Commentary: Days of Wine and Rises
Thanksgiving always
comes on the 4th Thursday
in November. Something else comes on the 3rd
Thursday in November,
Beaujolais Nouveau.
When the day arrives, there is not a moment to
lose, as Jack Aubrey
would say. The corks start
popping at midnight on Wednesday. It is a time of
celebration, a time of hedonism before the long
winter ahead.
On Thursday, the market welcomed the 2005
Beaujolais Nouveau with almost its best day in
seven months. It got me wondering. Is Nouveau
a positive indicator for the market? Are the bulls
perhaps in buying moods on Thursday after their
revelry of the night before?
As
Victor would have me do, I set out to gather
the facts needed to test my theory. Here are the
GTI's historical returns for the first day of recent
Beaujolais Nouveaux:
| 2005 | + 1.5% |
| 2004 | + 0.1% |
| 2003 | - 1.1% |
| 2002 | + 8.8% |
| 2001 | + 2.4% |
| 2000 | - 5.7% |
| 1999 | + 2.3% |
| Avg | + 1.2% |
In the aggregate, these are well above
average
returns. But it's only a seven year period. It is
most likely a random variation.
If I were writing in the mainstream media, I might
spin the data. I might cite only 2002, for example,
leaving the implication that it was a typical year,
and that my theory was valid. Such is the manner
in which anecdotal evidence is often employed to
peddle misinformation.
But we bloggers hew to a higher standard. (I'm
a financial blogger now. You can find me at the
ADVFN Bloggery. Registration is free.)
I haven't sampled the new vintage yet. I've been
saving that pleasure until after this update. So
if you don't mind, I'll hurry off now. They say
the 2005 is excellent.
The Market This
Week:
Not much happened this week, until Thursday
and the Beaujolais Nouveau celebration. After
that, the market as a whole went back to being
indecisive, but not the GTI. It partied heartier on
Friday than it had on Thursday. I think I'll join it,
but first let me pay tribute to Essex (KEYW). It
was up over 15% this week.
Returns for the
Week:
Gilder Technology Index (GTI):
+ 2.8%
Nasdaq Composite
Index (NSD): + 1.1%
S&P 500 Index (S&P): + 1.1%
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 to Date | 5.5% | 2.4% | 3.0% |
| Avg for 8+ yrs | 10.3% | 6.3% | 6.0% |
| Last 52 wks | 12% | 8% | 7% |
|
Since the
high of 3/06/00 |
- 78% | - 56% | - 18% |
|
Since the low of 10/09/02 |
274% | 100% | 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 to Date | 11.5% | 4.5% |
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
19 up, 9 down, 0 unchanged.
From the GTI's Origin (1/1/99) to Now:
Weekly Change in the GTI, Last 52 Weeks:
Trailing 3-Month Returns, Last 52 Weeks:
Volatility, Trend, Recovery:
As an indication of volatility, this table shows average weekly change in the GTI
each year:
| Year | Ave Wkly Change |
| 1999 | 4.2% |
| 2000 | 7.7% |
| 2001 | 8.5% |
| 2002 | 6.8% |
| 2003 | 4.3% |
| 2004 | 3.4% |
| 2005 to Date | 2.1% |
As an
indication of trend, this table shows
number of up weeks for the GTI each year:
|
Year |
Number of Up Weeks |
As a % |
| 1999 | 39 of 52 | 75% |
| 2000 | 24 of 52 | 46% |
| 2001 | 22 of 52 | 42% |
| 2002 | 19 of 52 | 37% |
| 2003 | 31 of 53 | 58% |
| 2004 | 28 of 52 | 54% |
| 2005 to Date | 23 of 46 | 50% |
The GTI
fell 94.1% from its March 6, 2000,
high to its October 9, 2002, low.
Click here
for the details of its long recovery attempt.