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8:30 AM EST Wednesday, May 10, 2006: The big tech companies are spending more to stay up, while sales flatten and inventories explode. I love technology, but we've hit a wall, for now.

In his latest newsletter, The High-Tech Strategist, Fred Hickey talks about PC revenue growth this year as being negative and an upcoming crisis in the semiconductor biz. Indicative: Cisco's miserable returns of late:


Chart from today's Wall Street Journal

Says Hickey, "The semiconductor equipment industry's largest customer (Intel) will soon be slashing equipment orders. It has no choice."

Hickey's long holdings are in metals -- especially gold (Newmont) and the new silver ETF (SLV). He has a tiny short position in Google, which he sees as a train running 300 MPH down a track. "If it hits any kind of bump (an accelerated slowdown in advertising spending due to a slower economy or a slowdown caused by increased competition), Google's stock will be a spectacular train wreck. Continues Hickey, "In its Q1 report, Microsoft let it be known it was willing to sacrifice its own short-term profitability in order to ratchet up the heat on Google."

Hickey currently holds longer-term put options on Netlogic (NETL), Omnivision (OVTI), Palm (PALM), Benchmark Electronics (BHE), Jabil Circuits (JBL), Texas Instruments (TXN), CDW Corp. (CDWC), Intel (INTC), Freescale Semiconductor (FSL), Garmin (GRMN), SanDisk (SNDK), Nvidia (NVDA), Lam Research (LRCX), Home Depot (HD), Goldman Sachs (GS), Lehman Brothers (LEH), Capital One (COF) and Countrywide Financial (CFC). He said he will consider buying put options on companies reporting this month: Cisco, Analog Devices and Marvell.

Gabriel's investment focus. Gabriel Venture Partners runs venture funds. Yesterday was their annual partners meeting. Their two recent funds -- from 1999 and 2001 -- are barely breaking even. It's been a hard few years for venture firms. Areas they're now looking to invest include:
+ Disruptive technologies: Storage and memory, imaging and display and power and battery life.
+ India: Export oriented services, consumer businesses, Internet and mobile apps, products and business services.
+ Network Infrastructure: Other people's networks, enhanced communications services, VoIP Security and QoS (Quality of service)..
+ Wireless. Mobile entertainment and rich media, off-deck and user-generated publishing. Mobile marketing and advertising.

"Disruptive technologies" means those that can bring dramatic price reductions, substantial performance improvement and the enabling of new markets. They're excited by "next gen (generation) wireless infrastructure." The opportunity is simply, "Proliferation of smart devices will drive the need to build new infrastructure." There's an opportunity to provide smaller, cheaper and more power-efficient equipment as the industry migrates to small cell sites."

I'm hearing more and more -- from Gabriel and others -- about India as "the great entrepreneurial opportunity" of this century. I'm still looking for investment vehicles in India.

Regular portfolio review: "Buy and hold" can work -- IF you review your holdings monthly. Go through each one. Have its business prospects or financials changed? Has its stockmarket price risen too fast or dropped too sharply? Has it developed any cockroach tendencies? Should I take some profit off the table or invest more money? Regular review will save surprises later. I recommend the Wall Street Journal's site for simple overview research presented in a clean, easy-to-find way.

Whatever you send by email or put on your hard disk can be found: There are no secrets in this digital world. They have people called computer forensic experts. Paid sufficiently, they can find anything -- even if you've "erased" the file. As hard drives get bigger, it's even easier to find erased stuff. There is software that will permanently delete stuff. But using that software raises red flags. The only rule is don't type anything you may regret later. That ranges from sexual harassment to insider trading, from company gossip to thoughts of revenge.

Mr. Goldberg explains his affair
Morris came home and found his wife Sadie crying.

Sadie: "You're having an affair with your secretary. Why would you do that to me? I've always been a good wife. I've cooked for you, raised your children, and have always been by your side for 35 years. What haven't I done to make you happy?"

Morris replied, "It's true, you've been the best wife a man could hope for. You make me happy in all ways but one. You never moan when we have sex."

Sadie said, "If I moaned when we have sex, would you stop running around?"

Morris: "Yes."

Sadie: "All right, come to the bedroom so I can show you how I can moan during sex."

They went to the bedroom, got undressed, and jumped into bed. As they started kissing, Sadie said, "Now, Morris? Should I moan now?"

He said, "No, not yet."

He started to fondle her and she said, "What about now? Should I moan now?"

He said, "No, I'll tell you when."

He climbed on top of her and started to move."

She said, "Is it time for me to moan now, Morris?"

He said, "Wait, wait, I'll tell you when."

A few minutes later, just seconds before he was going to finish, he said "Now, Sadie. Moan. Moan! Moan."

She said, "Oy, you wouldn't believe what a day I had..."

 
Harry Newton

This column is about my personal search for the perfect investment. I don't give investment advice. For that you have to be registered with regulatory authorities, which I am not. I am a reporter and an investor. I make my daily column -- Monday through Friday -- freely available for three reasons: Writing is good for sorting things out in my brain. Second, the column is research for a book I'm writing called "In Search of the Perfect Investment." Third, I encourage my readers to send me their ideas, concerns and experiences. That way we can all learn together. My email address is . You can't click on my email address. You have to re-type it . This protects me from software scanning the Internet for email addresses to spam. I have no role in choosing the Google ads. Thus I cannot endorse any, though some look mighty interesting. If you click on a link, Google may send me money. Please note I'm not suggesting you do. That money, if there is any, may help pay Claire's law school tuition. Read more about Google AdSense, click here and here.
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