For the first time since 2002 tech has surpassed financials to become the largest sector in the S&P 500. How should you bet on tech?
Joe Clark, Financial Enhancement Group Founder & CIO joins the panel for this conversation. Following are a summary of his main points.
Clark currently likes big cap tech. Despite record oil he feels the balance sheets of Corporate America are strong and that the money will be used to upgrade tech equipment.
“That means you want to be in IBM (IBM), Microsoft (MSFT) and Hewlett-Packard (HPQ) which collectively could generate returns of 20% in the next 52 weeks,” he counsels.
“Big blue is bright,” says Clark. “In April of ’06 they floated bonds to buy back their own stock and now they are laughing all the way to the bank.” On top of that Clark thinks IBM should benefit as companies upgrade their software. Microsoft should benefit as well.
On the other hand Hewlett Packard should win as firms buy new equipment “For 8 years HP had been dead money but for the past 5 years it’s been a double and I think it will go even more,” he says.
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Trader disclosure: On May 21, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (INTC), (BTU), (AGU), (C), (GS), (MSFT), (NUE); Najarian Owns (AAPL), (ANR), (HPQ), (XLF); Najarian Owns (FTO) Calls; Macke Owns (MSFT), (WMT), (DIS); Finerman Owns (GS); Finerman's Firm Owns (MSFT), (TSO), (VCLK), (VLO); Finerman's Firm Owns SPX Index Puts; Finerman's Firm Owns (C) And (C) Leaps; Finerman's Firm Owns (YHOO) 1X2 Call Spreads; Finerman's Firm Is Short (IYR), (IJR), (MDY), (IWM), (SPY)
Clark's Family And Clients Own (HPQ); Clark And His Clients Own (AAPL), (IGV), (QQQQ), (IVW), (ILF), (EWZ), (EEM), (ORCL); Clients Of Clark Own (MSFT), (IBM), (UUP)