I’ve read Prof. Jeremy Siegel’s Stocks for the Long Run and his latest book The Future for Investors is on my must-read list (I am hoping our local library would get a copy, so I wouldn’t have to buy). BusinessWeek magazine has an excellent series of debates on the book found here, here and here. Prof. Siegel basic thesis is that investors all too frequently fall into a “growth trap” in the sense that they tend to pay too much for growth companies (mostly in the technology sector) relative to its prospects. Also, picking winners in the tech sector is notoriously difficult. David Jackson makes the same argument in his techuncovered website.
I am underweight technology in my stock portfolios. For me, the reason is very simple. Both my spouse and I are employed in the infotech sector, which is only now emerging from a dreadful nuclear winter. We already have plenty riding on its future that it doesn’t take much sense to take any extra risks in our investments.
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