Paul Meeks is wary of the group that made him famous on Wall Street.
The investor, who was known for running the world's largest technology fund in the late 1990s, says it is the wrong time to aggressively invest money in technology.
"You have to play it as defensively as possible within the sector," said the portfolio manager of Independent Solutions Wealth Management to "Trading Nation" on Tuesday.
Meeks does not raise any basic questions for caution.
"I'm just worried about the rise in interest rates," said Meeks, who also teaches finance at the citadel. "I need to see at least the 10-year yield [treasury note] stabilize for a while."
Given the challenging environment, Meeks believes tech investors need a Plan B. His best advice is to focus on semiconductors, which he has overweighted since June 3rd. Since that move, the VanEck Vectors Semiconductor ETF, which tracks the group, is up 68%.
"I like semiconductors. A semiconductor should be relatively defensive. Strong fundamentals," Meeks said. "Everyone knows that there is an insatiable demand for lots of chips and a short supply."
His top game within the group is Microchip Technology, which he has owned for months. Since the stock has gained 10% in the past two months, he calls it a bit expensive. However, according to Meeks, this is a name to consider due to the supply chain congestion. He expects it to be well into next year.
He also prefers analog devices, Texas Instruments and NXP Semiconductors as longer-term games.
"There are opportunities there," said Meeks. "I would do that if you had to be in technology at all."
On Tuesday, the tech-heavy Nasdaq closed at 13,045.39 on February 13, around 8% below its all-time high.
Disclosure: Paul Meeks owns the stocks he recommends. He does not close shares.
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