constantnormal

4 Possible Market Scenarios

Tech companies may be "swimming in money", but most are only knee-deep in revenue -- possibly soon to be ankle-deep.

If you can envision a recovery where the consumers get renewed confidence that their jobs will be around, and have the bulk of their debt paid down, maybe you can project ahead to when the revenue picture improves for these companies.

Until then, the declining revenues are likely to provide a number of air pockets for these high-flying stocks.

Buying cash-rich tech stocks because they are cash-rich is not a sound decision in the face of massive future uncertainties. The only thing that is (nearly) certain is that these companies will survive until the next boom. AAPL could almost certainly withstand the financial collapse of the United States, but that does not mean one would make money owning it.

If you want to gamble on a recovery emerging because stocks are rising, you may as well buy housing stocks or TBTF banks. The returns for them are likely to be much greater in a recovery scenario.

Not so much if the recovery does not materialize.

I would be watching for large-scale insider buying at these cash-rich tech companies as a sign to acquire them. I have not seen any signs of this yet.