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HOW TO EVALUATE HIGH-TECHNOLOGY STOCKS

High technology is the last frontier in American business.

Many of the new businesses revolve around some type of technology,

whether it is direclty computer-related, communications-related or

somehow tied in with the "Electronic Superhighway", whose arrival

we all eagerly anticipate. Although tech stocks have declined sharply

in during bear markets, they have proven to have outperform other stocks,

re-bounding more sharply in subsequent recoveries.

There are three major advantages that point to small companies:

1.) They are generally free from government regulation because

their earnings are often in a new field.

2.) The company stands to gain a lot of ground if the come up

with a unique idea. The growing market will be theirs to

dominate.

3.) The impact their earnings will have on their financial status

will be considerable... therefore a success can increase their

profitability greatly.

There are several rules to follow if you choose to be an investor in this

high risk market. Firstly, do not be fooled by the size of the company.

It is important to investigate the high-technology expertise of the firm

and secure that it is a meaningful part of the firm's business.

Secondly, it is vital that the company is serving a current social need

in the marketplace.

For example, cable was first intro-duced in the 1960's and interested

investors long before it could draw subscibers.

Look for companies that are operating in the black. Companies that offer

teriffic scientific break-throughs but operate at a deficit are just too

risky. It is also important that you ignore market indexes. Companies with

technological superiority are not tied to a stock mar-ket environment over

time.

Lastly, keep current on all technological innovations. Buy trade magazines

and read scientific papers and investment guides that deal with technology

and technology-related fields.