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Over the last two years we've talked many times about how to make money on high-tech stocks.
But that doesn't mean you can blindly invest in just any tech stock. To ensure that you make money in the long run, you must avoid losses in the short run.
Today, I'm going to show you how to protect your portfolio's value by dodging stocks with "Loser" written all over them.
Specifically, I want to talk with you about a mega-cap tech firm that you need to steer clear from.
In fact, this firm violates a key rule of my five-part wealth-building strategy…
Big Black and Blue
I have read numerous stories about the turnaround underway at International Business Machines Corp. (NYSE: IBM) over the last several years.
There was another spate of positive stories last week after IBM reported first-quarter results that beat Wall Street's earnings estimates.
While I'm glad to see the company making progress, I still see a lot of problems ahead. After all, the first quarter also was the 12th consecutive one in which IBM suffered an annual sales decline.
"You can't cut your way to growth."
I know this area well, having served as a strategic advisor to a turnaround investment banker. I've seen firsthand just how much money you can make on turnarounds – if you pick the right one.
IBM is not the right one.
Virginia Rometty has spent her entire three years as IBM's CEO trying to right a listing ship.
And she has made some good decisions, like getting IBM to focus more on Big Data. That's a new field that involves using massive computing power to comb through mountains of raw data to find key patterns, such as spotting online fraud among billions of e-commerce transactions or improving efficiencies at warehouses and factories.
Rometty also has steered IBM more toward cloud computing, a trend in which vendors host data and applications for their clients at remote server "farms" and deliver it all over the Web.
About the Author
Michael A. Robinson is a 35-year Silicon Valley veteran and one of the top technology financial analysts working today. He regularly delivers winning trade recommendations to the Members of his monthly tech investing newsletter, Nova-X Report, and small-cap tech service, Radical Technology Profits. In the past two years alone, his subscribers have seen over 100 double- and triple-digit gains from his recommendations.
As a consultant, senior adviser, and board member for Silicon Valley venture capital firms, Michael enjoys privileged access to pioneering CEOs and high-profile industry insiders. In fact, he was one of five people involved in early meetings for the $160 billion "cloud" computing phenomenon. And he was there as Lee Iacocca and Roger Smith, the CEOs of Chrysler and GM, led the robotics revolution that saved the U.S. automotive industry.
In addition to being a regular guest and panelist on CNBC and Fox Business Network, Michael is also a Pulitzer Prize-nominated writer and reporter. His first book, "Overdrawn: The Bailout of American Savings" warned people about the coming financial collapse - years before "bailout" became a household word.
You can follow Michael's tech insight and product updates for free with his Strategic Tech Investor newsletter.