Forget About That Fast Climb Out of the Tech Wreck

Investors caught up in the exuberance of an illusory tech-stock recovery in April and May are now shocked to learn that the second quarter is lousier than even the pessimists expected. It seems that the theory of buying because things couldn't possibly get any worse wasn't so sound after all. And yet, the tech bulls -- despite EMC(EMC Quote), despite Advanced Micro Devices(AMD Quote), despite whatever bombs go off this week -- say it's now all about 2002. In 2002, they say, tech-company growth will resume, so you've got to get on board now.

An influential two-month-old report from Goldman Sachs suggests otherwise. Investors planning to plunge back into tech should consider its findings, namely that when growth does resume, for many companies it will look nothing like the growth of the golden era between 1998 and 2000 -- now painfully known as the tech-stock bubble.

I've teased Goldman Sachs for its list of "bullet-proof" companies (many since riddled with bullets) and short-lived loyalty to former investment-banking clients. But this piece of research, headed by newly anointed technology strategist Laura Conigliaro, is an important document for institutional and individual investors in technology stocks. ...