There is a toweringly bearish piece in the WSJ today about how much the technology industry sucks — or at least how much the technology industry has sucked so far this year, or at least how much tech stocks have sucked, or at least how much tech stocks have sucked for a week.
Why all the qualifiers? Because the piece, while appropriately scathing about tech stocks this year, is also deliriously ex post, with it commenting on what has already happened, not really laying out why such should continue to be the case. Why are things as bad in tech as in, say, the financials? Right now the markets are saying, "It’s a wash: They’re all bad."
That is silly, of course. While tech isn’t entirely walled off from the broader U.S. economy, it also isn’t as levered to credit and the U.S. economy as current market sentiment says it is. Tech is export-centric, it is largely debt-free, it is in a cyclical upturn, etc.
Would I want to be exposed to retail, via Amazon, say? Or, let’s say, to orthodox enterprise software? No, or at least not right now. But by the same token, I do feel good about wireless, storage, security, and, yes, online advertising. So, while technology is not some mystical safe haven from broader economic woes, it’s also not as bad as it’s looked in the last week (a point, admittedly, you might make about more sectors than tech, to some degree, given how undiscerning the market has been of late).
As another data point, and for more on a less bearish tech case, read the interview with Seagate CEO Bill Watkins here.