Tech stocks have had a poor last couple of months. March was especially brutal, with tech falling 4%. And while some think tech stocks still look like a good bet, Barron’s has put out an article based on a BAML opinion which contends that tech stocks look very vulnerable. The key reason why is what the piece calls an “Occupy Silicon Valley” mindset (recalling the Occupy Wall Street movement from several years ago). This mindset leaves the Valley at risk in two very core ways. Firstly, by regulation, which the government (and the public) seem increasingly intent upon delivering. And secondly, to a tax raid, especially if government finances continue to deteriorate.
FINSUM: We are of a mixed mind on tech right now. On the one hand, these arguments hold water with us. But on the other, the underlying businesses of tech companies are strong and this could all blow over.