We've been battered for the past few weeks with revenue and earnings warnings from many tech firms. The bad news came from firms like Intel
But just when you think you have this whole tech thing figured out, along comes an industry-wide prediction that muddles things further. Industry watcher IDC predicts increased demand for PCs, at least from businesses. Hey, more PCs means more need for stuff like network hubs, servers, software, mouse pads, backache pills, and everything else, right? Cool. Everyone, back into tech!
Didn't fall for that? I hoped not.
Does that mean I think you should avoid tech? Also a big "no." Instead, think like that spoon-bending kid in the Matrix and repeat to yourself, "There is no tech industry... there is no tech industry."
What am I talking about? Consider Microsoft
That's why concentrating on artificial constructs like industry sectors is a bad move when you invest in individual stocks. You know that old saw about missing the forest for the trees? Too often we investors make the opposite mistake: We miss the trees for the forest. Look carefully at tech or any other so-called sector. Sure, there may be plenty of rotten wood ready to fall with the next storm, but there are also strong trees that will not only survive but thrive.
Buffett didn't sweat the economy. Lynch bet against predicted trends all the time. They made bundles by finding the good wood. You can do it, too.