Arnie Berman Tech Quotations

nearly as dire as technology stock prices currently reflect.

In the late '90s investors believed that tech was such a great secular growth story that cycles didn't matter. In this rebound, the only thing that matters is the economic context.

Clearly there are a lot of industries in tech that are just begging to be consolidated. So the question is not whether the pace of M&A picks up in 2005 but whether it will represent a breaking of the dam.

There's no unilateral belief about tech stocks. People are confused and somewhat justifiably.

Companies in the technology sector are clearly overcapitalized and they are going to be increasingly forced by investors to make decisions about their cash,

Any technology spending recovery follows a simple principle: things that are easiest to do without come back last,

You've had a narrow group of tech companies that have been delivering positive and accelerating growth characteristics and money tends to get concentrated in those few companies that are doing that.

HP's problems with services are not uncommon. IBM has had issues like that, too, of late. The larger problem with tech today (Friday) and in the last month has been that improvement in semiconductor capital equipment, like Applied Materials, doesn't transfer over to the rest of the tech sector. While tech fundamentals are turning, the evidence of that has been slow coming.

A lot of the best news is associated with the PC industry. Intel has been not just a bellwether in the sense that it's big, but in the sense that technology as an industry has returned to positive year-over-year growth rates, and technology as an industry tends to be delivering more upside surprises than downside surprises these days. Intel started to do that earlier and more substantially than the rest of technology.

Technology stocks were grossly oversold going into this. The recovery in fundamentals won't happen all at once, but it will get under way in the second quarter.

Technology stocks that were once valued on a price-to-possibilities basis are now valued as if history no longer matters,

The first quarter was so brutal for technology spending that even IBM missed the number and chose to lower the bar. But here you have an example of a company that's very big and whose results were not, in any respect, worse than expected.

How these companies sound isn't a terribly good basis for investing right now, ... The fact is that in an incremental cyclical recovery, capital spending will recover at a brisker pace than the overall recovery, and technology spending will recover at a faster rate than capital spending.

The latter stage of an economic recovery, where head count is rising and productivity is starting to fall, is the best for technology spending, and that's where we will be in 2006. Business leaders start thinking more about technology and less about questions like capacity expansion or how long the recovery will last.

The outsize rally in the publicly traded debt for companies in this sector suggests that the bond market is sending a signal that the communications equipment sub-sector is particularly attractive at present relative to other technology sub-sectors,