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Answer:
Dear
Abe,
You
are certainly right about the fact that each year,
every few months in fact, manufacturers come out with
a new type of multi-tasking camera, a skinnier TV
or a do-all-but-play-the-violin musical device. At
present, this trend shows no signs of slowing down.
While
I cannot recommend specific stocks for you to buy
-- that would violate the "know thy customer" rule,
I can point you in several directions. You then can
follow up by studying the stock recommendations written
by independent analysts in the weekly research publication,
Value Line (www.valueline.com).
Note:
The "know thy customer" rule requires stockbrokers
to know the financial needs, investment objectives,
tolerance for risk, income level, age and investment
goals of each customer -- prior to recommending any
investment of any type, including stocks, bonds and
mutual funds. As you know BUYandHOLD does not offer
or provide any investment advice or opinion regarding
the nature, potential, value, suitability or profitability
of any particular security, portfolio of securities,
transaction or investment strategy.
Make
a list and check it twice
I
would begin by making a list of the technological
items currently available that you think have three
things going for them -- that they are popular, well
made and cutting edge. Then add to your list the names
of the respective manufacturers. These manufacturers
are likely to be (although there's no guarantee),
the ones turning out the next generation gizmo.
For
example, in alphabetical order:
Barbeques
Cassettes & players
Cell phones
Cleaning equipment: dustbusters, vacuums, air purifiers
Computers, printers, scanners, photocopiers
Cooling & heating systems, including fans
DVD players
Dishwashers
Games
GPS Systems
Jacuzzis & hot tubs
MP3 players
Microwaves
PDAs
Radios
Refrigerators
Robots
Security systems
Smart phones
Stoves, ovens, pressure cookers
TVs
Video processors
Video recorders
Washer/Driers
Keep
in mind that the growth in personal technological
equipment, household appliances and electronic gadgets
is likely to mean a growth in the sale of batteries.
Companies are anxious to both maximize and increase
storage capacity.
Other
related companies to study:
-
Those that make software for new digitalized
equipment
- Those
that provide cable-TV and broadband
Internet services
- Those
that manufacturer large and small semiconductor
chips
- Retailers
that sell electronic equipment and household appliances.
Read
I
then recommend you get (and read) the annual reports
of companies on your list. Their web addresses are
listed in Value Line, or google the company and then
click on "investor relations" to order publicly available
documents.
Look
for
You'll
want to invest in companies that are not heavily in
debt, that sink money back into research & development
(with the exception of retailers) and that post continually
rising sales and earnings.
Given
the current backlash against CEOs and other executives
who have captured over-the-top salaries and benefits,
you might want to select companies where the board
of directors keeps top level employee compensation
within reason.
Diversify
Finally,
keep the tried and true clich? in mind, and don't
put all your eggs in one basket. Your portfolio should
not consist only of technology stocks. And within
the technology industry, it's a good idea to own stocks
in several very different companies.
Good
Luck!
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