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Technology is an incredibly large and diverse sector, and so advice that makes sense for investing in, say, chip companies might not hold for consumer internet or enterprise software firms. That said, both investing and business-wise, tech in general is different from other major sectors, and a lot of it has to do with the roles that continual change, fast growth and product and service ecosystems play in shaping it.

To be more precise, tech is a sector where:

    The products and services offered by companies are constantly changing, in part due to technology advances.

    Successful companies and businesses often see tremendous growth in a short amount of time, and are priced based on expectations of strong future growth.

    The creation of ecosystems with large moats often shape the fortunes of companies large and small.

    Those unique traits, along with a few others, arguably make it possible to provide some general advice on investing in tech. My list of things to remember includes the following:

    1. Accept that irrational fear and exuberance are facts of life.

    Tech is a sector where companies, products and technologies often get hyped to the moon; predictions of doom are normal for companies seen to be on the wrong side of big trends; and customer spending habits can change drastically in a short amount of time. As such, it's naturally one where emotions often get the best of even well-informed investors.

    The dotcom/telecom bubble remains the penultimate example of irrational exuberance in tech, but there are some pretty good ones from the last few years as well. For example, there's GoPro Inc.'s (GPRO) - Get Free Report big 2014 run-up, the huge 2015 gains seen in cybersecurity stocks following major data breaches and the late-2016/early-2017 surge in optical component stocks.

    Cases of irrational fear aren't hard to find, either. Think of Micron Technology Inc.'s (MU) - Get Free Report early-2016 decline into the single digits amid a DRAM industry downturn, VMware Inc.'s (VMW) - Get Free Report fall into the $40s due to worries about declining server virtualization software sales (though other businesses were looking much better) or Etsy Inc.'s (ETSY) - Get Free Report tumble to $7 amid fears that Amazon would devour it.

    As Aldous Huxley once said, facts don't cease to exist just because they're ignored. Very simple advice, but it's worth repeating to yourself when fear or hype are running wild. No, GoPro's strong quarter didn't mean an action camera maker should be worth $10 billion, nor did Micron's bad quarter mean a consolidated DRAM industry would keep losing money forever. And so on.

    2. Remember that uncertainty creates opportunities.

    Humans beings on the whole are risk-averse creatures. It's why stocks have outperformed bonds over most extended timeframes. And it's also why worries about lingering risks can seriously depress a company's shares, even if a close look at the situation suggests that the odds of a favorable outcome are pretty good.

    This seems to happen more in tech than in many other sectors, partly due to the dynamism of the space. Consider Facebook Inc.'s (FB) - Get Free Report 2012 decline into the teens on fears about its ability to monetize mobile usage, which seems quaint now. Or how Netflix Inc.  (NFLX) - Get Free Report shares lost over half their value in 2011 as the Qwikster fiasco led investors to fear the company wouldn't regain the trust of angered customers. There's also how AMD Inc. (AMD) - Get Free Report  shares traded at rock-bottom multiples in 2015 and early 2016 due to liquidity/bankruptcy fears, even though both its product roadmap and game console design wins suggested survival was likely.

    In situations like these, perspective is paramount. Remembering all the things a company has going for it, and why they make a worst-case scenario unlikely, can pay off in spades down the line.

    Jim Cramer and the AAP team hold a position in Facebook for their Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells FB? Learn more now.

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    Editors' pick: Originally published Sept. 21.

    3. Big tech trends are often overhyped in the short-term, and underhyped in the long-term.

    As of 2005 or even 2010, dotcom bubble-era predictions about e-commerce doing major damage to traditional retail must have (outside of a few markets such as books and DVDs) looked absurd. And the TV industry must have felt the same way about dotcom-era predictions concerning the impact of online video. Similarly, as of the end of their company's fiscal 2010, BlackBerry Ltd.  undefined execs must have felt that the threat posed by the iPhone and Android phones had been overblown, seeing as BlackBerry's sales had risen nearly five-fold from fiscal 2007, its last iPhone-free year.

    Major tech trends often move slowly in the first years after "groundbreaking" new products or services are unveiled. Reason being, it often takes longer than expected for a compelling technology or concept to become cheap, reliable, scalable and/or feature-rich enough to fulfill the hopes of its early promoters. And it can also take longer-than-expected to change longstanding consumer and business habits. Virtual reality and autonomous driving are two well-hyped present-day trends for which such speed bumps seem likely.

    However, once all the groundwork is finally in place, the amount of disruption caused in a short amount of time can be pretty jarring. Just ask BlackBerry, whose fiscal 2018 sales are expected be less than one-third of fiscal 2017 levels.

