In part one of our interview with Alex Daley of Casey Research, the analyst spoke about the importance of investing in growth when it comes to looking for the best technology stocks.
Overall, he suggested that while new technologies can be interesting, they can take longer than expected to get to market. In that light, it's often better to focus on a company's revenue graph rather than its underlying technology.
In part 2 of his interview with the Investing News Network, Daley spoke a bit more about why investors need to be careful when looking at new technologies while searching for the best technology stocks.
"Technology investors have to learn to separate the difference between science and technology. those are two very different things," he said. While new technologies can be interesting, Daley noted that "turning that into a practical technology that’s cost effective, that can go to market competitively and that people will adopt at scale, that's what takes time."
"As an investor, the science is interesting, but its the growth that you want to buy," he said. Certainly, that's a key point for those on the lookout for the best technology stocks.
Daley also spoke about the "hype cycle," coined by Gartner, in which a spike in excitement for new technology is followed by a "trough of disillusionment," and then by a slower slope upwards as mainstream adoption increases. Understandably, Daley said that the far side of the hype cycle was most exciting.
"I think the most exciting area of technology to be is wherever other people aren’t excited," he said, adding that it was especially key to keep an eye on what was exciting three or four years ago. Daley explained that he does "follow everything," but for the most part, that's just to find out what people stopped listening. Specifically, he pointed to Bitcoin and 3D printing as sectors that could become interesting again soon.
Certainly, those on the hunt for the best technology stocks will want to place their attention where Daley is looking, on the other side of the hype curve.
