By coinnews 
00:00 Speaker A
As we continue to see an uncertain market environment, my next guest has some tips to help investors position defensively. Joining me now we’ve got Walker Williams, Ledo Advisors, Private Wealth Management, Chief market strategist. Good to have you here with us. And you say that tech could become a defensive sector during a growth slowdown. How should investors position themselves within the sector right now?
00:27 Walker Williams
You know, I think that this is a great point. We have a transformational potential tailwind happening in the technology sector as we all know, artificial intelligence and its implications from an investor standpoint and a market standpoint are really something to take pause and think through. You know, when we’re looking at the markets and as a whole right now, there’s some headwinds. You have tariff pressures, you have slowing economic growth and valuations are high. However, when we look at the tech sector specifically, we do see the opportunity to position there with some sort of valuation discipline to typically in software companies where they do have an AI intent or tailwind behind them. We think that trend over the long term is going to pose opportunities and some resilience in a pullback.
01:51 Speaker A
And so, within the tech sector right now, as you’re thinking about some of the prevailing themes that are not just AI, but also trying to understand how there’s going to be continued capital expenditure that investors should be evaluating and seeing how those dollars that companies are putting forward in earmarking, how that pays off over time. What is the timeline that they should be grading these companies on?
02:55 Walker Williams
You know, I think it’s a great point of timeline. It’s like, you know, you’re never wrong, you’re just early. Sort of a joke. But I think when you’re looking at capex and how quickly things are moving, typically those programs are years in the making. There’s another dynamic happening right now and I I’m going to say currency, right? Because a lot of the capex is domestic and international. So, how does the dollar, for example, the Taiwanese dollars appreciate? The Japanese yen has appreciated it. You know, earnings guidance is pivotal for this because you know, Nvidia is reporting today. That’s great. I’m more curious about what they’re going to say from a manufacturing perspective and if they’re slowing down capex or things of that nature because it is really a global economy. Now, does that make the costs go up? What implications does that have? Now, you know, innovation is innovation, right? Last week’s innovation could be next weeks or could not. I think we need to judge this trend over the long term. You know, three to five years going forward. If we go back in time to the original internet bubble of 2000, 2001, some of those innovations happened quick. Some were like transformation over the next five, 10, 15 years. And if you think about it, you know, if we go back to 2000, right? We would probably agree the internet’s a thing. We didn’t have an idea of how it would affect our lives today, right? And if we’re thinking about, you know, various things in text, capex, artificial intelligence, we all agree is definitely something and it’s a tailwind, but the implications for daily life and how it would affect things from a standpoint of capex, software development, investment, jobs, things like that. That’s going to take years and years to to to slush out. So you look at the capex plans and how they’re working, I think you need to have a three to five year timeline on those and especially coming up, watch what the companies say when they report. Especially with capex, especially with the global supply chain, especially with tariffs and how they go it. But at the end of the day, given where the markets are, quality matters. It sort of back to the future, the old disciplines. What’s your debt level? How much is your cash flow? What is the valuation? What is your game plan? It’s sort of, you know, dust off the old game plan and stick to it. Not just in tech, but in other sectors, quality matters because quality gives companies the luxury of options and flexibility in a dynamic market.
07:40 Speaker A
And so, in the kind of spectrum or or range of companies in the tech sector, from most defensive to least defensive, where are the most defensive plays for the portfolio?
08:01 Walker Williams
You know, honestly, if you’re looking at spend, the software companies like from the standpoint, software’s a service, software development, that are exploring AI technologies, you know, are very much defensive. There’s constant innovation constant from that standpoint. As a whole, I do have to say this. Things look expensive, especially with idents pulling down. And this is why with tech, a long-term view is best, right? It’s sort of you’re sitting here and looking at the long term and the implications with this. You know, there are companies that are just expensive but you have to look at what they’re doing and their thesis. You know, obviously there’s chip manufacturers, different things. Companies that drive strong recurring revenue back to discipline, and especially exploring things are where I would spend time.
09:16 Speaker A
Great to have you here with us in studio. Thanks for taking the time.
09:20 Walker Williams
Well, thank you for having me.