Why are Tech Stocks Kicking Butt Amongst all the Fiscal Cliff Drama?

This is a guest blog from Rachel Fox, successful young stock trader, actress, and head blogger for Fox on Stocks. She recently provided Stockerblog.com with an extensive interview about stock trading. Check it out.

Why are Tech Stocks Kicking Butt Amongst all the Fiscal Cliff Drama?

In the stock market, nothing is ever true straight across the board. While there are some exceptions to this pattern, I’m seeing a ton of technology stocks doing well. While other stocks are falling because of the Fiscal Cliff, pumping and dumping and going crazy, over the past month, many tech stocks are dodging the bullets and doing just great.

Take a look at these numbers:

Facebook (FB): Up more than 18% over the last month, quite surprising after the post-IPO lock up expired on November 14th.

Yahoo (YHOO): Up more than 25% over the last 3 months, while the S&P dropped 3% over the past 3 months. Go Marissa!

Research in Motion (RIMM): Up more than 53% this past month. Sounds like a cheesy lounge night club.

Zynga (ZNGA): Up more than 4% this past month

They all happen to be in the technology sector and have all out performed the market by a very nice amount.

Q: Why did this happen?

A: Matt Gohd, senior managing director at WallachBeth Capital says, “Find a group of stocks that everyone hates, that are down significantly, and buy them,"

This seems to be what happened here. These technology stocks had been beaten down so much and had such low expectations, that when the tiniest piece of good news came out, the result was a nice bump in the stocks price.

What’s the moral of the story?

Even in troubled economic times, you can buy and sell stocks and make money. You may have to look to unpopular or downtrodden stocks to pick your Long Buy position, but those opportunities to make money are always there.

Check out the Rachel Fox interview about stock trading.

Funds that Own Facebook Stock

It is now much harder for the wealthy to buy shares of Facebook in private transactions. SharesPost, one of the leading marketplaces for non-publicly traded companies, just announced that the company "will cease facilitating transactions in Facebook stock as of Friday end of day to help ensure the company's orderly transition into the public markets." This was done at the request of Facebook.

Yet, investors both big and small still have an opportunity to acquire shares indirectly, by buying stock in funds that own shares of Facebook. The options are mutual funds, which are priced once a day based on the net asset value, or closed end funds, which trade on exchanges all day long just like a regular stock.

WallStreetNewsNetwork.com has turned up two closed end funds that own shares of Facebook, on its free list of Facebook Stocks. One of the CEFs is GSV Capital (GSVC), which specializes in investing in venture capital backed private companies. The company name comes from Global Silicon Valley Capital. It owns a fairly diverse portfolio of innovative businesses, such as Bloom Energy, Dropbox, TrueCar, Twitter, and even SharesPost. It also owns a couple companies that have recently gone public, including Zynga (ZNGA) and Groupon (GRPN).

But most important, according to the company's fourth quarter Schedule of Investments as of December 31, 2011, there are 350,000 Class B common shares on the books at a cost of $10,465,981. The holdings represent 14.63% of the company's portfolio.

In the last three months, the GSV share price has risen from around 14 per share to 20 currently, an increase of 42%. Yes GSV has yet moved as much as another CEF that owns Facebook, the Firsthand Technology Value Fund (SVVC), which has increased in price from less than 15 per share to almost 37 today, a boost of 60%. It actually traded above 40 a couple days ago but had a pullback.

In terms of mutual funds that own Facebook stock, the T. Rowe Price Media & Telecommunications Fund (PRMTX) has approximately 1.2% of its portfolio in Facebook shares, a fairly small percentage compared to the closed end funds.

To see a list of over 25 of the companies that own Facebook stock, check out the free list at WallStreetNewsNetwork.com, which can be downloaded, sorted, and updated.

Disclosure: Author owns GSVC and SVVC. No recommendations of any of the above stocks is expressed or implied.

By Stockerblog.com