7th Stock

Technology Companies 

In review you now have 6 stocks and 1 ETF.  Consolidated Edison Inc. (ED) or another utility, Kraft Foods Inc. (KFT) or another food stock, Eaton Corp (ETN) or another industrial stock, Potash Corporation of Saskatchewan, Inc. (POT) fertilizer, and U.S. Bancorp (USB) or some other financial (Bank) stock of choice, an oil or gas stock my recommendation was Chevron Corp (CVX).  Last picked was an metal stock my recommendation was copper ore Freeport-McMoRan Copper & Gold Inc. (FCX) but any metal mining sector stock would do.  Remember you can own any stock in the sector not the one I recommend.  I like the SPDR Gold Shares Trust GLD ETF. 

 

Wall Street will have buys on stocks until the company goes backrupt.  Review Enron’s story and the Wall Street’s Enron’s stocks recommendations if you don’t believe me.

Enron’s stock was recommended and loved right up to the fall.  The same can be said for Dell.  Dell Computer stock was loved until a few years ago.  So what about Apple stock?  Look at history at some point with every technology company consumers turn against them.  Doesn’t matter if it is desktop computers, energy electric utility exchanges or even Apple Ipads. 

Problem two with technology companies is you need to avoid most of them.  Stay away from the glamorous loved stocks like Apple.  Apple is a speculation stock so if you want to trade and speculate then buy and sell puts and calls in Apple.  But to invest in a Tech stock you want a steady eddy.  I would recommend Intel Corp. (INTC) which owns a monopoly and gives a 3.89% dividend, or Microsoft Corp. (MSFT) another monopoly with a 2.96% dividend.  Neither is a romantic lovable stock.  Let’s review my June 14 post Two New / Different Sectors.  Never trust a Technology company or its management, they are all liars.  You are just lucky if they are not financial falsifiers and cooking the books like Enron was.  In the last few years you lost money with the management practices of Facebook IPO valuation, Hewlett-Packard’s Mark Hurd, and Yahoo’s co-founder Jerry Yang.  All these men are rich beyond measure and lost you money and are less then ethical not caring about their shareholders.  If there is a hint of dishonesty you must sell a tech stock.  I am not saying that either of my recommendations INTC or MSFT have a problem or I think will have a problem in the future.

If you force me to I would pick Microsoft Corp. (MSFT) because it is so different from the rest of my portfolio picks, it is a software company and not a hardware company.  You want the opposite in a tech stock from what you would like in girl you are dating, so you want a stock that is not sexy or popular.  Ten years from now the 90% of the tech stocks of today will be dead and gone or dog stocks.  Tech is a tough sector.  I chose MSFT because I am not an engineer and will not know if INTC loses its edge with chips until I have lost a lot of money.  I will know sooner if Microsoft screws up with its software.  Do I trust Bill Gates?  The answer is no, he is no different than the first Rockefeller was.  Microsoft reminds me of Rockefeller’s Standard Oil Company both were / are monopolies and destroy / destroyed other companies and lives.  Both destroyed better companies by their monopolistic size.  Microsoft inserted inferior products into its Windows operating system and destroyed far better software.  Not honest so Microsoft management will not be honest with you the shareholder.