67 WALL STREET, New York - December 30, 2013 - The Wall Street Transcript has just published its current Investing Strategies Report. This special feature contains in-depth interviews with highly experienced Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Small Cap Investing - Upside in Small-Cap Stocks - Contrarian Approach to Investing - Quality of Business - Investing in Tangible Assets - Value in Emerging Markets - Cash-Flow-Oriented Global Companies - Turnaround Situations in Small and Micro Caps
Companies include: Long Term Technology Stock Winners
In the following excerpt from the Investing Strategies Report, an experienced technology stock portfolio manager discusses his methodology and top picks for 2014:
TWST: Give us a bit of background on Techinvest.
Mr. McCarthy: The company has been around more or less since the mid-1980s. Originally it was primarily a publisher of an investment newsletter covering the U.K. technology sector. It built up a pretty good track record for its recommendations through the years and obviously fully participated in the high-tech boom and some of the crazy stuff that went on at the very end of the 1990s and the beginning of the current century.
After the bear markets that followed the 1999-2000 high tech boom, we set up a fund to invest in tech stocks. Now we are better known for our funds than for the newsletter, even though we continue to publish the subscription newsletter a once a month. The newsletter primarily covers the London market tech stocks, but our fund has 70% investors in North American tech stocks, primarily at the smaller end of the spectrum.
TWST: Why did you decide to focus on the tech sector?
Mr. McCarthy: The reason for that is I'm an engineer by background, and I basically worked in the industry for several decades before devoting myself full time to fund-running activity. That required a much more intensive day-by-day relationship than a once-a-month newsletter. I was working primarily in the telecommunications industry, including a period with the Irish end of AT&T. I had worked in Canada a long time ago as well with Ottawa's Northern Telecom.
Particularly on this side of the Atlantic, at the time there didn't seem to be any clear understanding at all of the dynamics that lay behind the companies in the technology sector, and in particular shares in the companies in the technology sector, so there were gaps there. I already had an interest in the stock market from the few years I had spent in Canada, and I had done some finance-related courses at McGill University in Montreal.
TWST: You also have a Special Situations fund. Tell us a little about that.
Mr. McCarthy: We do have a Special Situations fund. That is a much smaller fund, and it is solely focused on stocks in the London and the Dublin markets. It includes stocks of all types, but there is a fair sprinkling of very small tech stocks in that fund as well. Then sometimes we come across a stock in the tech part of the world that is really too small for our fund for the main newsletter perhaps, but we put it into the Special Situations fund, which is as I said a much smaller fund. Roughly 25% of the holdings in the Special Situations fund would be very small tech companies. They would be only companies on this side of the Atlantic. We don't make any effort to give coverage to North American stocks in that fund.
TWST: What are some of the trends you are seeing in the tech space right now?
For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
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