Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : RMBS: Rambus, Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Don Green who wrote (33)	12/21/2000 3:53:28 PM
From: Don Green	Respond to of 79

WSJE: Handful Of Tech Funds Actually Show A Profit By SARA CALIAN December 21, 2000 Staff Reporter LONDON -- In a year when most global technology funds were down in the dumps, a handful pulled off an amazing feat -- they actually made money. Technology funds on average posted a negative return of 28.47% as of Dec. 11, according to Standard & Poor's Fund Services in London. But there were a few funds sold to Europeans that produced remarkable returns. The TAIB American Explorer Fund rose 18.12%, the Optima Neptune Fund returned 6.05% and the Dresdner GD Global Technology Fund rose 4.74%, according to Standard & Poor's. The key to staying above water is flexibility and having cash at the right time. But the fund managers are the first to admit how hard it was to invest in the midst of a technology tornado. "This was the worst year we've experienced in technology," says Walter Price, co-manager of the $136 million (152.2 million euros) Dresdner GD Global Technology Fund. Mr. Price, 52 years old, has 28 years of investing experience. He co-manages the fund with Huachen Chen. "I have lived through a few of these cycles and was probably more prepared than most other fund managers," says Mr. Price, who manages a total of $1.5 billion with Dresdner Bank's asset management unit Dresdner RCM in San Francisco. "But even I was not expecting it to be as severe a correction as it has been." Mr. Price says he saw how quickly the market was changing in March and raised cash to 30% of the portfolio. The fund's cash level reached its highest point of 40% in October. Then he started to put some of that money to work in November and the cash position is down to a current level of 22%. "We are not optimistic about technology stocks until the second half of 2001," he says. "We do see some good value for growth and are picking up some stocks." The top holdings in the fund include: Amdocs, a billing and administrative software systems company, Cisco Systems Inc., Intuit Inc., eBay Inc., SDL Inc. and Tyco International Inc. "We define technology reasonably broadly -- we aren't just a software or semiconductor or communications fund," Mr. Price says. "We are looking for growth, but we aren't going to pay too much for it." Mr. Price uses his company's battery of 300 researchers to find out specific details such as the sales of Nokia Corp.'s phones in certain countries. He also sticks to a strict discipline of using only his own firm's earnings estimates to calculate the value of companies. "We do our own price-to-earnings estimates and make sure we don't pay too much for a company's growth rate," he says. The TAIB American Explorer Fund and the Optima Neptune Fund are both managed by Juno Madan, head of Neptune Capital Management in New York. Mr. Madan applies the same investment approach to both funds combining both long- and short-position strategies. However, the small size of the TAIB American Explorer Fund, which has $20 million in assets, helped propel its performance higher than the $150 million Optima Neptune Fund. "In April we raised our short position and did very well as tech stocks dropped," Mr. Madan says. "We don't expect tech stocks to stop falling until the second quarter next year." Mr. Madan's strategic switch out of personal computers and into hand-held devices helped to boost his funds. "There are too many PCs in households, and they don't need to up upgraded," he says. "The PC is the dinosaur of the industry." Some of his current favorites are the hand-held-device maker Palm Inc., Juniper Networks Inc., a manufacturer of software and systems for Internet networks, and Rambus Inc., which provides high-bandwidth chip-connection technology. On the other side of the equation, Mr. Madan has shorted a few stocks that he is betting will drop further. He has shorted enterprise-system makers such as Sun Microsystems Inc. and semiconductor company Integrated Device Technology Inc.