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TWST: Which sectors would you say are most sensitive to changes in the economy?

Ms. Yarchover: Well, there's a difference between how the stock prices react to economic changes and how the businesses react to economic changes. For example, in a rising interest rate environment, people get very nervous about the home improvement companies because they tend to think that people will be more reluctant to refinance their houses and will be less likely to undertake a large improvement project.
In terms of what drives the consumer electronics companies, the cycle is really product-driven. What's happening in the environment is almost irrelevant. We know that when the economic environment is very, very strong, but there's no product cycle, the companies actually do pretty poorly. Right now we're facing what is probably the largest consumer electronics product cycle that has ever been seen, with all the new digital products coming online, so we think it's going to be a pretty exciting sector.

TWST: Is Home Depot (NYSE:HD) a stock to buy today? And, in fact, should it be regarded as a core holding position for retail investors?

Ms. Yarchover: Home Depot is one of the very few companies, particularly in the retail world, that I think can be a core holding position. Like any stock, it has its ups and its downs. But because the company and the management are so forward-thinking, always testing so many different projects, whether it's the Expo Design Center, whether it's starting to move internationally, they always have enough projects going that I'm comfortable about the long-term value creation for the company. I do think that it should be a core holding for retail investors.