    4. Valuations matter, but so do growth rates and investment plans.

    Although ignoring a company's sales, earnings and free cash flow multiples is obviously foolish, setting hard rules on what multiples you're willing to pay, while ignoring context, can lead to some big missed opportunities. At the end of 2014, for example, Facebook traded for 42 times 2015 analyst EPS consensus estimates of $1.92; since then, shares have more than doubled amidst a long string of stellar earnings reports. Similarly, Google finished 2005 trading at 58 times its 2006 EPS consensus, and its shares are up over 350% since. And Netflix and Amazon, of course, have long sported eye-popping EPS multiples due to a general indifference to near-term profits.

    For fast-growing companies, it can help a lot to try to look at what a company's sales or EPS might be several years from now, rather than in just one or two years, albeit keeping a margin of error to account for the risk that things won't go exactly as planned. And when one is looking at near-term earnings and cash flow for a company making huge investments, it's worth asking what those numbers might look like if its investment pace was different.

    5. There's no substitute for good management.

    Warren Buffett's old adage that one should invest in a company an idiot can run because sooner or later one will doesn't work well in much of tech, given how dynamic many industries are and how competent (if not brilliant) those running the best companies within them tend to be. Twitter Inc.'s (TWTR) - Get Free Report platform is a de facto monopoly and remains very unique, but inept product execution in a digital media landscape featuring well-oiled juggernauts such as Facebook, Instagram, YouTube and Netflix has led to flatlining user growth. In the past, eBay (EBAY) - Get Free Report and BlackBerry also qualified as companies that couldn't be trusted, both because of how they're run and who they're up against.

    On the flip side, it's hard not to give some big tech names a premium on account of having superb leadership, the resources to invest in big new opportunities and the willingness to pull the trigger. An investment in Facebook or Amazon isn't just an investment in the companies' existing businesses, but a wager on the ability of Mark Zuckerberg and Jeff Bezos (and their lieutenants) to create substantial new businesses down the line.

    6. Be wary of attempts to challenge industry leaders with big scale and/or ecosystem advantages.

    Microsoft poured billions into trying to turn Bing into a credible rival to Google Search, but Google's mindshare, R&D budget, search data, advertiser base and mobile footprint made this a lost cause. Similarly, iOS and Android's mindshare and developer bases made Windows Phone a futile effort.

    Verizon (VZ) - Get Free Report , VMware (VMW) - Get Free Report , HP Enterprise (HPE) - Get Free Report and several other big enterprise tech and telecom firms all tried to challenge Amazon Web Services (AWS) and Microsoft Azure in cloud infrastructure before thinking twice in the face of the two firms' superior scale, feature sets and developer ecosystems. And 2017 has seen both Walmart (WMT) - Get Free Report and Google effectively shutter their Amazon Prime rivals after realizing that Prime's selection and feature set meant that they needed to come up with other ways to battle Amazon.

    Some of the aforementioned companies executed better on their attempts to take on a dominant platform. But ultimately, they were all bringing knives to a gunfight.

    7. A focused, well-run, smaller company will often outperform larger companies involved in many businesses.

    If a larger tech company can't lean on strengths such as its brand, scale and ecosystem to quash upstarts, then an upstart that's able to differentiate its products and is focused on a limited set of offerings could very well execute better than a larger but less focused rival.

    The ability of next-gen firewall vendors Palo Alto Networks (PANW) - Get Free Report and Fortinet Inc. (FTNT) - Get Free Report  to take share from Cisco Systems Inc. (CSCO) - Get Free Report and Juniper Networks Inc. (JNPR) - Get Free Report is a good case in point. So is Arista Networks' Inc.  (ANET) - Get Free Report ability to take share from Cisco in data center switching. In the enterprise software realm, cloud CRM software leader (CRM) - Get Free Report and cloud HR/financials software leader Workday Inc. (WDAY) - Get Free Report  have taken share from Oracle Inc. (ORCL) - Get Free Report and SAP SE  (SAP) - Get Free Report , each of which support a wide array of cloud and on-premise products. And with the help of the ecosystem it has built up, Box Inc. (BOX) - Get Free Report has fought off the launch of rival enterprise cloud file-sharing platforms from Microsoft, Amazon and Google.

    There are plenty of other examples, such as the pre-merger Broadcom's ability to fight off challenges from Intel (INTC) - Get Free Report , Yelp's (YELP) - Get Free Report ability to fend off Google and Square's (SQ) - Get Free Report ability to hold its own against NCR and PayPal (PYPL) - Get Free Report . Though the presence of a rival with much deeper pockets generally shouldn't be taken lightly, some of these threats are much less serious than others.