Commentary:
Nothing
Ventured,
Nothing
Gained
This
past
Tuesday
I had
lunch
(fried
oysters
and
squid
chili)
with
Victor
Niederhoffer.
I
happened
to
mention
that I'd
recently
moved
some
money
from
stocks
to
Treasuries.
His
eyebrows
arched
in
consternation.
He knows
I'm as
bullish
as he
is. What
could I
be
thinking,
selling
when the
future
is so
promising?
I
explained
that I
was
rebalancing
my
portfolio.
I was
investing
more in
a good
night's
sleep.
I am
indeed
bullish,
but the
future
is never
a sure
thing.
It's
always a
question
of
probabilities.
While I
believe
we're
likely
to see
large
gains in
the next
few
years,
something
could go
wrong.
It did
in the
year
2000. At
my age
I'd
rather
be
safe
than
sorry.
I wasn't
always
so
timid.
Five
years
ago I
was
invested
100% in
Gilder
stocks.
It's no
wonder
I
couldn't
sleep.
Today my
portfolio
is 46%
Treasuries,
46%
mutual
funds,
and 8%
Gilder.
All of
this is
hard for
Victor
to
understand.
Why
would
anyone
avoid
risk? He
loves
it.
Where
there's
no risk,
there's
no
reward.
Victor
is a
five-time
national
squash
champion.
Imagine
the
risks he
undertook
to
become
that.
He might
have
suffered
disappointment,
or
embarrassment.
All his
hard
work
might
have
been
wasted.
He might
have
missed
other
opportunities.
Subsequently,
after a
long
period
of
success
as
a trader
and
speculator,
Victor
lost
everything
when the
Asian
markets
collapsed
in
1997.
He
picked
himself
up,
started
over
from
scratch,
and
today
has a
top-rated
hedge
fund.
I don't
even
want to
think
about
the
risks he
goes
through
every
day to
make a
success
of that
business.
My point
is that
some
people,
like
Victor,
have
great
appetites
for
risk.
It's a
good
thing
they do,
because
most of
the
wealth
that the
world
enjoys
has come
from the
ideas,
daring,
and hard
work
of
entrepreneurs
like
Victor.
But that
level of
risk
is not
for me,
at least
not at
this
stage of
my life.
Meanwhile,
earnings
season
continues
apace.
Broadcom
(BRCM)
and
Qualcomm
(QCOM)
both
issued
good
reports
and were
up more
than
10% for
the
week.
The
second
of
these,
the
Mighty
Q,
happens
to
represent
an
outlandish
40% of
my
Gilder
portfolio!
Risky
behavior
can be
rewarding.
The
Market
Day by
Day
Lots of
gyrations
this
week:
days
that
started
well but
then
turned
sour,
and days
that
started
poorly
but then
became
strong.
Times of
risk
and
reward
for day
traders,
short
sellers,
and
other
daring
types, I
would
imagine.
In the
end,
a good
week,
but
nothing
gaudy,
nothing
to
attract
unwanted
attention
from the
Fed.
Returns
for the
Week:
Gilder
Technology
Index (GTI):
+ 1.9%
Nasdaq
Composite
Index (NSD):
+ 1.1%
S&P 500
Index
(S&P):
+ 0.5%
| Historical Returns |
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 to Date |
3.8% |
0.2% |
1.8% |
| Avg for 8+ yrs |
10.5% |
6.3% |
6.1% |
| Last 52 wks |
29% |
18% |
14% |
Since the high
of 3/06/00 |
- 78% |
- 57% |
- 19% |
Since the low
of 10/09/02 |
268% |
96% |
59% |
Makeup
of the
GTI:
The GTI
companies
are
those
"Telecosm
Technologies"
in the
Gilder
Technology
Report
whose
stock is
readily
available
to
investors.
If a
company
is not
traded
on the
NYSE,
AMEX, or
NASDAQ
National
Market,
it is
not in
the GTI.
This
past
week
there
were 28
companies
in
the GTI.
Advances
vs.
Declines:
Among
the GTI
stocks
this
week,
there
were
16 up,
10 down,
2
unchanged.
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