Commentary:  Room to Grow

It's natural to be cautious after a long run up in
stock prices, especially with the Millennial Crash
so fresh in our minds.

The GTI has been up four weeks in a row. Over
the last 25 weeks, the GTI has gained 37% and
the NASDAQ has gained 13%. It has been five
years since the market was this high.

Should we be worried? Was Friday's collapse
a sign of bad times ahead? Or was it a pause
on the way up?

Who knows? Months from now, we may be
kicking ourselves because we held on when
we should have sold. On the other hand, we
may be kicking ourselves because we missed
a great buying opportunity.

Only time will tell, but me, I'm bullish. I think
we're headed for good times.

Think about it. When the market reaches a
five-year high, that means it's in the same
place it was five years earlier. It has had no
growth for five years.

That ought to be bullish. Over the long term,
stocks return on the order of 10% per annum,
more than a million % a century. Five years of
no return leaves a lot of growth to make up for.

Rather than look back five years, what if we look
back six years, to the March 2000 all-time highs?
That leaves tons of room for growth.

You may say that those all-time highs were
bubble-induced and never again attainable.
Rubbish! Let's not allow our disappointment
over the crash to run away with us. The natural
course of affairs is for the market to make
all-time highs. It always has, and it always will.
Some just take longer than others.

And maybe it won't take as long as we think.

The Telecosm was derailed the first time around,
but most of its concepts remain valid. Most of its
structure is still in place, even the disasters like
Global Crossing. Runaway success may be only
a killer app away.

Consider the increase in global prosperity since
March of 2000. Look at China. Is it unreasonable
to think that the Telecosm may be even bigger
the second time around?

So let's focus on setting new all-time highs.
We won't get there overnight, but think of
the fun we'll have along the way.

To make new highs, we have to recover what
we lost from the high to the low, from March 2000
to October 2002.

So far the NASDAQ has recovered only 31% of
what it lost, so you can see how much room for
growth there is. To finish the job, it now needs
to gain 116%. It must more than double.

The GTI has recovered 23% of its loss. It needs a
260% gain for a new high. That's a tall order, but
not impossible. In 1999 it returned 284% in a year.
Since October of 2002 it has returned 368%. 

In the future, the following chart will be a regular
part of this site. It will show how far we've come
and how far we have to go.

Room to Grow (see also GTI Recovery):

I'm an optimist. Long ago I stopped grieving
about what I lost in the crash. What counts
now is the future, and to me it looks bright.

We certainly have room to grow.

The Week Day by Day:
 

High interest rates remain a concern, but not for
me. There are two weeks to go before I buy that
life annuity I mentioned last week.

Only one day in the last three weeks has the
NASDAQ beaten the GTI, and that was by a
whisker.

The Week's Top Gainers and Losers

Microvision (MVIS) is up 32% in two weeks,
almost back to break even for the year.

Returns for the Week:

Gilder Technology Index (GTI):  + 2.1%
Nasdaq Composite Index (NSD):  - 0.0%
S&P 500 Index (S&P):  + 0.1%

Historical Returns:

Comparison of Returns for GTI Stocks
By Whether or Not They Pay Dividends:

Individual Year-to-Date Returns:

24 of the 28 GTI companies are in the black
for the year.

From the GTI's Origin (1/1/99) to Now:

Trailing 3-Month Returns, Last 52 Weeks:


 

The GTI fell 94.1% from its March 6, 2000,
high to its October 9, 2002, low.  Click here
for