Fred Hickey: Tech reaches bottom
Feb 06, 2012
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Fred Hickey’s High Tech Strategist newsletter has been providing “well-researched and profitable market calls” for years, says Seekingalpha.com. He made his name by calling the top of the 1990s tech bubble long before most other analysts. He also became a fan of gold in 2002 once he saw that the Fed was set to “swap the tech bubble for a housing bubble”.
Now he reckons the long-term bear market in technology, which began when the bubble burst and outlandish valuations began to fall, is nearing an end. Tech stocks “are starting to get attractive on a valuation basis”, he says in Barron’s. The overall market is likely to slide in the second half of this year, he thinks, “and that could be the bottom for tech stocks… we’re almost there. I have started to add to some positions.”
A sign that a major bear market is coming to an end is that “all the enthusiasm” of the previous upswing is “wiped out”. We are nearing this point of “capitulation” for tech, with previous bulls throwing in the towel, reckons Hickey. Some “solid companies” are at multi-year price lows. He reckons Marvell Technology Group could rebound in the second half of 2012 and he still likes Microsoft. As for gold, negative interest rates and money printing by central banks mean that the bull run of the past decade isn’t over yet.
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