Satori's Dan Niles says tech selling isn't done. Here's what he thinks you should buy instead
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Hedge fund manager Dan Niles contended that Wednesday's sharp sell-off in technology stocks doesn't signal the end of the downward pressure, as the market comes to terms with the end of stimulus and a more hawkish Federal Reserve.

Speaking to CNBC on Thursday, the founder and portfolio manager at Satori Fund said that given the likely further downside risk in the tech sector, investors should look to energy and financials as potential winning bets in 2022.
On the prospects for the tech space, Niles argued that the dramatic rise in the S&P 500 over the past two years was driven mainly by massive government stimulus packages and by an ultra-accommodative central bank.
With inflation still at its highest pace in decades and the Fed poised to begin raising interest rates, Niles thinks that valuations for the more speculative parts of the tech sector will contract, meaning that those names will see a further decline.
"Unless you think inflation is done and unless you think the Fed is done, it's hard to imagine that this [selling] is done," he said.
Even so, Niles sees some bright spots in the tech space. He cited Meta (NASDAQ:FB) and Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL) as stocks that could hold up better than most during a general market downturn.
On the other side of the spectrum, Niles reported that his fund has shorted electric vehicle startups that don't expect to deliver earnings for "a very long time." He did not name the specific companies that he has shorted.
"Last year, it was about 'show me the story' and buy that. This year, it's about 'show me the money,'" he said, describing his expectation that 2022 will be dominated by companies that have proven their earnings power.
Turning to sectors he thinks will outperform during the year, the hedge fund manager asserted that the same conditions that will weigh on other parts of the market will give a boost to energy and financial shares.
For energy, he pointed to the likelihood for higher oil prices as his source for optimism in the sector. Meanwhile, rising interest rates will give a boost to bank stocks, he predicted.
Niles was bearish going into 2022. See why he foresaw a dreary investment outlook for the year.