Skipper Sees Another Year of 'Tough Sledding' for Big Tech

One of our funds was up in double digits, the other was basically flat. I'm not going to tell you what the returns were, but I will say it was a really good year for us. There were two reasons. One, I think we had an appropriately cautious view all year. And two, we concentrated our bets most heavily in the consumer area, and that turned out to be right.

It looks like another tough year for most companies on the enterprise side. The really big incumbents will do relatively better, and some folks who have good product cycles will do well. And it's tricky to predict who those guys are going to be.

We happen to be very fond of some folks that I can't talk about, sadly. But the pattern-recognition filter you want to have is: You want to find a company that's gaining market share in an industry that is at least stable, which has demonstrated profitability at current business levels.

That package should be the core of your portfolio. Then you can pick a moderate number of smaller-capitalization folks where there is an opportunity for a product cycle that will cause the company to go from unprofitable to profitable. With the latter, you'll make a larger percentage return but you're also going to have some that don't work out.

There is an amazing number of really cheap stocks. And the beautiful thing is that the market is far more democratic. As an individual investor, the amount of data that you can get over the Internet is breathtaking. You can get on all the conference calls. But one of the things you learn pretty quickly when you look at all that stuff: It's not really that valuable.

The really valuable stuff is insight. Figuring out, look, wireless is going to be a much bigger deal in five years than it is today. That doesn't mean that everything in wireless is going to be successful. Quite the opposite, in fact: A lot of things in wireless are not going to be successful. The most successful things in the technology economy are most likely in wireless. Ditto with the consumer.

But on the enterprise side, we're in a period where there is no obvious next big thing, other than wireless data. But that's OK.