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I've read Gilder's wisdom religiously for perhaps 5 years, first in ASAP, then in the Gilder Tech Report. He was dismissed as a crackpot as he repeated his position that CDMA (as in Qualcomm) was going to blow other technologies out of the water. No one is doubting CDMA now.
He's also for years repeated his position that the network will "hollow out," with the intelligence at the edges and the connections becoming more "dumb," with dark fiber replacing switched connections ... the "copper cage" of the traditional telcos locked into their metered business model. Some of the jury is still out on his "dark fiber" picks like Level Three and Global Crossing. Looking at their charts over the last few years, there have been opportunities for profits there. I wouldn't bet on him being wrong on the technology.
Gilder has a history of picking out the counter-intuitive success stories that result in very big shifts in economic balances. Tectonic shifts. Way before the crowd sees them coming.
What I have found is that one is at risk relying upon him for timing. Because his perception and understanding of a breakthrough technology is counterintuitive and idiosyncratic, his discovery of a winner may be years ahead of its discovery by the marketplace. Also, we all know that a bad business person can waste even the best technologies for a while, until they go bust and someone smarter takes over. Look at Nextel for one example.
So, one who invested in Qualcomm, for example, when Gilder first started talking about it, or the first time the reader read about it, may have seen his/her investment go through some extended period of inactivity or downright loss.
So, if you are not a highly patient investor, you may want to add Gilder's technology picks to a "watch list" and wait for the right moment in the right market. Great strategists may wait years until the place and time are both right, until that small voice says (perhaps in the accents of Robert the Bruce on midsummer's day, 1314): "This is the place, and this is the hour."
The technique for timing that has worked for me is William O'Neil's, as published five times a week in Investor's Business Daily. Gilder pointed us to Qualcomm ("this is the place") years ago, and IBD's guidance said "this is the hour" in spring of '99. Look at the five year chart at finance.yahoo.com and you'll see exactly what I mean.
My only point is, don't necessarily buy Gilder's picks the month he announces them. Even he will warn you his is not a timing letter.
Doug (no present position in any of the issues mentioned) |
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