Perhaps at this juncture, the following comments about investing on Gilder'recommendations might be useful to others.
When Gilder put XLA in his list of telecosm stocks, I stood aside and watched the issue soar into the stratosphere. I had seen the same phenomenon before since I am a charter subscriber to the service. Each time, I have refused to get caught up in the initial furor, knowing that another chance would most likely arrive. Incidentally, during the first year or two of Gilder's letter, it would arrive in the mail. Those of us who had read his book on the Telecosm would read Gilder's comments with some understanding and a great deal of curiosity. However, he markets largely ignored Gilder's comments. Stocks included in the telecosm moved as they had moved before.
It was not until Gilder really scored, with QCOM, with JDSU, with NT, with TXN, with LU, with BRCM, that his subscription list mushroomed. It was this success that finally brought all of the media and Wall Street attention. Now that he has become a paragon, everyone waits breathlessly for his latest pick. And everyone tries to jump on board at the same time. Viola!!!The stock goes ballistic!!! The same thing happens on a minor scale when the press reports that Warren Buffet has taken a position in X stock. So what's the rub?
But back to my initial message. I took Gilder's remarks about XLA and started some DD of my own. I was not about to join the madding crowd in chasing the stock to unbelievable heights. This gave me time to research the issue. In that research, I discovered that XLA possessed a uniqueness that might, I say might, prove to be very valuable in the emerging internet hosting and content distribution markets. I looked at the competiton: AKAM and ISLD. While I was looking, Hewlitt-Packard took a significant investment in XLA'S Mirror Image. Then along came EXDS with an even larger investment (about 675 million to be exact) for which EXDS obtained exclusive rights to Mirror Image's patented systems. Incidentally, EXDS' CEO, Hancock, spent quite a bit of time during her conference call yesterday (April 20th) discussing the Mirror Image connection. You can hear it by going to EXDS home page and plugging in to the conference rebroadcast.)
With the knowledge now gained from my investigation, now dramatically confirmed by the smarts in the business, I was ready to move. But now, XLA could be had not for $325 but for $50, $52, $66, $72, $88, 108, 115, all during the past several weeks.
I had done my DD. The big boys (EXDS and HWP) confirmed my inexpert opinions. So I started to accumulate. I now have a rather large investment in XLA and at a reasonable average price, given the fact that I had the patience to wait for the predictable correction.
Now, how does all of this relate to the Gilder letter. George Gilder seeks to discover potential leaders in emerging technology. When he is convinced that he has found one, he shares his knowledge with his subscribers who pay him for his services. He is not a stock market timer. Nor is he a speculator. He is in the knowledge business and his attention is focused on the future. If one takes George's opinions and then performs the necessary due diligence, one may, and I say MAY, become convinced that stock X is a better investment than stock Y. And without George's letter, one would most likely not even have heard about stock X.
Don't blame George for your failures in chasing the stocks that everyone else is chasing. And, when he puts you into something that is really worth owning for the next five or ten years, give him credit for directing your attention to what could turn out to be the best of the best in your future.
But above all, learn to take responsibility for your own investing and quit blaming others. They world is your oyster but you have to learn to open the shell without depending on someone else to open it for you. |
