Tech stocks tend to have a lot of positive attributes right now.

• They have high quality balance sheets.

• They are sitting on a ton of cash and have the balance sheet space to weather almost all possible storms.

• They have the ability to sustain their cash flow generation.

• They tend to have low debt levels.

• They will benefit the most as we migrate more and more to a digital based economy.

These key features have resulted in Tech stocks being able to sustain earnings growth, while most other areas are currently in an earnings down cycle, as shown below.

Global Markets Earnings

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Global Markets Earnings

Yet, even Superman had his kryptonite.

• Out of the top 20-or-so largest equity markets in the world, the tech heavy NASDAQ currently offers (i) the lowest earnings yield and (ii) the lowest dividend yield. See below.

• In addition, the current forward P/E ratio of 35 makes now the most expensive at any point since 2003.

• In short, the attractiveness of Tech has unquestionably diminished on an absolute and relative basis.

Like many of you, I have been a HUGE Tech advocate. Yet, at some point, we have to accept the growing number of concerning blemishes.

Earnings Yields and Dividend Yields of Major Equity Markets

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Earnings Yields and Dividend Yields of Major Equity Markets