SINGAPORE (July 16): On July 10, the technology bellwether Nasdaq Composite Index came within a whisker of its all-time high of June 20. Following a correction in early February and, again, in early April, the benchmark has been climbing higher despite rising interest rates and concerns over a trade and tariff war with China, partly because the high-growth tech sector is seen as a safe haven of sorts in the current environment. Concerns about US President Donald Trump’s policy on China’s access to key tech has in recent weeks hit stocks in the semiconductor supply chain hard, but even that has failed to halt tech stocks’ march to new peaks.
Few portfolio managers know technology like Paul Meeks, 55, who has been covering tech stocks for 30 years. Meeks actually grew up in Singapore while his father was Asia CEO of a multinational chemical company. At the height of the tech bubble in 2000, Meeks was senior portfolio manager at Merrill Lynch Investment Managers, overseeing US$7 billion ($9.5 billion) in tech-related funds under management. Then the tech bubble burst and, like other tech-focused portfolio managers, he suddenly found his funds decimated. Eighteen years on, Meeks is chief investment officer of Portland, Oregon-based Sloy, Dahl & Holst, where he manages a tech-heavy portfolio of more than US$1 billion.
“Overall, the fundamentals for tech are still pretty strong compared with the 10 other sectors that make up the Standard & Poor’s 500 index,” he tells The Edge Singapore in a recent interview. As such, it really is a question of valuation, and the concern is that they may be a little stretched, at least for some of the big tech names that make up the FAANGs — Facebook, Amazon.com, Apple, Netflix and Google’s parent Alphabet, he notes.