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Why Tech Stocks Stink

Judge this sector not only by its illustrious survivors but also by the many also-rans

3 min read

Some of the world's greatest fortunes were built on the back of technology. Legions of millionaires, and the occasional billionaire, owe their all to Oracle, Apple, Intel, Google, or Microsoft. Yet you should no more judge success in tech investing by Microsoft than you'd use Mick Jagger as the gauge of a successful career as a rock musician. Microsoft is a survivor—indeed a major winner of the technology wars—as are Apple, Intel, Oracle, Google, and so it seems, Facebook. To fairly judge technology as a whole you'd have to give equal consideration to Kaypro, Wang Laboratories, Fairchild Semiconductor, Digital Equipment Corp., AltaVista, and all the other mighty fallen.

Or you could delve into the statistics, as we do in this month's The Data. It turns out that US $100 spread among the 118 tech stocks listed by Standard & Poor's in 2002 would now be worth $138, a return that barely edges out inflation. If that money had gone instead into S&P's first 118 nontech stocks as listed in alphabetical order, you'd have a 25 percent better return. And remember, this eight-year period comes after the bursting of the dot-com bubble, so it measures the tech sector not from a prior high but from a prior low. It therefore ought to show technology to its best advantage.

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Asad Madni and the Life-Saving Sensor

His pivot from defense helped a tiny tuning-fork prevent SUV rollovers and plane crashes

11 min read
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Asad Madni and the Life-Saving Sensor

In 1992, Asad M. Madni sat at the helm of BEI Sensors and Controls, overseeing a product line that included a variety of sensor and inertial-navigation devices, but its customers were less varied—mainly, the aerospace and defense electronics industries.

And he had a problem.

The Cold War had ended, crashing the U.S. defense industry. And business wasn’t going to come back anytime soon. BEI needed to identify and capture new customers—and quickly.

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