A year-end summary of the portfolios (started 10/28/00 with $100,000 distributed equally among the stocks in each group). An horrific story. The best performer was the Hypertension Diagnostics Warrants (HDIIW) in the Pariah portfolio which were flat for the period. The worst investment was Pillowtex, also from Pariah, which declined 81.9% - and is actually probably worthless - following bankruptcy declaration and delisting form the NYSE.
These portfolios likely reflect a significant component of the continuing momentum in NASDAQ’s crash. Most of the logic that went into investing earlier in the year was turned on its head by thetime of the winter solstice. The biotech portfolio was the worst performer - no stock in the group lost less than 20% and half of the stocks lost more than 40%. In the SEM sector - as in many other technology sectors - the largest cap stock was one of the worst performers. Applied Materials, the gorilla of the equipment manufacturers, lost 40% during the period, achieving an ignominious next-to-last placement in its group.
The lesson from this entire group of 22 stocks is quite clear - no matter how loud and confident and seemingly well informed the cheerleaders of the biotechs or the SEMs are on SI, the essential rule of investing remains intact: near term future earnings are the key. The best performing stock in this group (HDII) has publicly stated FY2001 earnings will improve substantially...and this doesn’t even account for revenues from their core product which recently received FDA product.
The biotech and SEM boosters should look back on 2000 and digest this take home message: No caveats - real earnings count. Full stop.
Well duh, epitomized.
--------------------------------------------
Year-end summary:
Pariah -> $72,650.00 (-27.3%)
Hubris - SEM -> $71,926.56 (-28.1%)
Hubris - Biotech -> $63,075.73 (-36.9%)
Hubris - Biotech
MLNM....-21.2%
VRTX....-23.3%
NBIX....-25.1%
SEPR....-34.3%
TTP....-42.5%
NBSC....-47.9%
BTRN....-48.5%
RGEN....-52.4%
Hubris - SEM
TER....-2.6%
KLIC....-19.6%
KLAC....-25.7%
NVLS....-27.6%
ASML....-33.1%
LRCX....-34.1%
AMAT....-39.7%
AMKR....-42.1%
Pariah
HDIIW...0.0%
SBC...-3.9%
KLIC...-19.6%
DXT...-44.7%
MXR...-50.0%
PTX...-81.8% |
