Bob:
The older names on GG's list tend to be all right, but
often not for the reasons he advances. He tends to focus
on the technology, but for many of these companies
it is the management that makes the difference.
Example: WCOM is by far the finest of the big-cap
telecom companies, primarily because Bernie Ebbers
is a strategic genius who has been consistently
underestimated. I guess that GG recommends WCOM because
of UUNet, but the purchase of Sprint PCS and of the
MMDS wireless licenses were brilliant strategic moves.
The only person in the same league as Ebbers in the telco
world is Craig McCaw. The NXLK purchase of the WNP
LMDS licenses made in one move NXLK the dominant
player of the CLEC world with a full range of local
assets. GG's dropped NXLK for reasons I view as totally
frivolous, ignoring the obvious talent of McCaw
as a telecom strategist.
BRCM is a great chip company, but I would view CNXT as
just all right (nothing special there). BRCM's strength
is a combination again of great executive vision with
a strong focus on DSP-based chip design (the advantage
of a DSP focus is that DSP designs are highly reusable,
thus guaranteeing very fast turn around).
Re. QCOM, CDMA is better than TDMA for voice (but not
necessarily so for bursty data type applications), but
the true reason QCOM is great is the pair formed by I.
Jacobs and A. Viterbi. This is not always appreciated
but A. Viterbi is easily within the top 10 communications
theorists of the 20th Century. Again, the people at the
top have a lot to do with the company.
TXN is not the only company that makes DSP chips,
but its CEO (Tom Engibous) is a real standout.
There are also great companies which do not make GG's
list because of narrow dogmatism. CSCO is the most
conspicuous example. Again, the management
is stellar there.
As I have indicated clearly in the past, on GG's list,
I view TERN and GSTRF as duds (GSTRF will be in bankruptcy
court within 2 years, and TERN after a phase of high growth
fueled by non-HFC upgraded cable will hit a brick wall
and will burn out extremely fast). BTW, if you want an
example of a past GG flop, I would recommend getting
hold of articles in the mid-90s where he discussed
Cellular Vision (CVUS which later became SDPDE)
FWIW, the two tech stock pickers I repect the most are
Kevin Landis and Roger MacNamee. They make lots of mistakes
and are forthright about them (Landis publishes
the composition of the portfolios of all his funds on a
monthly basis), but they are always trying to identify
real commercial trends (communications chips for Landis
and MacNamee a long time before they made Gilder's list,
then later for Landis, DVD chip companies, and more
recently flat panel display chip companies).
In spite of this, I would recommend not relying on
gurus (Gilder or Landis or MacNamee or anybody) for
stock picks. One does not have to be a techie to
master a sector (say chips or telecoms) and there is
always more satisfaction in picking one's investments
than in relying on the wisdom or folly of others.
Best regards,
Bernard Levy |
