The case for the US technology hardware sector

Tech has only marched halfway up

While technology stocks have enjoyed a strong rally since the stock market nadir at end-2008, it is perhaps surprising to note that they have only recovered 50% of the ground lost during the 2000-2003 tech bust.

But over the last decade or so, there have been many changes in tech-land. Many mobile phone makers such as Nokia, Motorola, SonyEricsson and Blackberry have come and largely gone, to be replaced by Apple, Samsung, LG and a whole raft of Chinese Android smartphone producers. We have seen the advent of the tablet and even the “phablet” (a crossover between a smartphone and a small tablet), and of course we have witnessed the phenomenal rise of social media, with Facebook, Twitter, and Linkedin leading the vanguard. I want to focus in this article on the technology hardware sector, makers of physical technology objects rather than providers of services or software.

Improving Capital Spending Trends Are a Help

The technology sector is particularly geared to macro investment trends, as companies tend to favour technology-related investments in good economic times as they tend to bear quick-to-emerge and sizeable fruit in the form of productivity, boosting profitability. Guess what? US durable goods orders have recovered steadily over last year, pointing to improving corporate investment trends that should benefit tech stocks.

To read the rest of this article, please click on the MindfulMoney link below:

Tech-has-only-marched-halfway-up

Bon weekend,

Edmund

Video: Why I like the (US) Technology Hardware space

Good day to all,

I wanted to draw your attention today to a video I recorded with the financial news and analysis website Mindful Money, focusing on why I like the Technology Hardware space (particularly in the US) right now.

Please click on the link below to go to the Mindful Money home page, and then click on the video on the right-hand side of the page to play it (7 minutes long):

Mindful Money Video on Technology Hardware

I hope you find it interesting!

All the best,

Edmund

Rio Tinto: Mining for value

Over at least the past decade, UK-listed mining stocks such as Rio Tinto (RIO) have been tightly correlated with two key financial asset classes:

Industrial commodities (industrial metals such as copper, nickel and aluminium and coal for making steel) and Emerging markets such as the Brazilian, Russian, Indian and Chinese (BRIC) stock markets, as well as the Australian stock market (which is itself heavily-weighted towards mining stocks).

The reason for this is clear: the main sources of growth in demand both for these industrial metals and for coal have been China and India, as they have expanded their heavy manufacturing bases to become the world’s centres for all types of manufactured goods, from white goods to toys.

Nothing new or particularly interesting to note so far. Recall that the worst-performing major regional stock markets over 2013 were indeed Emerging Markets; and that one of the worst-performing industrial sectors in the UK stock market last year was the Mining sector, both driven by concerns over slowing growth in the major BRIC economies.

But Rio Tinto is Now Diverging from Emerging Markets

However, now for a more interesting and perhaps less obvious fact: Since the middle of last year, the major UK-listed diversified mining company Rio Tinto has managed to de-correlate from the poor trend in emerging market stocks.

To read the rest of this article and see the associated graphs, please click on the link below to my "Expert Opinion" page on the MindfulMoney website:

Mining-for-value-in-Rio-Tinto

Happy digging, 

Edmund

Early Morning Interview on Bloomberg TV - discussing US Media, technology stocks

Hi there,

You may be interested to hear what I had to say on Bloomberg TV early this morning (Tue Jan 14, 2014) on the subject of US Media and Technology stocks, in focus on the back of the unsolicited takeover offer for US cable operator Time Warner Cable from rival Charter, for $61bn in cash and shares.

I remain bullish on both these sectors for 2014, both in the US and in Europe...

Bloomberg TV: Why-you-may-want-to-invest-in-media-tech-stocks

Edmund

Clean energy has the solar wind in its sails

In hunting around for investment themes for 2014, you could do worse than look to what has already performed well through 2013. Remember, momentum tends to be persistent in financial markets, i.e. unlike the effect of gravity in the physical world, in stock markets what goes up tends to keep on going up.

One of the hottest investment themes of 2013 was Clean (or Renewable) Energy. In the US, the Guggenheim Solar ETF (code TAN) gained 125% over calendar year 2013, while the First Trust Global Wind ETF rose 64%. Could this stellar performance possibly be repeated this year?

 2014 Trend number 2: Clean Energy Gathers Ever More Momentum

The first question that needs to be answered is of course: what is driving these solar and wind energy stocks up? The simple answer is a combination of two factors:

Please click on the Mindful Money web link below to read the rest of the article, including potential ways to invest in this theme:

Clean-energy-has-the-solar-wind-in-its-sails

Take advantage of this following wind for your investments!

Edmund

CNBC Europe Squawkbox appearance: Why I like European stocks

On CNBC Europe's Squawkbox programme this morning (where I was acting as Guest Host), we discussed a number of topics including UK retailers (after the relatively poor results from Tesco, Marks & Spencer and Wm. Morrison).

We also discussed the relative merits of European stocks, given the ongoing support that the European Central Bank is giving to the Euro-zone economy (ECB meeting and press conference taking place today). 

I am a big fan of European stock markets for 2014 after pretty good performance last year: here is a 2-minute video snippet where I discuss why!

CNBC Europe: 9 January 2014

Here's looking to happy investing in 2014,

Edmund

2014: Walking the Yield Tightrope

A Happy New Year to you!

Looking in the rear-view mirror, 2013 was perhaps surprisingly a very good year for investors willing to take on financial risk in the face of an uncertain macroeconomic climate. Despite the complete lack of growth in the Euro area, question marks over the sustainability of growth in previously fast-growing emerging economic powerhouses such as China and India, and the twin headwinds of a government shutdown and higher taxes Stateside, developed stock markets delivered frankly impressive returns as did a number of other asset classes such as high-yield corporate bonds and residential property.

But as we set foot on the investment path anew in 2014, in what direction should we be heading? Will 2013’s financial market trends be repeated this year, or should we be changing course?

2014 Trend number 1: Still Hunting for Yield

Please click on the web link below to my Mindful Money mini-site to continue reading this article...

2014: Walking the Yield Tightrope

Best wishes for 2014! 

Edmund