Fred Hickey: Sell Apple, buy Vietnam

Fred Hickey called the top of the 1990s technology bubble and has liked gold ever since the bull market got going in the early 2000s. This year, the editor of the High-Tech Strategist, a newsletter, gave the Barron’s Roundtable his “typically astute take on the tech sector’s haves and have nothings”.

He’s not impressed with the sector at all. Semiconductor sales are falling and this “is the worst environment for PC companies in a decade or more”. Smartphone sales growth is slowing and likely government cuts are undermining an already lacklustre enterprise-IT sector.

One stock he does like, however, is EMC (US: EMC). The largest data-storage group in the world is still growing strongly and has gained market share from its competitors. It also owns 79% of VMware, which provides virtualisation and cloud infrastructure technology. VMware “is one of the most exciting tech companies around”.

Apple, on the other hand, looks “risky”. The types of products Apple makes get commoditised and so the group’s margins will shrink. It will also be hard for the group to come up with great new products to sustain margins. The Android market is gaining share, Steve Jobs is no longer there to lead the company, and any move into television will face tough competition. The stock could fall by another $50.

Hickey also likes long-time MoneyWeek favourite Vietnam. Moves to bring inflation under control and privatise state businesses have fuelled optimism. Tech production has shifted from China to Vietnam because the labour force is younger (the average age of the overall population is 28) and costs are lower. Samsung, Hickey notes, has moved 40% of mobile-phone production to the country. He also remains a fan of gold.

MoneyWeek magazine

Latest issue:

Magazine cover
Party's over for Putin

The only portfolio safe from Russia's rout

The UK's best-selling financial magazine. Take a FREE trial today.
Claim 4 FREE Issues

Hedge fund manager Hugh Hendry: 'It felt like the sun rose only to humiliate me'

In a series of three short videos, Merryn Somerset-Webb talks to Hugh Hendry, manager of the Eclectica hedge fund, about everything from China to the US, Europe, and Japan.

Which investment platform?

When it comes to buying shares and funds, there are several investment platforms and brokers to choose from. They all offer various fee structures to suit individual investing habits.
Find out which one is best for you.

19 December 1932: BBC World Service begins

The first royal Christmas message by George V gave the fledgling World Service an early boost six days after it was founded in 1932.