Investing in tech in the age of ‘disruption’

2013 was bullish for tech stocks, with echoes of the go-go 1990s. "Story stocks" abounded. Social-media darling Twitter popped 73% on its first day of trading. Facebook rebounded following its botched 2012 IPO after it proved it can generate revenue via mobile ads. Electric-car maker Tesla soared, too, as did digital movie-and-entertainment provider Netflix. The price action, however, was so robust, and investor enthusiasm so ebullient, that a debate broke out on Wall Street as to whether tech land was morphing into yet another bubble. Here's what veteran tech-fund manager Kevin Landis, who counts Facebook and Twitter among his top holdings, had to say about the investing landscape for tech in 2014.

USA TODAY: Facebook. Twitter. Social media. Been there. Done that. Will it keep up the buzz next year, or are you looking for the next great thing?

Kevin Landis, CEO and portfolio manager, Firsthand Technology Value Fund: What's next. That's exactly right. Everyone in Silicon Valley has been looking at social media pretty hard for the last three or four years. Usually when the crowd is looking at one specific area, that is not where you are going to find the best deals. Those are going to get bid up.

But there are other interesting social ideas out there, like Pinterest. It's a content-sharing site that's similar to an electronic bulletin board. Members can 'pin,' or tack up, lists, images or pictures, or whatever they want to keep top of mind. Pinterest has not gone public yet, however.

USA TODAY: What's driving tech: innovation in a brave new digital world?

Landis: In tech, there's lot of disruption going on. There are two big themes already going on, but we still think it's early in the game. One is what I refer to as the cloud computing-induced PC hangover. For the last several decades, the center of your IT existence has been that personal computer you sat in front of. That is being blown up right now.

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Now, yo! u're free to wander around and carry whatever thin or small device that you want, whether it's a smartphone or a tablet computer. What that's doing is really dividing up the groups of winners and losers. The people who made their names and fortunes off the PC revolution are in the wrong spot right now.

USA TODAY: Mobile is the new PC?

Landis: There are five companies that really matter when it comes to smartphones. The two biggest hardware providers are Samsung and Apple. The biggest OS, or operating system, providers are Apple and Google. The reason people want their smartphone is mostly because of Facebook and Twitter.

USA TODAY: What's the other big tech trend?

Landis: What I call media anarchy, the cord-shaving and cord-cutting. For the last 20 or 30 years, your cable company has had a real grip on the kind of information you would view through your TV. Now, we are moving towards what's called over-the-top viewing, and that near-monopoly the cable companies have over their customers is starting to erode. The poster child against that trend has been Netflix, (which streams programming via the Internet and wireless devices). But there will be others.

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There is more to come. We can talk about educational tech. We can talk about electric cars. Both are in their early stages.

USA TODAY: What's hot now?

Landis: One trend on the cusp right now is wearable technology. If you met someone with what looks like one of those Livestrong bands on their wrist, it turns out that it actually does something. It is probably a product from Nike or Fitbit or Jawbone. They track daily activity, like the number of steps you take, and (increasingly) will give you more and more information.Those products are still in their infancy. They are working on making better and better apps for the smartphone to connect to this wearable device. If you think about how much money people spend at Weight Watchers and Jenny Craig, a! nd think ! about how many smartphones get sold every year, then imagine just 1% of them getting sold with a fitness band; the numbers could be really, really huge.

USA TODAY: What are some other wearable trends?

Landis: The other side is not gathering information about you, but displaying information to you. Think about Google Glass, (a wearable computer similar to eyeglasses). There are a lot of companies now focusing on what they can put right in front of your eyeballs, so that when you walk down the street, you don't have to look down at your smartphone to see something; it is right there in your field of vision. In about five years, everyone will be able to look at their Zagat's guide or a subway map while they're walking down the street without walking into poles and other people.

USA TODAY: Wall Street is at the crossroads with science-fiction?

Landis: There is a lot of disruption and great things going on. What makes this game so fun is figuring out who is on the right side of those changes.

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