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Š.. And the upbeat goes on

Technology investors are a funny old lot.

No sooner have they sat and watched dotcom stocks plunge, mouse finger

poised over the “Sell” icon on their screens, than they are posting upbeat

messages on investment bulletin boards saying: “Good time to buy.”

Many of our investors are remaining upbeat about the technology sector.

Their message is: “Look, we all knew these stocks were overvalued, we all

knew a correction was coming. Well, it has, so what is everyone whingeing


Invesco UK chief executive Mike Webb says: “It is quite simple. We look

for companies with real sales and real cashflow. The firms that will not

recover will be those companies that do not have those things. These were

the same ones that always looked overvalued.

“Quality technology stocks are still being driven by the technology

revolution so they are the ones which will prevail.”

Finsbury technology trust manager Mike Bourne says: “In quantity terms, it

has been a normal pullback in the tech market. I have been in this market

since the 1980s and each year there is at least a 25 to 30 per cent


“On balance, we think first-quarter earnings in the US are going to be

spectacular. Plus, there is a lot of money in US mutual funds which will

support the market.”

IFAs with client investments in the technology sector should be aware that

there is a “selling incentive” .

Many companies came to market in the second half of last year. Key

investors, such as founder company officials and venture capitalists, have,

by law, to hold on to shares for at least six months after the initial

public offering.

Venture capitalists, in particular, often like to realise profits and move

on to other investments.

Based on 1998 figures, there could be more than $10bn worth of stock

coming on to the market from “insiders” each month. This could put further

downward pressure on prices.


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