06/16/06

Commentary: Blue Mondays

A week ago Thursday the market had a v-shaped
day that suggested we had hit bottom. But then
this week opened with a 3.8% GTI loss, and our
hopes for a speedy recovery were put on hold.

We need to stop shooting ourselves in the foot
with the starter's pistol.

Each of the last five weeks the market has got off
to an horrendous beginning. The opening day
after a weekend has been the kiss of death from
which the week couldn't recover.

Here are the numbers for the GTI's performance
on the first trading day of each week:

Week Ended	Opening Day Return
May 19	- 1.9%
May 26	- 2.6%
June 2	- 2.6% *
June 9	- 3.5%
June 16	- 3.8%

* Memorial Day Tuesday.

If none of the five opening days had taken place,
the GTI would be up 6% for the last five weeks,
instead of down 9%. Maybe the market should
switch to three-day weekends.

What's the problem here? Why is the first day
after a weekend so dreary?

My theory is that there's a Monday imbalance
between bulls and bears, between buyers and
sellers. It doesn't take much of an imbalance
to produce a sizable price swing. Leave the bears
alone in the shop, and they'll wreck it every time.

Why the imbalance? Because of the different
personalities of bulls and bears.

Bulls are optimistic and fun loving. They like to
party. This time of year, some of them don't make
it to the office at all on Mondays. Others do, but
with diminished capabilities. Perhaps nursing
hangovers, they're not in the mood to buy.

Bears, on the other hand, are not party animals.
They spend most of their time worrying about
what might go wrong. Their idea of fun is reading
gloomy reports from people like Kvetchin'
Gretchen Morgenstern of the Anti-Business
Section of the NY Times.

And they never dare take a day off. So, every
Monday, there they are, sure that the sky is
falling, ready to sell.

But our time will come, and maybe pretty soon.
The market seems just about finished with this
latest nonsense. There are signs of life.

And now, I have more important things on my
mind. On winged foot I fly back to the TV and
the US Open Golf. Let's Phil it up, there's no
Tiger in the tank.

The Week Day by Day:

The Week's Top Gainers and Losers

Gainers		Losers
BRCM	+ 9.6%	EQIX	- 11.6%
INTC	+ 6.6%	ENER	- 10.4%
NETL	+ 6.4%	ZRAN	- 7.9%
PWER	+ 6.3%	SYNA	- 7.4%
PMCS	+ 5.4%	SMTL	- 5.6%

Returns for the Week:

Gilder Technology Index (GTI): - 1.1%
Nasdaq Composite Index (NSD): - 0.2%
S&P 500 Index (S&P): - 0.1%

Historical Returns:

Period	GTI	NSD	S&P
1997 (est'd)	21%	22%	31%
1998 (est'd)	48%	40%	27%
1999	284%	86%	20%
2000	- 44%	- 39%	- 10%
2001	- 43%	- 21%	- 13%
2002	- 56%	- 32%	- 23%
2003	130%	50%	26%
2004	3%	9%	9%
2005	5%	1%	3%
2006 to date	4.4%	- 3.4%	0.3%
Avg for 9+ yrs	10.2%	5.5%	5.7%
Last 52 wks	12%	2%	3%
Since the high of 3/06/00	- 77%	- 58%	- 18%
Since the low of 10/09/02	289%	91%	61%

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

Year	Do Pay Dividends	Do Not Pay Dividends
2004	11.6%	- 3.3%
2005	11.1%	4.2%
2006 to date	- 7.0%	7.0%
Avg for 2+ yrs	5.9%	3.1%

Room to Grow:

	GTI	NSD	S&P
Loss from the high to the low	94%	78%	49%
% of the loss recovered	18%	26%	63%
Return needed for a new high	333%	137%	22%

Graph of the GTI's long recovery attempt.

Individual Year-to-Date Returns:

ADI	- 7%	GLW	13%	QCOM	3%
ALTR	- 5%	IKAN	- 6%	S	-2%
AMD	- 16%	INTC	- 26%	SIGM	- 26%
BRCM	2%	KEYW	6%	SMI	- 3%
BWNG	69%	LNOP	77%	SMTL	- 8%
CPHD	5%	MVIS	- 45%	SYNA	- 17%
ENER *	- 22%	NETL	18%	TSM	- 5%
EQIX	22%	NSM	- 6%	TXN	- 8%
FLEX	- 2%	PCMS *	- 30%	XLNX	- 4%
FNSR	56%	PWER	7%	ZRAN	48%

* Joined list this year (ENER 2/10, PCMS 4/7, SMTL 5/12).
Return is while in GTI only.