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Bear markets may destroy market value and some weaker companies may fail, but for those that survive the carnage, the pot of gold waiting at the end of the rainbow can be quite substantial.
In fact, the collapse in price during a bear market allows astute investors to establish positions at deep discounts to long-term value. In a bear market, the intense focus on the short term often pushes prices beyond what is justified in that moment in time.
Remember, the value of a stock is a discounting of future cash flows. The mistake investors make during difficult times is to assume that those future cash flows will be at recessionary levels forever.
That is hardly the case. The business cycle is not dead. In fact, the opposite is true.
In contemplating the next economic expansionary period, investors would be wise to pay close attention to the technology sector. Technology is often at the pincer of any economic recovery, and stocks in the group tend to outperform the greater market as a new bull cycle takes hold.
Given that this recession has been and will be longer and deeper than what we have experienced recently, those technology companies that survive the bear will be in a prime position to generate big profits in the future.
Here are five technology leaders that have withstood the bear and are poised to thrive going forward…
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