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Go Long Tech

December 23, 2010

I don’t always fade the Mad Hedge Fund Trader like I did recently in bonds.  Right now, Tech stocks are poised for a huge, huge rally.  The MHFT is a sharp guy, and I was surprised to see his top down treatment from such high level in this article.   I agree with all of it.

But I think the argument for Tech Stocks Right Now! in massive size is very compelling.

  1. Businesses have put off tech spending for a few years – and this may as well be 50 years for a normal industry.   Tech decays in usefulness quickly.
  2. Tech spending is the first to get cut in a downturn, because you can put it off for a bit.  However, it comes back on line quickly if there is a recovery, because it is cheap.
  3. There are many new business focused software techologies coming on line next year that will be staggeringly useful for businesses.

The business depreciation acceleration is coming at a perfect time for business spending, but it will have an outsized impact on tech spending within the business community.  It will have a particularly strong impact on tech spending this year.  In the past, current spending gooses tech stocks enormously.

Go long, long, long Tech!

 

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