, Google is today what Microsoft was yesterday, a massive monopoly with the market by the throat. Its’ only limit is the government kicking back but it seems that Google has them by the throat too. While Google escapes attack from regulators, no one will stop it dominating the tech worlds in becoming the first trillion dollar company. Will anyone stop Google’s “Skynet” reality? If you think no, you should be long and if things turn sour for Google and its relationship with the developed world’s governments, you should go short. Perhaps judgement day will come.
Facebook.
Facebook is massive. As far as the internet goes it’s the only operation that can compete with Google in terms of reach and scale. However, it doesn’t have a legion of PH math professors drilling to crush all competition. As such, it’s not generating anything like as much sales from its giant web traffic. That hasn’t stopped the company getting a massive valuation, the sort of stock price that only internet companies enjoy.
That’s not to say the market will not fall further in love with it because apart from Google, Facebook is the virtual life.
Unlike Google, Facebook is not unbound and will zoom and crash. As such traders need to try and ride those rollercoaster curves, buying the dips and selling the rallies.
Tesla.
When a company can do no wrong its share price will rocket. If it takes on the mantel of the markets darling then no measurements of its financials will bear any resemblance to its stock price. These stocks come along every 3-5 years. Once they rise into the stock market heavens nothing seems to bring them back to earth for a long time.
Tesla is such a new born supernova. You can buy and wait for further miracles or you can try and ride the whiplash moves that are sure to follow waves of great news.
Perhaps Tesla will be the next Ford, but don’t tell shareholders it’s almost worth the same as Ford .
Tech stocks are the game everyone wants to play. They always have and fortunes have been won and lost playing.
If you can’t resist them just remember, no one ever spoiled a good stock ramp by reminding people of the facts of reality. So if you think the market is heading for a cliff with one of the darlings of technology, just jump off. There is always another tech darling sprouting somewhere to make everyone’s dreams come true – or at least promise to.
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