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Technology Investing: The best tech stocks for the recession

Posted February 28, 2008

“Avoiding tech stocks this time around would be a classic case of learning the wrong lesson.” — Andrew Gordon

by Andrew Gordon

Baltimore – (TFN): If you had invested $1,000 in semiconductors, you would have lost $840 in the last recession (2000 through 2002). Mobile telecoms would have made $910 disappear. And telecom companies (which encompass both mobile and fixed-line) would have stripped you of $920.

But avoiding tech stocks this time around would be a classic case of learning the wrong lesson.

In 2000, techs were at all-time highs. Their prices were absurdly expensive. The dotcom crash brought down the entire sector, deservedly or not.

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It’s different now. The tech stock index, Nasdaq, has made much less progress than the Dow or S&P 500 in making up lost ground since 2002. And tech stocks are no longer so expensive. Yet, I’d understand if you were nervous about rushing into this sector, so I have a suggestion for you: Look at telecom and semiconductor stocks from overseas instead of the U.S.

My favorite telecom stock, France Telecom (FTE: NYSE), is exceeding analysts’ expectations and had a great year in 2007. My semiconductor favorite is from Taiwan - Taiwan Semiconductor Manufacturing (TSM: NYSE). And both companies give generous dividends. These are the safest tech plays with the most upside - even with a recession bearing down on us. Find more articles and FREE recommendations by Andrew Gordon at Early to Rise.

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