Now May Not Be the Time to Buy Beaten Down Tech

Thursday night on his show, Mr. Jim Cramer mentioned that technology stocks might be a good short-term trade, adding that the sector usually declines from mid-February through August.

The S&P 500 began calculating its present sectors in late 1989 and Birinyi Associates has reconstructed those sectors going back to 1962. Using February 15th as the starting date and August 1st as the end date, we calculated S&P 500 tech performance versus the S&P 500 from 1962 through 2007. It is true that on average the tech sector underperforms the index by 1.18%, but during those years it outperformed 52% of the time. Looking only at the performance of the sector, it was up 0.9% on average, but gains and losses were split at 50% each.

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