Even as the stock market hits new highs, there’s discernible negativity toward the technology sector. That sets up the classic “wall of worry” for these stocks to climb — which makes them a buy.
China’s use of monetary easing, tax cuts, and infrastructure spending appear to be kicking in. And the decision to delay Brexit has reduced the potential damage from a no-deal Brexit — at least until October. Besides, IPOs are way overrated. You don’t have to participate in every one right away. In fact, a good strategy is to do the opposite and avoid them all until they turn into “busted IPOs” which means they trade significantly below their debut prices. This happens to a lot of IPOs, so it is worth being patient.
Vandeventer cites the following companies as beneficiaries of these trends: ServiceNow NOW, -0.35% Shopify SHOP, -1.62% Workday WDAY, +0.09% Paycom Software PAYC, -1.04% Okta OKTA, +0.67% Twilio TWLO, +0.56% and Paylocity PCTY, -2.08% “It’s hard to argue these are undiscovered. But this is the best place in tech to be invested,” he says. All are among the 20 largest holdings in his fund.
True, there are legitimate concerns. Social media and search giants are getting attacked from the right and the left for free speech and privacy violations. Jeffrey Gundlach of DoubleLine Capital thinks the party is over at Facebook because regulators are on the scene. Hardly a day goes by without another article repeating the cliché that young people are fleeing Facebook.