Every Investor's Guide to High-Tech Stocks and Mutual Funds: Proven Strategies for Picking High-Growth Winners

Why Buy Technology? Economies usually evolve slowly, but from time to time they go through a rapid, wrenching change that creates massive new opportunities at the same time that old structures are destroyed. Each of these revolutions is caused by the emergence of a new underlying economic driver and brings with it new infrastructures that change society. We are living through one of those major changes right now, and it is creating once-in-a-lifetime opportunities to build new wealth. When you are living through it, it can be hard to put it in perspective. But ten thousand years back, your great-great-great-great-granddaddy was a hunter-gatherer. The economic driver was meat protein. Always on the move, taking food and shelter as it came along, he rarely deferred current consumption to make investments that would pay off in the future. Not that there were many investment choices. Great-granddaddy and his mate may have smoked or salted meat to save for the winter, but that was pretty much the limit of their ability to invest for the future. They didn't build wealth, and there wasn't much of an infrastructure--animal trails through the woods were about it. Then--paradigm shift!--life evolved to an agrarian society where your great-grandparents8 farmed the land, saved seeds for next year's crop, developed water systems, and built houses. Towns grew up to market crops and provide a center to buy supplies. The agrarian society lasted for thousands of years--until three hundred years ago, give or take. What drove wealth building in this new society was land and crops. If you owned land, you were wealthy. If not, not. The enabling technology was pretty much hand tools and horses. The infrastructure was dirt roads and couriers on horseback. The United States was discovered and settled toward the end of this period. Having a limitless supply of land, lots of water, and not many regulations, the pioneers grew great wealth rapidly. (Hong Kong did the same thing over the last fifty years on only 400 square miles, so we know that land isn't the issue anymore.) Then came the industrial revolution, driven by cheap steel and a flood of new inventions. Wealth grew in steel, industrial machinery, coal, and transportation. The infrastructure changed to railroads, shipping, and the telegraph. The important economic indicators changed to coal, iron and steel production, patent applications, and railroad operating income. Great family fortunes were built in these new areas; names we still know like Morgan, Bessemer, Vanderbilt, Astor. Although investors still could make money buying and selling in the agrarian economy, it was much easier to get the wind at their backs investing in the new areas, side by side with the entrepreneurs. But they weren't dubbed "entrepreneurs" in those days. They were called "robber barons." After World War I, the United States and most of the developed world shifted to mass production and consumer-based economies, thanks, in some measure, to Henry Ford. The economic driver changed to cheap energy--especially oil. The middle class grew faster, with enough income and an enabling technology (the automobile) to move out of the noisy, polluted cities. They did not have to live within walking distance of the factory anymore. The growth inMurphy, Michael is the author of 'Every Investor's Guide to High-Tech Stocks and Mutual Funds: Proven Strategies for Picking High-Growth Winners' with ISBN 9780767904568 and ISBN 0767904567.