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Re: [sharechat] Techs vs the Rest

From: "David Reid" <>
Date: Thu, 23 Dec 1999 22:42:10 +1300

IMHO internet stocks are not good examples of tech stocks.
I will not invest in internet stocks.
My original use of ARM as an example was chosen because here is a company that does not manufacture any physical product for sale. Its product is its intellectual property and it does not even sell that. What it actually does is lease out the designs for a specific amount per unit made and then incorporated in other products.
I believe that every Ericsson mobile has an ARM design chip in it.
Thus the true tech stocks do have products and the quality ones have unique and highly protected or captive markets.
Based on these qualities, it is hard to know what their value really is or more importantly what their value will be some undefined time into the future.
There is only one rule of investment for me and it was penned over 70 years ago by Bernard Baruch
"If you would not buy it today, then sell it."
No buts---no maybes--- no "I am sitting on a loss and it owes me"
The most important question for tech stocks is when to sell. I have no answer unless when the trend (hopefully upward)for the share is lower than the trend for its replacement investment. Obviously when the trend is downward, the bank becomes a better replacement (meantime)
For those still with me I quote for NXT another TRUE tech stock. It has signed licencing intents with several hundred potential users worlwide.
Merrill Lynch highlights the stock's attractions, saying NXT could be the new ARM Holdings - the RISC chip maker which has taken the market by storm this year and pushed its way into the FTSE 100 index, dealers said. They said Merrill is understood to have pointed out the similarities of the two businesses - both of which have strong intellectual property rights over their product, an extensive R&D pipeline and the potential for significant deals with new licencees as their products become the new "industry standard." Currently, NXT is busy developing its new product, SoundVu, which will be ready to market to potential licencees during the first quarter of 2000. NXT has signalled that it plans to work even more closely with its licencees in the development of applications for its core technology - much as ARM does with its major licensee partners. As a result of these factors, Merrill Lynch is understood to have reiterated its 'accumulate' stance on NXT, with a 1,550 pence price target. Merrill Lynch was not available to comment on the report.

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