Investor Paul Meeks is bracing for a bear current market in technologies.
Meeks, who’s recognized for operating the world’s premier tech fund in the course of the dot-com boom, sees 20% pullback pitfalls escalating as the coronavirus outbreak spreads.
“There is some comeuppance owing, and regretably I imagine the coronavirus is that exogenous variable that is a catalyst to choose some of these shares down,” the portfolio supervisor at Independent Options Wealth Management explained to CNBC’s “Trading Country” on Friday.
The major indexes finished the week meaningfully decrease just after a collection of new coronavirus cases sparked clean problems over a world wide economic slowdown. Tech shares led Friday’s sell-off. The Nasdaq experienced its worst each day performance considering the fact that last month.
Meeks, who has been preventing the house, indicates Friday’s exercise may well be the suggestion of the iceberg.
If the outbreak is not contained before long, Meeks believes the following major tech provide-off could be lengthier and deeper than his primary prediction almost a year in the past.
Previous April, he warned on “Trading Country” the tech rally experienced long gone too much, much too fast and he has been singling out Apple. He continue to owns the Apple iphone maker’s inventory, but as an underweight.
“Apple is grossly overvalued,” explained Meeks, who has $700 million in property beneath administration.
Meeks might have a discouraging forecast, but he’s not predicting a economic downturn.
“The fundamentals are strong in tech,” he included. “They are much better relative to the rest of the sectors within just the overall economy.”
‘I’d be shopping for with both equally hands’
If massive tech has a spectacular fall equivalent to the fourth quarter of 2018, Meeks indicated he’d head again to the team that designed him well-known.
“I’d be obtaining with both equally palms,” he mentioned.
Meeks would focus on semiconductors, specifically Lam Exploration, Nvidia, Superior Micro Equipment, Micron and Applied Resources.
“I’m most bullish on the semiconductor and semiconductor capital products firms,” Meeks said. “You’ve had some firms that have presently reported their final results. So, we have some thoroughly clean and new data.”
Disclosures: Paul Meeks owns shares of Apple, Lam Investigation, Nvidia, Advanced Micro Devices, Micron and Applied Products.