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Official: IBM to gobble Red Hat for $34bn – yes, the enterprise Linux biz

Anonymous Coward
Anonymous Coward

But where do you invest your money now?

In the corporate lifecycle, small companies innovate and grow (and a lot fail). Medium sized companies grow and are usually acquired by lard-arse corporates. Lard arsed corporates have to keep buying medium sized companies to restore revenue lost by their lack of innovation and agility. And half of the money is made by buyouts, half by growth - to double up you need to back the buyout material.

Small companies can offer much better returns, but much higher risk. I'd have thought you need to invest in a portfolio of mid-sized tech companies, carefully avoiding the obvious dogs, and those whose business model you don't understand (because in that situations, you're probably right, and they don't have a sustainable business model).

But each to their own. You might want to invest again in large but sub-corporate businesses like IBM and RedHat. But pick carefully, because making money there is a lot harder - if the opportunity is obvious, then the big investors will already have bid the price too high to offer the small guy any return.

And something else to consider is the macro-economics: Rising US interest rates, trade wars, Brexit, the risk of a medium term equity bear market.

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