This Time it Really is Different

A fast four weeks has passed since the prior issue of Smart Tech Investor, which has included quarterly earnings reports from most of the major tech companies we follow.  And just as we thought, many of these reports have caught the market by surprise.  While most Wall Street pundits shrug off the recent extreme volatility in many tech stocks to “profit taking” after several years of strong appreciation, we think there is something much more profound going on that will continue for the remainder of 2014.

It’s not the recent quarterly reports that have been surprising so much as the confused response by investors who still haven’t completely latched on to what is happening in the tech sector.  As our In Focus article explains, the construction of the Information Highway is now complete, so the tech companies that will dominate the future are those that have already figured that out and are aggressively innograting towards providing the modern day internet equivalent of the food, shelter and fuel provided by the growth companies of the previous century.

To illustrate that point, our Sector Spotlight article explores as an example of one such “off-ramp” vendor.  Will Amazon be the next McDonald’s of its generation, or will it turn out to be more like A&W which was there first but failed to recognize exactly where the opportunity lay?  As you know from our recent advice, we think Amazon has become grossly overvalued and still needs to prove that it can successfully defend a profitable revenue stream – much as Apple has been able to do thus far with its smartphone.

We have moved our Portfolio Update further down the issue to be positioned directly above our two portfolios to make it easier for you to track the progress of our specific recommendations.  Over the past month there has been significant movement in many of our Equity Trades stocks, so we’ll go over each one of those to make sure you know what to do.  Our Investments Portfolio, which is longer term in nature, has not had any major changes to it since the previous issue of STI so it remains in tact.

Finally, we invite your comments in the Stock Talk section beneath each article.  The tech sector is the most dynamic element of the stock market, so we can’t possibly address every aspect of it in a single issue of STI.  However, we would be happy to respond to any questions or concerns you have that require our attention.  Please write!