Tags: tech | investors | hoping | dreaming

UBS' Haefele: Tech Stock Investors Hoping and Dreaming

By    |   Thursday, 06 March 2014 02:34 PM

Investors may be overdoing it with their enthusiasm for technology stocks, experts say.

Many investors have been driven to that sector by lack of opportunity elsewhere.

"There’s some appetite from investors now to hope and dream rather than focus on the downside risks, and that naturally points them towards technology," Mark Haefele, head of investment at UBS Wealth Management, told the Financial Times.

"Are there going to be people who wake up one day and find that they let their greed trump their fear? Absolutely."

Some see tech stocks as the latest market fad. "The market is starving for growth ideas," Alain Bokobza, head of global asset allocation at Société Générale, told the FT. "We are back to where we were in 1996, 1997, where the markets moved to a new story."

To some extent, it boils down to the issue of supply and demand, says Pierre Lagrange, co-founder of London hedge fund GLG.

"You have a lot of people interested in big data and you have got relatively few stocks so there’s a rarity factor,” he told the FT. "There’s lazy money in some of those [shares] because it is thematic."

But Morgan Stanley remains bullish on tech.

"We get why investors want to sniff out this bubble the day before everyone else and become rich and famous," the firm's chief equity strategist Adam Parker wrote in a commentary obtained by The Wall Street Journal.

"But portfolio managers typically want exposure to growth, and when you scan the list of the top 10 fastest revenue growth industries in the market in the next two years, Internet and catalog retail and Internet software and services are prominent among them."

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Investors may be overdoing it with their enthusiasm for technology stocks, experts say.
Thursday, 06 March 2014 02:34 PM
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