Should You Invest in Tech Stocks? | Phil Town

What do you all think – do you agree with my perspective of tech stocks being risky? Do you know what the rule of 72 is? If not, download my free cheat sheet here >> http://bit.ly/72ruler

Tesla?

Warren Buffet's investment in IBM is looking terrible right now. It's down 6% in the last year. I was shocked to hear that Buffet invested in them.

I think there are certain companies like Apple and Amazon that use tech in their business , but their main value proposition is not technology itself but they use it as a tool to deliver an amazing customer experience, in the end the tech is just. a vehicle for them to create great experiences for people, that type of business I think does fit well with the #1 rule, other businesses like IBM and Digital Ocean are less predictable as they make B2B cloud solutions, not very safe because the industry preference changes over time on what they are gonna use for their infrastructure, so there is not a high level of loyalty as in consumer products/services.

I agree tech stocks can be real risky. Particularly with apple, which hasn’t been reaching as many consumers due to higher prices. Not to mention they almost failed when they lost Steve Jobs least time. It looks as if they’ve shifted toward a money making mindset instead of bringing leading edge tech to more ppl. Not to mention the growth prospects on Netflix and Facebook are dwindling

I really like Phil's videos but when it comes to tech stocks I think it's more about being diversified. Just my opinion.

the girl at 0:14 is hot, what's her info?

I think the major issue with tech company that they do not have lot of assets. once they fall, there is nothing to sell and pay to shareholders

Tech companies will ultimately change the way we chew gum. With the internet, the spread of info is so much faster. Sugar sales will slump in the next decade. People will avoid sugar. Gum is sugar. Less gum chewing. Buffets sugar companies will suffer soon enough.

I think the issue here is that one of these rules is turned upside down. Phil says we shouldn't invest into something we don't understand. Absolutely. But with tech, the issue sometimes the exact opposite. We understand it too well. At least we think so…
We think we understand it, because we use it every day. We are pro Facebook users, we read and write tweets every hour, we mine bitcoin, so we are overly confident about these. But do we understand the business model underneath? Probably not.
We also become arrogant about it. Yeah I know Twitter very well, way more than those dinosaurs on Wall Street. So I will take advantage of it. I hear many times that Warren Buffet has no idea about how Bitcoin works, so he misses a great opportunity for huge profit. And these kids claim they understand, so they will buy it… But do they? Yes, they understand the tech part. But do they understand the business? I claim Warren Buffet understand the business behind the Bitcoin way more than these kids, even if he knows nothing about the tech. And for investing, we need to know the business, not the tech.

Let's take Twitter for example. We can be easily hyped about it. I use it every day, lots of users, growth, it is mentioned on TV all the time, a big success story. So I should buy it. Not so fast… Does Twitter make any money? That is the only thing I should care about as an investor. And the answer is, not really… Early 2018 were the first times it reported ANY profit. And how they made this profit? By selling data about user behavior, which is a very controversial topic now. A sudden (and quite possible) change in regulations can cripple that profit, and then our investment becomes worthless.
Google on the other hand, for example, makes decent and sustainable profit from advertisements, which is a way more stable market.

This guy is talking shit trading technology is the best you can’t just base it of of one thing like the dot com bubble I only trade technology and never lost money with tech I know technology so that is why I trade it because I know it the old generation of traders and investors don’t know technology stocks they think just because they don’t know a company they thing it is bad

Interesting perspective. I'm personally a strong believer in many tech companies – but some are just ones I don't believe in for the long run anymore (SNAPCHAT…). A strong balance sheet and CEO is what I look for mainly.

I said to my self of i by Apple to buy Microsoft as well but waiting for. The limit price as well ($90)

A company named Neuralink, if successful, will change the way we chew gum.

Tech companies are more vulnerable

Tech companies is where the money is at if you don't want to hold a stock for 10 years (who would??). The reason tech companies are great is because it's really the only place of innovation left (apart maybe from pharma stocks). There is no point buying some boring department store or some boring food company, because there is absolutely no innovation in these areas. The growth will be very slow and minimal. It's like watching grass grow in slow motion. Look for innovative companies, that are JUST touching and entering unexplored markets. Things that are going to be the future. For example, before the online shopping exploded, wouldn't you want to buy Amazon stock? Before social media exploded, wouldn't you want to buy Facebook stock? Today there are other great companies that are just starting to tap into great potential markets, companies like SHOP, GRUB, and UBER (though, not public, but you get the idea) are some great examples. Yeah, you can invest in IBM and make a few % ROI every year on average. Or you can double your money in a year by investing in a good tech growth stock.

Crypto

Can you do a video on your take on margin, options, and ETF's?

My problem with tech is that there is too much speculation on growth. If the company posts great earnings but gives a rather weak guidance, the stock tumbles a lot. So in my opinion the price is much more dependent on the perceived growth of the company than the actual results (at least in the short term). Tech stocks also seem to be the most volatile stocks in my portfolio.

Nice suggestion thanks a lot

For a tech business to be investment-grade, it must have a long and proven track record as well as a defendable economic moat! I talk about this is one of my recent videos!

Great analysis! Although some tech companies might be risky, some like Tesla Motors avoid competition which makes them more secure. Would you agree?

Hey Phil loved your seminar in Toronto, I like to invest in people, some are wired different from others like Warren Buffett, Bill Gates, Steve Jobs, Richard Branson and now Jeff Bezos even though these products changes their vision give these companies a stronghold, would you agre

Tech companies are not the gum. I trade tech companies though I found one. Even if you know the tech, even if there is a mode, the market is not leveraged well enough and usually in the tech the real power is in the hands of the marketers or in the hands of the engineering. No real management is happening.

Thing is Phil, in 2018, tech is the gum 😉

I have looked up the 10k for at&t and was surprised by the amount of debt they had. I should not have been being the price of land and equipment they have to buy. Though with tech the point of having them in business for 5 to 10 years is definitely important. Might even push to closer to the 10-year mark or longer. I may say push beyond just tech and go into a portion of the tech. say electricity production, or just parts for the phones.

Good video

Agree with Phil, the industry is rapidly changing and it is difficult to predict a future with tech the same way you can predict with say Coca-Cola or Wrigley's. But, would it still be considered risky (the same way 2K was perceived) for some of the tech giants to be considered new? They have been around for a while now and have consistently been a part of our lives for at least the last decade.

I love tech companies since I'm a nerd/techy and understand them well. They're in my circle of competence, but their moats are very hard to identify. I look at software companies rather than hardware since I know more about software and their business trends. While I'm young (22) I think it's okay to take a few more risks.
DropBox is on my watch list as it becomes an IPO. Spotify as well on the IPO watch list with its direct filing. Even though they're a subscription service, they heavily invest in data analysis, and do it well. I'm a huge Google fanboy, but Spotify has an even better automated playlist targeted for their users.
I love the chewing gum quote!

My biggest struggle with tech companies is that many have a large amount of debt and the fact that a tech company is often a subcomponent of another sector. So when I invest in tech I want to go into the parts that are within the industries I understand and can comfortably see where the overarching industry is going.