SAN DIEGO -- The Nasdaq rally is proof that the old saying in tech stocks still holds true: Buy at AEA, sell at H&Q. In April, these same investors attend Hambrecht & Quist's technology conference looking for stocks to get out of or shorts to put on, hoping to avoid the traditionally weak summers that afflict tech stocks. But not here. Here investors are gathered at the American Electronics Association Classic investment conference to buy. Or buy buy buy, as Stuart says.
Last year's conference represented the absolute bottom in the chip sector. The
Philadelphia Semiconductor Index
has risen an incredible 129% since last year's show. Those stocks were already on a rise, but the news of the semiconductor recovery didn't really take until the AEA conference. The herd of fund managers walked out of presentations barking "Buy" into their cell phones.
This year, the stocks have run so far that investors are looking for second-tier players or distressed companies that have turned around. "I've been hearing that I should check out
," says one fund manager, who asked not to be named. "I wish someone had told me that two months ago. I'm here looking for some stories that
If there is one clear trend here among the companies presenting, it's a trend toward wireless. So who better to see than
Nokia was one of the rare, big-cap market leaders to present at this conference. As such, it was able to break a few AEA rules:
- A CEO didn't present,
It refused to get specific with near-term predictions, and
It got away with a "Brave New World" spiel that wouldn't fly with lesser companies.
"There should be 250 million mobile phone units sold annually by 2002," said Martin Sandelin, Nokia's investor relations vice president. "This becomes one of the largest consumer markets in the world. The car industry has more expensive products, but only sells 40 million. Watches sell about a million. PCs sells a puny 100 million a year. Nothing can really compare."
Sandelin, speaking in a macho-Finish accent (think of a fey
Schwarzenegger), talked of sweeping plans to transform Nokia into an Internet company. "The traditional Internet perception is changing," he said. "It is starting to be seen as the pipe to an access point. And increasingly, mobile telephony and messaging are going to be that access point. What it means is that all of the services and information that you require will be available to you whenever you require."
Nokia's strategy will be based on a new standard called GPRS. "GPRS does for mobile what DSL or T1 does for the PC -- it creates a constant state of on," says Sandelin. "You don't have to dial up and log on to check your email or see the Internet."
He went on to show slides with Internet phones, wireless tablet devices and mobile PDAs based on
Palm operating system.
Sandelin also shot down rumors that Nokia was having component shortages. "There are no shortages of components," he said tersely. "There are tightnesses, but no shortage. We will meet the goals that we have set for ourselves. Twenty-four months ago, it was impossible to get components. I know that other companies have talked about shortages, I don't know if they didn't make the right plans or don't have the purchasing power we have, but availability is in line with the plans that we have."
Sandelin also suggested that Wall Street-style accountability has permeated Nokia's culture. "Certainly at Nokia, we don't say, 'I didn't get that because I wasn't at my desk,'" he said. "That doesn't fly anymore, and some of you may have found that excuse doesn't work for you anymore either."
InterVu Bares All
offered a quixotic presentation by CEO Harry Gruber. The San Diego-based online video delivery company has seen its stock go on a tear, rising 120% in the last two months.
But rather than talk about his sexy stock price, Gruber chose to pepper his presentation with some risque demonstrations of video that has been broadcast by his company. He started with images of
infamous deposition, picking the snippet with questions about a "semen stain." Next up, a clip from
featuring a partially clothed
. What next? Another clip from the
swimsuit video in which the models are wearing painted-on swimsuits.
"We don't do pornography on our site," said Gruber. "Mainly because we don't market for that." To which a wag in the back of the room mumbled, "There goes 80% of the market."
Gruber went on to say that his company would gain some visibility (ahem) with an online event on Nov. 16. "It's a
fashion show done right -- it's the
bunnies' lingerie show," he said. "In addition to the PG version, which is the fashion show, the pay-per-view R version will have a camera backstage."
Sex might sell, but the market wasn't buying his presentation. The stock fell 10.7% today to 63 9/16.
Fund Fun for Putnam Emerging Growth
This is the first AEA in memory that small-cap superstar
Garrett Van Wagoner
hasn't attended, but it looks like his funds (including the
Post Venture fund that I'm in) may have been big winners in
run-up. According to
, three of Van Wagoner's funds --
Micro-Cap, Post-Venture and
Technology -- own some 42,500 shares of the stock. With a 51% run-up so far this week, that gives Van Wagoner's a $1.05 million gain in three days.
But the big winner is Visual Network's largest holder (duh), the
Putnam Emerging Growth, managed by Michael Mufson and Steve Kirson.
says the fund holds 9.6% of the Visual Networks -- 1.97 million shares -- giving the fund a three-day gain better than $46.1 million. The same guys own
New Era of Networks
, another AEA
star and another stock up better than 28% this week. Neon's gain gives Putnam Emerging Growth another $26.1 million gain since last week. For a mid-cap fund that tends to focus on smaller stocks, this is one of those weeks it will celebrate that style.
Maybe people will start looking for Mufson and Kirson in the halls instead of Van Wagoner.
Cory Johnson files weekly from TheStreet.com's San Francisco Bureau. In keeping with TSC's editorial policy, he neither owns nor shorts individual stocks, although he owns shares of TheStreet.com and shares in the Van Wagoner Post Venture mutual fund. He also doesn't invest in hedge funds or other private investment partnerships. Johnson welcomes your feedback at
For more columns by Cory Johnson, visit his column