A dot-com veteran's warning about buying the tech dip

Ted Mortonson is Baird's tech strategist, a title he holds within the firm's institutional equities research team. Baird's research team page lists him in that role.

Baird announced his arrival on 10 March 2020. The firm said he joined with more than 30 years of technology sector experience in senior sales and management roles at major sell-side firms. Baird's 2020 announcement described that background. The same profile has him covering the technology sector for three decades. Sell-side firms are brokerages that publish equity research and sell trading and advisory services to institutions, as opposed to the buy-side funds that act on that research.

A MarketWatch article carries the headline "A dot-com survivor warns retail investors against buying the tech dip." The headline frames the piece as a caution aimed at individual investors rather than institutions. The article itself is the place to check what was actually argued.

Buying the dip means buying after prices fall, betting that they will recover. A dip only becomes visible once it has happened, and the same drawdown, meaning the fall from a recent peak, can later look like the start of a bigger decline. Recovery arithmetic shows why depth matters. A 10 percent fall needs a gain of about 11.1 percent to get back to even. A 30 percent fall needs about 42.9 percent. Recovery math is not a forecast, but it does explain why sector drawdowns can carry a long tail for anyone who buys early.

The distinction between retail and institutional investors matters here. A large fund can size positions gradually, hedge its exposure, and hold through volatility with dedicated risk teams. An individual often has a smaller base, a shorter horizon, or a need for cash on a fixed date. Warnings aimed at individuals usually rest on those constraints rather than on a view about any single stock, and that is the reading the headline invites.

In my view, three things deserve separate weight. The first is what has happened: the prices, the earnings, and the guidance. The second is what the market has already priced in, which is often a matter of valuation multiples and the consensus expectations built into them. This can be measured with some discipline. The third is the strategist's judgment about what comes next. That is an opinion, however well informed, and tech strategists have offered confident calls in both directions across many cycles.

The useful question is not whether he has been right before. It is whether the argument holds on its own terms: which valuation or earnings conditions it assumes, what would invalidate it, and whether the advice fits the investor who might act on it. Those are the tests a professional would apply to any strategist's call, including a warning against buying weakness.

To be clear, nothing here is a recommendation to buy or sell any security. A headline warning against buying the tech dip is a view about timing and risk. Whether it applies to a given portfolio depends on that portfolio's size, time horizon, and tolerance for further losses, none of which a column can know.