2/20/11 Higher

http://us.rd.yahoo.com/finance/finhome/topstories/apf;_ylt=AsCwLvMYoCVYFq6JIO2wc69O7sMF;_ylu=X3oDMTE1aDBnMjk0BHBvcwM5BHNlYwN0b3BTdG9yaWVzBHNsawNuYXNkYXFuZWFyczE-/*http://biz.yahoo.com/ap/110220/us_wall_street_week_ahead.html?sec=topStories&pos=6&asset=&ccode=

Technology companies in the S&P 500, a close proxy for the Nasdaq composite, are up 8.4 percent so far this year, about 2 percentage points more than the index as a whole. Last year, tech companies returned 10 percent after dividends, compared with the 15 percent return of the full index.

And tech stocks as a whole may be doing better than index returns show. That's because large companies -- with the exception of Apple -- that were hot stocks 10 years ago have matured and their stocks have stalled. "The Microsofts, Yahoos, and Googles of the world aren't growing like they used to," says Michael Sansoterra, manager of the $510 million RidgeWorth Large Cap Growth fund.

Bigger companies have a larger weighting in the Nasdaq index than smaller ones. Microsoft, for instance, makes up 5.6 percent of the index. The company has fallen 6.6 percent over the past 12 months.

And now to the question on the mind of any investor who was once burned by a bubble: Is it too late to get in?

Stock valuations certainly don't suggest so. Tech stocks in the S&P 500 are priced at 13.3 times earnings, which is just 0.3 more than the broad index. Not only that, but they are cheaper than they were a year ago, when they cost 15.4 times earnings. With stocks trading at reasonable levels, it's harder to make an epic mistake. Such as, say, buying technology stocks in June 2001, when they cost 128.3 times earnings.

"I'm still finding a lot of good values out there," says Samuel Dedio, manager of the $108 million Artio U.S. Smallcap fund. "There looks to be a lot more upside ahead of this."

Sounds like the NDQ is currently priced lower, on a P/E basis, than a year ago. So we likely continue higher next week.