Michael Shulman

How to Bet on Tech Without Losing Your Shirt

by Michael Shulman   11/26/08

In addition to the ChangeWave data, the tech wreck can be seen in individual companies, as one after the other is cutting back.

Hewlett-Packard (HPQ) has its personal computer group on a two-week furlough around the holidays. Cisco (CSCO) just announced something similar for a few days, and so on.

And given the speed with which this recession is accelerating, don't think things will turn around any time soon -- they won't.

The conventional wisdom on Wall Street -- the tech bulls -- goes something like this: The recession will start to recede in mid-2009, and one of the first things to rebound will be business capital spending, led by IT spending. So investors should get the stocks early.

Yeah, right.

All of the data -- and the Federal Reserve -- see a serious recession lasting through 2009. I actually see it going longer.

Business capital spending will continue to lag until we see a major rebound in consumer spending.

Also, more than half of tech sales are overseas. These countries are just entering a recession and will likely rebound later than the United States.

So you can forget about a rebound beginning in mid-2009. Maybe we'll see one six to 12 months later.