I love talking about my tech boom days. I had this sectoral approach then also but mixed it up with PE and EPS. It goes something like this.

In 1997 I bought Satyam and sold off because I was making 25% in one week. Satyam used to move like crazy then.

The best part (coz I learnt from it) was in the year 1999. I reentered software buying DSQ, Silverline, Pentamedia and Sri Adhikari (yes no Global and no HFCL missed it). In about 8 months I had a list of 5 and ten baggers with me. My over all portfolio was up seven times I had also invested in some non performing consumer and Pharma companies  and I started to get worried.

I thought that software stocks would fall and was working on the idea of converting everything to Infy and Satyam but I stopped.

The red chips that I was owing traded at a PE of 100 times and the blue chips I wanted to own were at a PE of 100 times.

Now I did not want to sell a low PE stock to buy the higher PE ones. As prices fell these stocks fell further so relatively their attractiveness improved. I bought more at each decline by borrowing from a Bank. But the prices kept falling and the margins had to be met by pledging more shares - since there was no surplus cash.

At one point in time I had pledged all my shares and would buy new ones only if they were bank approved. Finally inevitable happened. the bank sold off my shares and credited the a/c with the balance. I learnt the most important lesson of my life

1)    Always invest in the sector leader either No. 1 or No. 2

2)    DO not buy any thing that you do not understand .Better to buy things that you can see.

3)     If you have made a 400% on a stock you need to lose only 80% to break even.

4)    Do not look at the PE alone. “An investor shall not live by PE alone”

I have tried putting My investing strategies on a different section at this forum. Most of it has been created through reading and experiencing (losing) and hardly anything by listening.