Skipper Sees Another Year of 'Tough Sledding' for Big Tech

Cisco was less exposed to that. You can say that Cisco was lucky in this regard, but the reality is, they're taking advantage of that good fortune.

I'm of the view that when the market bottoms and starts back up, you want to start out by owning the most-liquid, best-known things. That's where the money goes first. And it eventually broadens out.

In this first phase, you want to own companies like Cisco and Microsoft. We own both of those companies. There are reasons why we don't own Oracle and SAP. We think valuations relative to the prospects for the coming year aren't right. Dell is somewhere in between. The stock is OK, and it's a great company. You can't get a more appealing fundamental situation.

Hewlett-Packard(HWP Quote) may work as a stock over the coming year because they can make the numbers work. But, boy, are they going to give up a lot of market share. Heck, they've already given up a lot of market share.

5. You have mentioned recently the disparity between large-cap tech stocks and smaller-cap tech stocks. Is this still the case, and do you think the small-cap and mid-cap tech companies will represent a better opportunity?

It's less [of a disparity] since October because you had a great bounce across the board in the little ones.

I think inevitably over the course of the cycle, the smaller guys will be a better opportunity. The problem with the big companies is they're at some level an index. Also, technology has gone from 4% of the economy to 10% in the course of 20 years. And it won't go from 10% to 20%. It'll go to 12% or 14%. That'll be great, but it will be a lot better for smaller companies.

Here's the problem: In the public markets, you have to be a stock picker. I think the average tech company is going to underperform the market over the next year or two. But, again, the standard deviation is going to be really high. If you can pick someone with a really good product cycle, you're going to do great, just as you did in 2002.