Google, Apple, Microsoft: Best Tech Bet For 2014

12/12/13 11:04AM EST

Google Apple Microsoft Best Tech Bet For 2014 Google, Apple, Microsoft: Best Tech Bet For 2014

Images via Google, Apple, Microsoft

Looking for the next big thing in the stock market is a dangerous game. Few could have predicted the exceptional rise of Tesla Moors Inc (NASDAQ:TSLA) this time last year, and ten years ago fewer would have bet on Apple Inc. (NASDAQ:AAPL) to be the most valuable company in the world. It’s difficult to see where the big gains are coming from, which is why a mixed approach suits more investors.

Warren Buffett has advocated investments in consumer facing companies with strong worldwide brands for years. The strategy has made him the most talked about investors of all time. The Oracle of Omaha has little to say about the tech world, however. It’s a market he doesn’t understand and one he stays away from as a result. That doesn’t mean his philosophy isn’t useful when looking at the market.

Hot Stocks For 2014

There are a few companies that meet some of Warren Buffett’s definition for a good investment. The top of the list is populated by Microsoft Corporation (NASDAQ:MSFT), Google Inc (NASDAQ:GOOG), Amazon.com Inc. (NASDAQ:AAPL), and Apple Inc. (NASDAQ:AAPL). There are other companies that could join the list, but these are the four major players.

Amazon.com could be removed from the list for many reasons, but one is blatantly obvious. The company has not demonstrated the ability to make a consistent profit. That’s enough to write the company off when placed beside Google, Apple and Microsoft.

These are three of the four most valuable companies in the world. Each has a huge consumer base, a growing business, a strong brand and, bar Microsoft, great leadership. Each of the companies meets some of the criteria that Buffett sets out for investments, but there are problems. All of the company’s are widely followed, and none of them are particularly undervalued.

Microsoft, Apple Or Google?

Investors don’t have to choose between Apple Inc. (NASDAQ:AAPL), Google Inc (NASDAQ:GOOG), and Microsoft Corporation (NASDAQ:MSFT). The truth is that these three companies are not true competitors, so a bet on one is not a bet against the others. Google makes money off of advertising, Apple from hardware and Microsoft from software.

A bet on the three firms is a bet on the internet and technology scene dominating the stock market for another year. Each has their own problems to deal with, however. Apple needs a new product, Microsoft needs to sell some hardware this time around and Google needs to keep Facebook off of its back.

Keeping all three stocks in a portfolio helps to mitigate the risks. All three companies have magnificent growth opportunities next year, but all three could crash and burn in the coming months. Betting on the tech market is risky. That’s why Warren Buffet stays away, and it should give all investors cause for second thought

Disclosure: Author has no position in any stocks mentioned, nor does he plan to initiate one in the next 48 hours.