“I don’t know about you, but I am enjoying watching a good old-fashioned panic. Smart investors should be looking to buy tech stocks at bargain basement prices as of now,” John C. Dvorak opines for MarketWatch. “It’s bottom-feeding time. But where is the bottom? Long-term investors who subscribe to “hold forever” philosophies should have started to buy once the Dow cracked 9,000 and just keep buying along the bottom. The old term for this was ‘accumulate,’ something you never hear any more.”
“The most interesting sector right now, at least to me, is technology. Everyone thinks it stinks, despite its ability to weather all economic circumstance. Also, consider the fact is the whole world is technology dependent and cannot get off the tech treadmill. It’s a good business,” Dvorak writes. “Tech stocks may now be looked at as food on the bottom of the floor. It’s not rotting and it’s relatively free. When a money-making company in a thriving industry growing at 10% or more a year with no end in sight has a P/E ratio of 4, then I’m not seeing this as an excuse to sell rather than buy.”
“The tech sell-off in particular, which was earmarked by Apple Inc. dropping below $100 a share, coincided with the jobless numbers reported on Oct.4 when 159,000 people were added t o the jobless cache,” Dvorak writes. “To tech investors and financial reporters, this translated to 159,000 people who would not buy a third iPod and a new computer for the family. The result of this tragedy would be the demise of all things tech, they reasoned. So the sector went into the tank along with the financials and the rest of the market. Of course it was just an excuse to get to the sidelines fast.”
“A few months from now, you’ll be hearing — on CNBC and elsewhere — the words, ‘And the tech rally continues today…’ with all sorts of analysis and bewilderment,” Dvorak writes.
Full article here.
Let’s hope the bloated gas bag is right for a change. It’s rare and hard to believe, but Dvorak getting it right has actually happened in the past:
• Dvorak: Microsoft’s ‘Mojave’ stunt humiliates ignorant users and itself – August 01, 2008
• Dvorak: ‘I advise everybody to buy a Macintosh because Apple products are the easiest to use’ – February 09, 2008
• Even a blind squirrel: John Dvorak finally gets something right about Apple – January 29, 2008
• Dvorak finally uses a Mac: recommends Mac to friends and neighbors – July 26, 2007
• Dvorak: Apple CEO Steve Jobs is dead right about DRM – February 07, 2007
• Dvorak: ‘If anything is doomed to failure, it’s Microsoft’s Zune’ – November 14, 2006
• Dvorak: record companies’ biggest concern about Apple’s iTunes is clear and accountable bookkeeping – September 29, 2005