June 1999"I asked a young man in his mid-30s what he was doing for a living. He said that he trades stocks. Then he told me that he had $10,000 worth of Microsoft ( MSFT). He said he is convinced that in 10 years it will be worth $1 million. I pointed out that if that were true then Bill Gates' net worth would be larger than the federal debt." Who knows if the young man heeded our reader's advice. But we do know Microsoft is down 37.4% since early June 1999. So the $10,000 is worth about $6,260, with less than seven years to get to $1 million.
November 1999"I own 1,062 shares of the ( ATAHX) Amerindo Technology fund. I've made around 100% on my initial investment six months ago." This tech fund has lost an average of 43.8% a year over the past three years, putting it in the bottom 1% among its battered peers for the three-year period.
December 1999"While running the ( WWWFX) Internet fund, Ryan Jacob made some uncannily savvy moves, both in terms of the sector and individual stocks. For example, when he took over, he immediately repositioned the fund, which had had paltry returns during 1997, as more of a "pure-play" Internet fund with positions in e-commerce. He later moved away from e-commerce and into bandwidth shortly before that sector became hot. While Mr. Jacob admittedly had a very favorable environment to work in, these moves and others (along with several of his interviews I've read) show that Mr. Jacob truly understands the sector and where it is headed." Obviously, Ryan Jacob didn't know where the Internet sector was going. He started his own eponymous (JAMFX) Internet fund just a few months before tech stocks started heading south. The Jacob Internet fund is down 39.1% this year alone.
February 2000"I own the ( VWEGX) Van Wagoner Emerging Growth fund and I see nothing but good. When the market was down my fund was up. Tell me if you know of any fund that you can say that about. I just think you've got a beef with Garrett Van Wagoner and giving him bad publicity." I was just trying to warn people that this fund was aggressive and volatile. And it's down more than 60% this year. That's on top of a 60% loss last year.
February 2000"The ( LLPFX) Longleaf Partners fund is one of the worst funds last year and this year. I took my loss and got out before it dies on its own." Value investing wasn't dead. It was just hibernating. And it came back to life in 2000. This fund's three-year annualized return of 3.7% beats the S&P 500 by more than 13 percentage points a year. Styles go in and out of favor. You want to own both value and growth.
July 2000"I am currently invested in nine technology-oriented funds and have done quite well. It's a good mix of
small-, mid- and large-cap holdings. I try to invest evenly in all funds but have a bias toward Janus." Every portfolio needs some stocks, bonds and cash. Within stocks, diversifying within technology offers no diversification at all.
These points may seem obvious to you. But ask yourself honestly: Have you been thinking of dumping everything growth-oriented because it's been weak the past few years and shoving all your money in bonds and cash?