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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: SecularBull who wrote (33729)	3/16/2001 9:30:34 AM
From: stockman_scott	Respond to of 65232

Van Wagoner Funds Rocked by Tech Carnage Thursday March 15 Morningstar.com By Christopher J. Traulsen <<Hold on to your hats. Few mutual funds are as volatile as Garrett Van Wagoner's eponymous offerings, and they're living up to their reputations in the worst possible way in 2001. All five of his firm's funds (Van Wagoner Emerging Growth (NA: VWEGX), Mid-Cap Growth (NA: VWMDX), Post-Venture (NA: VWPVX), Micro-Cap Growth (NA: VWMCX), and Technology (NA: VWTKX)) have lost between 40% to 50% for the year to date through March 13, 2001. His shareholders may well have lost their lunches by now, but Van Wagoner is hanging tough. In a recent interview with Morningstar, Van Wagoner said that although he expected the going to be rough in the first half of 2000, he was optimistic for the later part of 2001. ``As we look at the year, we are not in the camp that says the economy is going to stay under pressure all year. By the second half, we think it will be starting to move up again. We want to make sure we're positioned for more of that, rather than moving into more-defensive sectors.'' The Van Wagoner funds were positioned accordingly coming into 2001, with all five having 80% or more of their portfolios in technology and telecommunications equipment companies at the beginning of the year. Van Wagoner did make a couple of concessions to the economic slowdown, however. He and fellow managers Raiford Garrabrandt and William Putnam significantly reduced the funds' weightings in cyclical areas such as semiconductors last fall. The funds are thus focused mostly on software companies, which Van Wagoner thought were better positioned to withstand an economic slowdown than more- cyclical firms. The managers also wrote calls on some of the funds' larger positions. The latter strategy limits the potential for upside gains on the shares for which the calls are written but generates extra income for the funds from the sale of the calls. The funds' overall positioning has still been a recipe for disaster in 2001. While software companies are less cyclical than semiconductor firms, they are not immune to an economic slowdown. Further, many software companies were trading at rich valuations based on the expectations that they would continue to deliver extremely high rates of growth. In the face of a slowing economy, however, investors' growth expectations for such companies are shrinking, and valuations are falling accordingly. Thus, top holdings such as business-to-business e-commerce firm Ariba (Nasdaq: ARBA - news) and web-content-management firm Interwoven (Nasdaq: IWOV - news) have lost more than half of their values thus far in 2001.>>