Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Tech Themes for 2010

By

This sector will help lead the markets to growth this year.

PrintPRINT

Broadly, I think this year will be dictated by the transition from a world where stocks only rise as the US dollar falls to a market where dollar strength becomes supportive of US stock prices (as well as China, Australia, and select emerging markets).

Much of the media and negative pundits will continue to say that various financial government stimulus packages are the main reason that stocks and certain economic indicators/measures are rising, and until this prevailing sentiment shifts, the stock market bulls will likely be rewarded.

I still see GDP growth and jobs improvement well above consensus, as I did last year.

Interestingly, many government work programs will be put into existence and more real stimulus money will be infused into the economy than in 2009. Certain sectors are poised to benefit even more compared to the prior year and finding spillover-effect stock plays will provide notable alpha.

Finally, in my bailiwick (technology), web-based video (3-D TV?), bandwidth, and touch-screen technologies will come to the fore again as the promise of 2000 will become realized in 2010.

1. Starting the themes with a master of the obvious call. I see extremely low rates through 2011 -- with my range being 0 bps to 75 bps of tightening and my gut feel that we see the Federal Reserve remove its 0 bps to 25 bps funds rate and replace it with either a 25 bps or 50 bps (or a 25 bps to 50bps floating) funds rate.

This should continue to spur stronger-than-expected economic activity, so I'm sticking with my highly variant view (through 2009) of a stronger recovery and GDP growth than commonly expected while inflation remains benign.

2. Even though we've seen strong stock performance out of the networking and data storage, I'm essentially repeating this theme from last year:

We already have approved a $45 billion to $50 billion government broadband and security infrastructure package that's ready to roll over the next few years. Networking, security, and strong ERP and data storage firms will benefit most.


The only changes I'll make are emphasizing networking and data storage firms and deemphasizing security and ERP firms as they materially outperformed during 2009.

I think Cisco (CSCO), Broadcom (BRCM), EZchip Semiconductor (EZCH), and VMware (VMW) are names to note and reasonably priced, but there are a host of others that will benefit greatly.

3. Dogs of the Dow. I think this strategy will make a comeback and start beating the Dow again. I also like stocks that resume solid dividend payouts and/or exhibit strong dividend growth rates. This should be one of the factors helping banks produce sizable upside in 2010.

< Previous
Position in BRCM, EZCH, AAPL, ERTS, ADTN, AONE, and AOL

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

PrintPRINT

Busy? Subscribe to our free newsletter!

Submit
 

WHAT'S POPULAR IN THE VILLE