'TO SAY THE MARKET'S TOO EXPENSIVE...IS INCORRECT'
John S. Force, manager of the PBGH Technology & Communications Fund, is one of this year's hottest tech-fund managers. Through Dec. 13, his fund was up 52.2%.
ON WHETHER TECH STOCKS ARE OVERVALUED: Compared to their growth rates, absolutely not. The companies in my portfolio had 60% earnings growth this year and will grow 44% next year. To say the market's too expensive relative to the growth potential is incorrect.
ON WHETHER LARGE TECH STOCKS ARE SAFER THAN SMALL ONES: It's better to own a combination of these companies. I won't buy anything under 20% earnings growth a year, so I stay away from IBM. But there are other large companies growing 20% or more, such as Microsoft and Cisco Systems.
ON THE LIKELIHOOD OF A CORRECTION: Corrections are normal. There have only been two years since 1984 when tech stocks didn't drop at least 10%. Investors better be prepared.
ON HIS FAVORITE SECTORS: I like Internet network equipment companies but not service providers. I also like software companies, including makers of help-desk and electronic design automation software. I like technology service companies. I don't own a meaningful percentage of semiconductor stocks, but I probably will own more as 1997 evolves.
Updated June 13, 1997 by bwwebmaster
Copyright 1996, Bloomberg L.P.