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Technology Stocks : George Gilder - Forbes ASAP -- Ignore unavailable to you. Want to Upgrade?

To: George Gilder who wrote (1730)	7/3/1999 10:18:00 PM
From: MileHigh	Read Replies (2) \| Respond to of 5853

GG, I want to learn more about Michael Milkin, could you recommend a book on him. They all seem to be out of print. Thanks, MileHigh

To: George Gilder who wrote (1730)	7/5/1999 2:30:00 AM
From: Marty Lee	Read Replies (1) \| Respond to of 5853

Hello George. This might interest you: Anthony@Pacific doesn't like WAVX. Says the company's business is stupid, hype, etc. WAVX is on his "offical" short list. Message 10356240 Anthony deals in exposing "overhyped, overvalued, fraudulent, promoted, spammed, or suspect equities." Subject 23993 He has targeted WAVX and claims the stock is on a slide to 5 bucks a share. He refers to a recent interview in Barrons with Thomas E. Claugus. Some excerpts: An Interview With Thomas E. Claugus -- Before turning to portfolio management in 1990, Tom spent 17 years in the manufacturing trenches as a manager of chemicals and plastics businesses, preparing and executing business plans. This experience has served him well. In running the Bay Resources hedge fund for Atlanta-based GMT Capital, he outperformed the Standard & Poor's 500 in five of the past six years while remaining net short. He says he'd rather not be short, but his asset allocation approach still dictates it. Q: Why unfortunately? Being net short, you've handily outperformed the S&P 500 in five of the past six years. The exception was 1995. A: I really don't like shorting. Your downside gain is limited to zero in any stock, and your upside loss is limitless if you're forced to cover. Our asset-allocation approach has kept us net short in one of the biggest bull markets in history. We have made excellent returns over that time because that same buoyant market has provided extraordinarily overvalued short targets. However, I still wish we had been net long. Q: Are there any other factors in your ability to pick good shorts? A: There are two important things to note from my background in respect to how our fund's management is different from most. First, I have managed large manufacturers of chemicals and plastics and executed business plans under very difficult and varied environments. This has given me very deep respect for good management and just how difficult it is to add value in an enterprise. Secondly, I learned to manage money with my very own money, not on Wall Street. This means I never had any limitations and very early on had to deal with asset allocation and risk management. Learning to invest with your own money is more expensive than graduate business school, but ingrains the importance of discipline and in-depth due diligence. Partly because of my background I think we are better qualified than most to judge whether or not a business plan is a good one and whether the existing management team can execute it. We like to say that we look for two classes of shorts. The first is, translating a Mexican saying: The skinny dog gets more fleas. The second is an "Evel Knievel short." A skinny-dog short is a company with lots of competition, a small market share, and hopefully weak finances. An Evel Knievel is a company with a new product or service that will fail to meet expectations -- i.e., won't make it across the canyon. Of course, our favorite short is the Combo Dog, which is a skinny dog that tries, and hopefully fails, to jump the canyon. It combines the best characteristics of both types Q: Okay, tell us some stories. A: One company that we have been shorting recently is Wave Systems. Wave's business is providing a hardware/software solution for e-commerce to allow all sizes of transactions, especially micro-transactions. The company has been around since 1988 and has total revenues over that 12-year period of less than $25,000. The stock languished for years in the $1-$4 range until recently. A series of private stock placements coupled with optimistic press releases and overall Internet hype pushed the stock as high as $29 in March. It now stands at 18 1/4 . Wave Systems in the past tried to sell their technology, with little success. Their current business model is to give away their technology for free, and to be a middleman in each transaction. Their EMBASSY system will be embedded in I/O chips used in PCs. A customer will contact Wave and buy credit to be stored securely on his PC. That customer can then buy small items, like MP3 files or computer games on a pay-per-view basis. Wave envisions keeping 40% of the price of the transaction. The computer manufacturer will get 10% as his incentive to install the technology in the first place, and the content provider will get 50%. Contrast that with Visa, which keeps only 2%-3% of each transaction. We think the company has a very limited chance of success. Computer manufacturers must first accept this e-commerce solution and install it on a sufficiently large customer base. Content providers must view this as a viable way to be paid and modify their product offerings. Content providers must also be willing to give up 50% of the revenues of the transaction just to transact. Finally, consumers must be willing to send money to an unknown company like Wave Systems to deposit in the "cash register" on his PC and must be willing to keep that money there until he transacts. All of these steps seem highly unlikely to us. Several competitors, including CyberCash, offer e-commerce solutions for micro-transactions. None has had much success so far. If the micro-transaction market ultimately becomes an attractive one, we think the big players like Visa will dominate it, not some company with neat-o encryption technology like Wave Systems. Q: So what's it worth? A: After the completion of a recently announced acquisition, the company will have 34.5 million shares outstanding, giving it a hefty market capitalization of $630 million. Wave has $21 million in cash and is losing $3.7 million per quarter. Shares issued in recent private placements have just been registered for sale and could hit the market shortly. We think the stock will go back to the low single-digit level. Well, that's it... Anthony has caused quite a stir on the WAVX Boards and his personal site for EXPERT advice too. Your thoughts on Anthony's expertise would be appreciated. Your friend, Marty

