You can call us "geeks," "nerds," or "techy wiz kids." Like many of my fellow high-tech aficionados, I wear those nicknames as badges of honor. I got mine by living on the bleeding edge of the digital revolution, after all. And you can't invest in tech stocks unless you've been there. You just wouldn't understand.
Geeks tend to be friendly folks, though. We prize sharing knowledge as highly as gathering it. In that spirit, here's a look at some of the most forward-looking (and geektacular) investments you can make today.
Tip of the hat
If the 1990s belonged to Microsoft (Nasdaq: MSFT), the 2010s and beyond will be ruled by Linux and its cuddly penguin mascot.
When Linus Torvalds created the first Linux kernel, he didn't want to start a revolution. He just wanted a Unix-like operating environment without having to pay enterprise-class licensing fees for it. From that simple desire, the Linux revolution began.
Today, it's getting harder and harder for the folks in Redmond to convince us that every personal computer needs a Windows operating system. You can buy computers right off store shelves today with Linux preinstalled instead, or no OS at all. Apple (Nasdaq: AAPL) built Mac OS X around Linux cousin FreeBSD, bringing the power of Unix to millions of homes -- hidden under a very pretty user interface. And we've only just begun.
As we climb up the foothills of the free-software mountain of opportunity, Red Hat (NYSE: RHT) is perfectly positioned to profit from the trek. The company is the longtime market leader when it comes to turning a profit by essentially giving away free software, then selling expensive training and support for it.
Despite a more-than-10% drop this month, Red Hat's stock has outperformed the S&P 500 in the last one- and five-year periods. Like many other visionaries, Red Hat is often misunderstood by a skeptical Mr. Market, and its shares are prone to wild price swings. Buy at the bottom, then hold on for a decade or more while laughing at the flailing market sentiment.
You say you want a revolution?
Next up is Motley Fool Stock Advisor recommendation Netflix (Nasdaq: NFLX). There's undeniable geek appeal in managing DVD wish lists online, and the burgeoning "watch instantly" feature comes with its own high-tech charisma. Company founder Reed Hastings holds a masters' degree in computer science, for crying out loud. He's one of us!
Okay, so that's the nerd appeal. But there's plenty to love about Netflix from a business-minded point of view, too. Netflix created its own niche market, in which it has fended off spirited challenges from decidedly more mainstream companies like Blockbuster (NYSE: BBI) and Wal-Mart (NYSE: WMT). The company is leading the way into digital delivery, which one day will dominate how consumers get their home entertainment. It's best to build up expertise and reputation early, so that you'll be ready when the traditional entertainment industry starts to crumble.
The future is all digital, and Netflix will be there. Until then, the company is making a very nice living off DVD mailers.
Been there, done that -- and doing it again
This one's for all the grown-up geeks out there. Hewlett-Packard (NYSE: HPQ) has been around for more than six decades, through several wars and technological revolutions, and leading a few of the most dramatic market changes itself. Bill Hewlett and Dave Packard were both electrical engineers, and they managed their company in a style that appealed to their engineering comrades in the trenches. And no true nerd feels complete without an HP reverse Polish notation calculator. HP is truly the grandpa of all geeks.
It's also an irresistible stock today, and HP deserves the applause it's getting. Don't call fellow Fool Rich Smith a geek (to his face), but my esteemed colleague does want us to know that HP's shares are a very cheap way to buy into massive cash flows. Carly Fiorina is long forgotten now, and HP has a bright future ahead.
Building the perfect geek portfolio
As you can see, geeky stocks come in all shapes and sizes across many industries. Some are very volatile, while others are slow-moving giants. Put them all together, and you'd get a tremendously geeky portfolio -- but perhaps a tremendously profitable one, too. Long-term buy and hold, baby.
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