Technology Leadership

There are so many components to Technology and so much going on in the group, that I need to break it up into a couple of pieces. I want to start with the names everybody knows, because people tend to like to buy what they know, even though it may not be a great place to be investing.

Here are a couple pairs of current leaders versus past leaders. You tell me which ones the institutions are selling and which ones they are adding to – Apple (AAPL)/Research In Motion (RIMM), BIDU (BIDU)/ Google (GOOG). RIMM is almost at its Bear Market lows! Google’s decision to take on China has been a windfall for BIDU.





What do you think Priceline (PCLN) and Amazon (AMZN) both breaking down together tells you about online consumer spending? EBAY looks worse!



SanDisk (SNDK) makes the “flash” memory for mobile devices, while Seagate (STX) has always focused on Hard Disk Drives for computers and servers. You can see that the mobile devices are where the growth is.



For semiconductors that go into phones, the key is to be a supplier of Apple and not a competitor. Cirrus Logic (CRUS) has chips in iPhones, while Nokia (NOK) devices are clearly not popular at the present time.



Will these trends of outperformance continue? I do not know, but the ability to determine what is leading and what is lagging is a critical skill for investors.

Also keep in mind that although these leaders have held up so far, they often get hit hard too when the markets correct.