Sometimes, even veteran investors disagree on where a particular stock -- or an entire stock market sector -- is heading.
In this clip from "The Rank" on Motley Fool Live, recorded on Jan. 31, Fool.com contributors Jason Hall and Dan Caplinger, joined by Matthew Frankel, CFP®, lay out their thoughts on the future of information technology for both the short and long terms.
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Matt Frankel: So next is information technology. I will let Dan and Jason quickly battle this out because Jason ranked this No. 1 and Dan ranked this No. 7. Dan, why don't you go first on this one? Why are you not a technology bull right now?
Dan Caplinger: This is my downside mean reversion argument. I think that we've seen some pullback in technology. There's always a tendency to think that that's just going to be a momentary drop because we've seen momentary drops get reversed very quickly in the recent past. My own macro view is that I think we're due for a correction that doesn't reverse itself in months. I think that 2022 has the potential to be a lousy a year. In a lousy year, I think information technology is the most likely to drive it low. That said, it still has all the growth potential. That's why I put it middle of the pack in No. 7 rather than putting it way down at the bottom.
Jason Hall: Yeah. For me, I think it's looking at the long term. Again, the tailwinds you think about. Every company is a technology company. We've talked a little bit about that and that's one thing that makes the sector arguments so difficult when you talk about Amazon as a consumer goods company versus a tech company. It's both, the lines are blurred. I think if you look at Apple and say the same thing, it's certainly a tech company, but it's the most powerful consumer brand on Earth. That's as much of a value because of its product, is anything about it being an innovator.
Let's be honest here. Wasn't the first company with an MP3 player, wasn't the first company with a smartphone, wasn't the first company with a tablet, it's great evidence that you don't have to be first to market, but if you're best to market, and you have a great product that people love, that's the key. But it's still considered a tech company because it does innovate.
I think about the biggest trends. You think about artificial intelligence. You think about the metaverse, that's just a fancy way to describe augmented reality and virtual reality. We're starting to see commercial value of those technologies. That's going to proliferate even more, I expect. There's so many things happened with the way companies choose data there's new technology that's driving how they use it. I think we're going to see an acceleration of the proliferation of things like AI, and there's a lot of companies that are involved in it. They're going to do really well and they are going to help companies be more profitable and increase margins. Those companies are going to directly benefit, so I think it's going to continue to be an outperformer.
