What to do?
Truly, an investor needs to have some courage when buying technology shares. For example, I couldn’t ignore the allure of Silicom Ltd. (NASDAQ:SILC)’s financials. Since buying about one year ago, the company has increased in price by about 125%. Maybe this was luck, but when a company has consistently performed and has regularly taken its niche to the next level, the chances of making a profit are likely in a bull market. Silicom has continually proven its ability to dominate the networking servers and components sector. What’s more, the company has reported it’s never lost a client. If that’s not an indication of what’s to come for this company, I don’t know what is.
Would Buffett take a chance on a technology stock when all the numbers lining up? Probably not, and certainly not a small cap. While I am too wary to buy into Microsoft Corporation (NASDAQ:MSFT) and Apple Inc. (NASDAQ:AAPL), I still see big things ahead for Silicom even though there is potential for this little guy to be eaten up by the big fish. And that’s a scary proposition. But in a market full of unknowns, all an investor can do is make an educated guess. Usually, it works out.
Phillip Woolgar owns shares of Silicom. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple and Microsoft.
The article Is Technology Too Difficult to Understand? originally appeared on Fool.com.
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