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Dick Sears Commentary: Nothing Ventured, Nothing Gained

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

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.