As has been said often, history rarely repeats itself but it often does rhyme. 

With that in mind, we will at some point come out of this economic downturn / stock market calamity, and for investors, the timing is the key.  This will not be another attempt at “calling the bottom” as so many talking heads have (erroneously) attempted to do over the last several months. It will be an attempt at developing a framework to identify a handful of key factors, those that represent the weakest links in the economy or confidence, in which improvement will be critical to the economy returning to health.   

Could it be that technology stocks, down a blistering 40% from the October 2007 highs, could outperform going forward in a rapidly deteriorating economy?  While it hasn’t been pretty for most stocks in the last year there are a number of encouraging signs that technology equities may have reached a nadir (at least a temporary one.)

Since the technology stock bubble burst, most management teams were replaced, balance sheets were de-levered and growth in expenses were managed tightly which argues for more resilient technology share prices today than during the weakness seen during the oft mentioned “tech wreck” that started in 2000.