Friday, November 11, 2011

Dominant Theme Investing

To identify and ride a dominant theme is the best way to generate above average returns for at least a 10-yr home run. In the mid 1980’s we had the likes of Walmart, Microsoft and Intel all 1000% winners. In the mid 1990’s the financial and energy stocks began to run and in 2003 the commodity sector took off.

Not all dominant themes pan out such as infrastructure and alternate energy

A new dominant theme is now just getting underway – an “echo” or global technology boom. The first tech boom ran from 1985 to the bust of 2000 and was confined to the English speaking counties. The new global tech boom will be enjoyed by the survivors of the first tech boom and bust.

Technically after a bubble a long congestive secular period will follow in order to repair the damage. Usually there are three bull and bear cycles that span a total of about 12+ years – much like the 1968 – 1980 secular down period. The fourth cycle is usually the breakout cycle. Watch for Cisco Systems to finally break out and up from here – note the new 4th cycle


Piazzi said...


what is your take on Canadian banks

they have been underperforming and look weak below 200-day

also, any opinion on BMO's covered called bank ETF, ZWB?

many thanks said...

Hi Piazzi

I think the CDN banks are a steal at these levels

I would avoid covered writing because you lose the stock when it goes up - just the time you need to own it

Bill Carrigan