Internet News Internet Investing Internet Technology Windows Internet Tech. What he found is something every investor should know.
Volatility probably drives investors out of the market more than anything else.
Most investors don't understand technology, so they bid tech stocks to irrational peaks when times are good, giving the stocks much more room to fall when the economy sours. But the underperformance of the Nifty Fifty tech stocks also says something about the nature of technology companies in general. There is no other explanation for why stocks such as Xerox and Polaroid, which held such commanding market presence in the early 1970s, have produced flat to negative returns since then. Most technology companies become slaves to their own technology or standards. They build products at least in part so they are compatible with the previous generation of their products.