Blog #4

THE BUZZ

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This is NOT a tech bubble

By Paul R. La Monica @lamonicabuzz February 6, 2012: 12:21 PM ET






This article describes the success and the failure of fortune 500 companies in the United States.  The article explains that the Nasdaq is at its highest level rating since 2000.  It also tells us that the tech companies that own stock like Facebook and Netflix are currently on the rise and helping make this level keep rising.  "If you want to declare that tech stocks are once again a bubble ... you'd be dead wrong.


What will Facebook do with its billions?


With the Nasdaq being 11% higher already so far this year people are starting to worry if a correction needs to be made because companies like Facebook and Apple just have so much money.  If a pullback were to happen it would probably be brief.  Even thought the Nasdaq is still high lately the index is still 44% below the all time highs, so a pullback likely would not happen still for quite awhile.


"Many of the big tech companies are in good product cycles, have recurring revenue streams and they are cheap," said Ted Parrish, co-manager of the Henssler Equity Fund (HEQFX) in Kennesaw, Ga. His fund owns big stakes in Apple, IBM (IBM, Fortune 500) and Qualcomm.

"Facebook is an outlier. You can't look at Facebook and say other techs are too expensive," Parrish added."

I personally believe it is hard to tell what to do with these big tech companies and how large they are getting along with the fact that they rake in so much profit.  Right now it seems to be a good thing for the economy and stock markets, However this could change in the rather near future.  With all these companies getting so big it could be close to time to have to do what some of the people in this article were worried about having a pullback.  Right now experts say there is no need for a change, so they should probably just keep it and not interfere.