Friday, July 7, 2006

Commentary:  How's George Doing? 
 
Another bad week for the GTI:  29 stocks down 
and only one up. The GTI is now down 22% in the 
last two months. Should we be discouraged? 
Should we perhaps even throw in the towel?  
 
Yesterday a subscriber to the Gilder Technology 
Report told the Gilder Forum that he wouldn't be 
renewing, that he'd had his fill of the Global 
Crossings, Metromedia Fibers, and WorldComs. 
 
We can sympathize with him. Those companies 
and others were bitter disappointments. They 
soared to great heights, but when they fell to 
earth there were no survivors. 
 
But I hope he doesn't blame George for failing to 
predict the Millennial Crash. Virtually no one did, 
except for a few bad news bears, who always 
think a crash is coming. 
 
And while we all got trashed -- the GTI fell 94.1% 
from early 2000 to late 2002 -- let's not forget that 
in the preceding 14 months the GTI was up 498%. 
It was almost a six-bagger. If only we'd sold . . . 
 
But that's water over the dam. What about 
George's more recent performance. Is he still 
someone to lead us to the promised land? 
 
To try to answer that question, I compared the 
GTI's recent returns to those of the 83 technology 
mutual funds available at Charles Schwab. If the 
GTI were a tech fund, here's where it would rank, 
as of May 31st:

Period GTI
3 months 7th out of 84
1 year 7th out of 84
3 years 4th out of 81

That seems pretty convincing. To outperform 
well over 90% of the professional managers is 
outstanding performance. 
Friday, July 7, 2006 (cont’d) 
 
Case closed, as far as I'm concerned, though I'd 
feel a lot better if the entire sector weren't in the 
doghouse right now. The NASDAQ is back where 
it was more than 7½ years ago.

Since I seem to be promoting George here, this 
is a good time to quote from my FAQ's:

" What's your connection to the Gilder group?

 

None whatsoever, except that I subscribe to the 
report and invest in stocks it recommends.  This 
web site is a hobby -- no pay, no advertising, all 
outgo, no income, except for the pleasure I derive 
from doing it. "

The Week Day by Day: 
   
 
It was open season on Gilder stocks this week. 
With the North Korean missile test, Wednesday 
was a grisly day. But it could have been worse. 
What if they'd downed the shuttle? And then 
came Friday. What a way to go into a weekend.

 
 

Friday, July 7, 2006 (cont’d) 
 
The Week's Top Gainers and Losers

Gainers Losers
 MVIS + 3.1%    PMCS - 16.3% 
        NETL - 9.8% 
        BRCM - 8.5% 
        GLW - 8.4% 
        PWER - 8.2% 

Returns for the Week: 
 
Gilder Technology Index (GTI):  - 4.7% 
Nasdaq Composite Index (NSD):  - 1.9% 
S&P 500 Index (S&P):  - 0.4% 
 
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  0.2% - 3.4% 1.4%
Avg for 9+ yrs  9.5%  5.4% 5.8%
Last 52 wks 6% 1% 4%
Since the high 
of 3/06/00		 - 78% - 58% - 17%
Since the low 
of 10/09/02		 273% 91% 63%
 
 

 
 

Friday, July 7, 2006 (cont’d)

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 - 12.4%   3.4%  
Avg for 2+ yrs 3.3%   1.6%  

Room to Grow:

   GTI NSD S&P
Loss from the 
high to the low		 94%   78%   49%  
% of the loss 
recovered		 17%   26%   65%  
Return needed 
for a new high		 351%   137%   21%  

Graph of the GTI's long recovery attempt.   
 
Individual Year-to-Date Returns:

ADI - 13%   GLW 13%   QCOM - 11%
ALTR - 9%   IKAN - 1%   S - 7%
AMD - 23%   INTC - 25%   SIGM - 41%
BRCM - 12%   KEYW 5%   SMI - 2%
BWNG 68%   LNOP 77%   SMTL - 9%
CPHD 3%   MVIS - 45%   SYNA - 18%
ENER * - 24%   NETL 7%   TSM - 9%
EQIX 27%   NSM - 11%   TXN - 9%
FLEX - 1%   PMCS * - 41%   XLNX - 14%
FNSR 54%   PWER 1%   ZRAN 40%

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