Paul Meeks is cautious of the group that made him well-known on Wall Road.
The investor, identified for operating the world’s largest expertise fund through the late Nineteen Nineties, says it is the mistaken time to aggressively put cash to work in tech.
“You must play it throughout the sector as defensively as attainable,” the portfolio supervisor at Unbiased Options Wealth Administration mentioned Tuesday on “Buying and selling Nation.”
Meeks does not cite basic points for his cautiousness.
“I simply fear concerning the elevated rise in charges,” mentioned Meeks, who additionally teaches finance at The Citadel. “I have to see no less than the 10-year [Treasury Note yield] stabilize for some time.”
Because of the difficult backdrop, Meeks believes tech traders want a Plan B. His greatest recommendation is to focus on semiconductors, which he has been chubby since June 3. Since that transfer, the VanEck Vectors Semiconductor ETF, which tracks the group, is up 68%.
“I do like semiconductors. A semiconductor must be comparatively defensive. Sturdy fundamentals,” mentioned Meeks. “Everyone is aware of that there is a voracious demand for lots of chips, and scarce provide.”
His prime play throughout the group is Microchip Expertise, which he has owned for months. With the inventory rallying 10% over the previous two months, he calls it a bit costly. However in accordance with Meeks, it is a title to think about shopping for because of the provide chain clog. He expects it will final into subsequent 12 months.
“There are alternatives there,” Meeks mentioned. “That is what I’d do if it’s important to be within the tech sector in any respect.”
On Tuesday, the tech-heavy Nasdaq closed at 13,045.39, about 8% beneath its all-time excessive, hit on Feb. 16.
Disclosure: Paul Meeks owns the shares he recommends. He isn’t shorting any shares.