Investing in this environment will be hazardous, to say the least. The avalanche of new hardware and software products will guarantee trouble for many companies. Fortunes will be made on technology stocks by those who understand the sector, and fortunes will be lost by those who do not. Warren Buffett, probably the most successful investor of modern times, put it succinctly when asked about technology stocks. In addition, the investment community knows that it has been very easy to get burned in the technology sector.
Earnings surprises are an ongoing problem.
Companies seem to lose their winning ways from one year to the next. The sector has been a veritable minefield. Someone once said that we do not have a stock market, but a market of stocks. The implication being that you can lose money in a bull market if you own the wrong stocks, and you can make money in a bear market if you own the right stocks. This theory is even more applicable to technology stocks.