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KIRK KAZANJIAN<br />
you’re out of the stock. There’s no question Microsoft is a terrific<br />
business. I think it’s much better than Intel, because Intel has an<br />
enormous number of plants, which takes away from free cash. Microsoft,<br />
on the other hand, is a people business. I must admit that if<br />
Microsoft came down to an attractive valuation, I might be interested<br />
in it, but not in the small technology <strong>com</strong>panies that just have one<br />
product. If that product fizzles out, the business goes broke.”<br />
REDUCING RISK WITH DIVERSIFICATION<br />
Just because Yacktman’s not a big fan of technology stocks doesn’t<br />
mean they don’t belong in your portfolio. As he pointed out, it’s not<br />
that he thinks there’s anything inherently wrong with them. They just<br />
fail to meet his price criteria most of the time. Shelby Davis shares<br />
Yacktman’s concerns, but notes that high-tech stocks can still make<br />
a nice addition to almost every investor’s portfolio. “The way I look<br />
at it, there’s more than one way to paint a beautiful painting,” he<br />
offers. “The brush strokes are totally different between Picasso and<br />
Rembrandt. They don’t even have the same feel. Yet both produced<br />
wonderful masterpieces. You can see that by going to any museum.<br />
I feel the same way about an investment portfolio. There’s no one<br />
style or sector that’s always right when it <strong>com</strong>es to stock selection.<br />
You better find out what your style is, though, before you get started.<br />
I don’t think Rembrandt could have painted like Picasso, and Picasso<br />
couldn’t have painted like Rembrandt. They each had their own style.<br />
That’s the key. If there are investors who know technology well, they<br />
can probably make much more money in those stocks than I can.<br />
They could put more in their portfolio as well. One reason I’m relatively<br />
light in technology is that I have long held that one way for a<br />
business not to make money is to lose a lot by getting into a big hole,<br />
which is exactly what happens to many technology <strong>com</strong>panies, especially<br />
the upstarts. That’s why I tend to be leery of them. But that<br />
doesn’t negate the fact that technology will remain one of the biggest<br />
areas of growth in our economy for the foreseeable future.”<br />
A BACK-DOOR APPROACH TO TECHNOLOGY<br />
INVESTING<br />
One way to gain exposure to this area without investing directly<br />
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