Update on Ryan Jacobs
Fund Investment Objective One Week Y-T-D
Franklin Str:Biotech Dis Health/Biotechnology 13.43% 27.20%
Fidelity Sel Bio Tech Health/Biotechnology 13.21 8.30
Dresdner RCM:Biotech;N Health/Biotechnology 12.54 37.16
Rydex:Biotech;Inv Health/Biotechnology 12.31 9.50
Gabelli Gold Fund Gold Oriented 12.13 -15.41
Orbitex:Health & Bio;B Health/Biotechnology 11.91 31.49
Monterey:Murphy NW Bio Health/Biotechnology 10.58 53.98
Rydex:Precious Metls;Inv Gold Oriented 10.47 -9.06
Jacob Internet Fund Technology 9.72 -35.15
Monterey:OCM Gold Gold Oriented 9.64 -3.81
interactive.wsj.com
05/05/00: Market Monitor-Ryan Jacob, Portfolio Manager, Jacob Internet Fund
SUSIE GHARIB: Our market monitor guest says that this has been a ?difficult year.? Ryan Jacob is the founder and portfolio manager of the Jacob Internet Fund. It is down 35 percent so far this year. Ouch. Nice to have you with us.
RYAN JACOB, FOUNDER, JACOB INTERNET FUND: Thanks for having me.
GHARIB: Well, you know, the dot.com world has been a real topic of conversation among investors. Is this a, was this just a passing phase, all the interest in it, or is there something more permanent going on here?
JACOB: Well, we think what we?ve seen is really just a severe correction. It?s, you know, we?ve seen NASDAQ really off, over 30 percent off its highs, which is a lot more severe than a normal correction but given the run we?ve had in the technology market over the last six to nine months, it?s somewhat understandable.
GHARIB: A lot of investors are just staying away from this area. They don?t understand the valuations. How do you choose these stocks?
JACOB: It?s tough. I mean we spend 100 percent of our time focusing on this one sector and we focus on the companies that are earlier in their business lives and it is very difficult. Many of these companies won?t be profitable for a year, maybe in some cases three or more years. So you?re really, you?re getting the opportunity for much higher returns but you?re also taking on a lot more risk.
GHARIB: Let?s talk about some of the companies that are your top holdings beginning with Keynote Systems (KEYN), ticker symbol KEYN. What does it do and why do you like it?
JACOB: Keynote Systems provides Web measurement and diagnostic tools to e-commerce companies, not only dot.coms but also bricks and mortar companies that are going on the Web. It?s important as the Web grows, there have been more traffic issues, congestion on the Web.
GHARIB: Yeah, but look at the stock. All right, it was as high as 177. It?s 56 now. Where do you see it going?
JACOB: This is that?s really a midsize company that?s really just been thrown out while most investors have been really focusing more on the quality larger names, some of these smaller quality names have really just gotten thrown out and are really trading at attractive valuations.
GHARIB: What?s your holding in a company like this?
JACOB: Keynote, Keynote is a very substantial holding for us. It?s actually off of its lows.
GHARIB: But in terms of their outstanding shares, how big are you?
JACOB: Probably less than 1 percent.
GHARIB: Less than one percent?
JACOB: Yeah, I mean for us, yeah.
GHARIB: All right, let?s talk about the next one, Commerce One (CMRC). It?s, it closed at 555 today, but look, this has had a big fall, too.
JACOB: Commerce One is providing business to business software for a lot of major industry players in certain segments. They?re the ones powering the big three auto makers, Web Exchange and they?re really, really out there in a leadership role and really have the opportunity to capture what should be an absolute enormous market opportunity. They?re very well positioned. They?re partnered with the right people and we think they have a good chance of making it.
GHARIB: The other chart is for Phone.com (PHCM). PHCM is the ticker symbol. Tell us the story there. It was high as 208 and now it?s at 78.
JACOB: Yeah, Phone.com is really one of the only pure plays you have today in buying a company that?s really going to take advantage of wireless Internet. Over the next five years, we?ll probably have more Mobile devices accessing the Internet than computers. Phone.com is very well positioned with their software product and their browser products and that?s the way to play it.
GHARIB: So on Commerce One and Phone.com, again, your holdings on this in terms of a percentage of the outstanding?
JACOB: A percentage of the outstanding, less than 1 percent. They?re decent sized companies, not the very small dot.coms that maybe investors, you know, are more accustomed to.
GHARIB: Let?s talk about some of the other stocks in your portfolio which we don?t have graphs for, but really did get clobbered, iVillage (IVIL) one of them, About.com (BOUT). What?s your view on this, buy, sell, hold?
JACOB: Well, these are business to consumer names, the real hard core. These companies derive most of their revenue from advertising. Why About.com and iVillage are well positioned is they?re providing a very targeted audience to advertisers, really utilizing what the Web can do best, providing a targeted audience, being able to track how people move through the sites and respond to the ads, maybe make purchases. These companies have proven their ability to monetize their advertised rate.
GHARIB: You have faith in them?
JACOB: We do.
GHARIB: Let?s talk outside of your portfolio. You said you are getting into Internet companies that are in their very early stages, but for the investors looking at other Internet stocks what would you name as, let?s say, the top one or two names that are outstanding holdings and are going to be big names that we?re going to be talking about five or 10 years from now?
JACOB: The same, really, as today, companies like AOL (AOL), Yahoo! (YHO), Amazon (AMZN). These were early pioneers and really have very, very good prospects going forward and probably the safest out of the stocks you can invest in. But because they?re large today and because they are safer, you have limited upside potential. And that?s why we tend to focus on more the midsize companies where there is a little more risk but we?re going to get more market potential.
GHARIB: All right, real quickly, your half way point of the year, your fund is down 35 percent. By the end of the year, how is the Internet be doing?
JACOB: Well, that?s the big question. We don?t really engage in market timing. You know, we?re trying to take advantage of this as a being, really a buying opportunity. We do think it?s just a correction. How long it takes to come back, though, we don?t know, but we?ll be there.
GHARIB: Hopefully sooner than later. Thank you so much, Ryan.
JACOB: Thanks.
GHARIB: Nice talking to you. And we?ve been speaking with Ryan Jacob of the Jacob Internet Fund, our market monitor this evening.
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Biotech did well last week.
Jacobs fund did well although down for the year.
Biotechs and B2C led the Nasdaq collapse.
Will they led the recovery.
An investor group led by Carlos Slim Helu has acquired a 9.2% stake in ailing online retailer CDnow and are in discussions to increase that stake.
I thought that B2C stock was dead.
Jack |