To: George Gilder who wrote (1730)	7/6/1999 9:23:00 PM
From: Kenneth E. De Paul	Read Replies (1) \| Respond to of 5853

As my power sputters during this heat wave, my pc and cable gets shut off, and my phone still rings, I am beginning to wonder about your cable prognosis. My cell phone works, too.

To: George Gilder who wrote (1730)	7/10/1999 10:35:00 AM
From: Hiram Walker	Read Replies (1) \| Respond to of 5853

George, I dropped this by for you. HLIT is building this with C-Cor and GIC! Its mainly HLIT,TCOMA(lead by Tony Werner),and Bell Labs breakthrough! This is big,big news! multichannel.com Broadband Week for July 12, 1999 AT&T's Salt Lake HFC Trial Seeks More Than Low Costs By FRED DAWSON July 12, 1999 AT&T Broadband & Internet Services has more up its sleeve than merely another fiber-technology test with the trial of a new hybrid fiber-coaxial design in Salt Lake City this fall. If all goes according to the expectations of at least some company strategists, the MSO could end up redefining how Internet protocol-based voice and data services are transmitted over cable -- in effect outdating the existing cable-modem standard. But first, the company will have to demonstrate that the basic HFC design concept -- dubbed "Lightwire" internally and widely known as "mini-fiber node" -- is a practical option, AT&T Broadband spokesman Mark Siegel said. "This architecture is something we're testing in anticipation that we're going to get millions of subscribers for our advanced services," Siegel said. "If we do, the current architecture -- where 600 households are served from a fiber node -- may not be the best approach. But it remains to be seen whether the new design is the right one." The Salt Lake City trial, passing 66,000 homes and turning on in October, follows a six-month study of multiple options for improving network performance and capacity through segmentation of nodes. During that time, engineers from AT&T Labs worked closely with the engineering team of the former Tele-Communications Inc., led by chief technical officer Tony Werner. Based on that study, the company believes it can extend fiber deep enough to eliminate all in-line amplifiers on the coax network, thus reducing serving-area sizes to under 100 households at a cost of $40 per home passed, AT&T Labs district manager Xiaolin Lu said. Describing the two-phase trial plans in a presentation at the National Show in Chicago last month, Lu predicted that the operational savings from lower power consumption and eliminating or reducing many maintenance procedures needed to keep amplifiers properly tuned would add up to about $11 per home, per year. These numbers alone, assuming that the cost projections are right, could justify using the approach in systems that have yet to be upgraded to two-way HFC status, AT&T Broadband district manager for product realization Marty Davidson said. But Lu and Davidson noted that the real payoff on the new design could be the means by which the freed-up bandwidth on the unamplified coax -- adding at least 250 megahertz to the 750 MHz now commonly available -- is put to use in phase two of the trial. Rather than delivering signals over that spectrum and in the return in traditional modes, the MSO could use time-division multiplexing on an end-to-end basis, allowing each serving area to operate like a local-area network. "You can use the mini-fiber node to do some local signaling, enabling very low-cost, very simple media-access protocols, versus having to resolve everything back at the headend," Lu said. "You can utilize some kind of Ethernet off-the-shelf product as the cable modem." Such a capability would eliminate the requirements for the complex media-access control, quality-of-service and other functionalities associated with today's data delivery over HFC, thereby possibly extending the cost justification for the deep fiber deployment to a much broader base of systems, including those already upgraded, Davidson said. "CPE [customer-premises equipment] is the biggest cost factor in everything, so the payback there could be a major benefit," he noted. Hiram