Smarter Money: Firsthand Looking Like a Thirdhand Pair of Jeans

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When it rains, it floods beyond belief. That's got to be the feeling today for the beleaguered shareholders of the Firsthand family.

We all know its been a slippery coupla months for this fund group. But today's downpour takes the weather cake. Vitesse Semiconductor(VTSS) and TranSwitch(TXCC), key holdings of the Firsthand group, both blew up last night, TranSwitch for the second time in a month! (We can only go by the January holdings, which is from Firsthand's incredibly good Web site. Really easy to navigate.)

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Firsthand, like many funds, has multiple subgroups that all, basically, could be the same fund. And the breakdown of how TranSwitch and Vitesse are positioned shows that. Vitesse is the largest position in the Firsthand Communications fund, down 41%, and the largest position in the Firsthand Technology Leaders fund, which is down 24%. TranSwitch is the largest position in the Firsthand Technology Innovators fund, down 37%, and the third-largest position in the Technology Value fund, which is down 36%, according to Investors Business Daily. (The Web site says that fund is down 10% year to date, but the other papers confirmed IBD's numbers).

Fortunately two other funds, the E-Commerce fund, which is down 55%, and the Global Tech fund, down 29% as of this morning, according to IBD (down 12% according to the site, which, again, I think is wrong, because the other papers confirm IBD's number), were spared the pain of this duo. On the other hand, the latter fund's biggest position was PMC-Sierra(PMCS), yesterday's big chip casualty.

Do you see a pattern here?

If you don't, then I suggest that you really and truly have found the right fund family, one that you can cuddle in and forget about. If you do, there is always another day to reposition, maybe, and give some money to a manager who saw this tsunami coming.

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