View from the Observation Deck

1. The S&P 500 Information Technology Index posted a price-only return of 151.5% (159.6% with dividends) from 3/9/09 (end of bear market) through 4/2/12, according to Bloomberg.
2. Technology stocks outperformed broader market indices. The S&P 500 gained 109.8% (123.7% with dividends), while the more risky MSCI Emerging Markets Index returned 115.9% (132.3% with dividends).
3. We believe that investors' perceptions of technology stocks changed after the Internet bubble burst in March 2000. Many investors lost money, and some naturally felt confused about what had transpired.
4. The technological advances that created the euphoria surrounding the Internet Revolution came to fruition. We see those advances at work today in the 3G/4G mobile devices we use.
5. These advances help boost worker productivity. Our reliance on high-tech consumer products has reached a point where they could arguably be deemed staples in our lives.
6. The S&P 500 Information Technology Index's 2012 estimated earnings growth rate was just raised from 15.8% to 17.1% by Standard & Poor's – the highest of the 10 major sectors in the S&P 500. The S&P 500's is 8.8%.
7. What makes the story compelling is that technology stocks are selling at a P/E multiple of 13.54 based on 2012 estimated earnings and 11.98 based on 2013 estimated earnings. Tech P/Es topped 30 when the bubble burst in 2000.