Is Tech Still a Safe Haven?

After being seen as a subprime safe haven for some time, tech has newly become an investor wasteland. Cisco (CSCO), Sun (JAVA) and Qualcomm (QCOM) have all disappointed to greater or lesser disagrees, and investors have taken the whole group out back and shot 'em.

Consider the following chart showing some sample group performance from September 1st until now, with and without the current tech wreck week:

The entire above group had turned in positive performance numbers from September 1st until the beginning of last week. You could have thrown a dart at tech and pretty much felt like you had magically found a subprime safe haven. Last week, however the wheels fells off, with a few disappointments causing investors to become pissed at the bunch, taking it down an average of 10% on the week.

So, which is it? Is tech a safe haven, or is tech as subprime screwy as the financial sector? While no sector is entirely safe -- perfect safety is for people who keep their money out of the stock market -- the reality is that the tech as subprime safe haven theme was always a gross oversimplification. There are good tech stocks, and there are poor tech stocks, and there are those that were taken up by a rising tide. I still like Google (GOOG), Research in Motion (RIMM), VMware (VMW), and Microsoft (MSFT) in here, and while I'm somewhat uneasy with (AAPL) AAPL -- I think the newsflow could be dodgy from now through early next year -- I have a hard time hating the group.

Comments

[Jon T:]

Uneasy about Apple? Why?

Oh, the terrible products that aren't selling. And the lack of innovation...

Tough call hey? Not.

2007 Nov 11 06:19 PM

[jonreagan:]

While it's normal to ascribe some downward movements after a run-up to "profit-taking", the trashing of GOOG, AAPL, and RIMM in the last week reminds me of the free fall that AAPL went into last August....immediately before a hedge fund redemption date. Institutions looking to raise cash are going to dump the good stuff, not the dogs...

2007 Nov 12 03:44 PM