SAN FRANCISCO -- This year's NationsBanc Montgomery Tech Week conference may be remembered more for who didn't come than who did. Not only were there high-profile no-shows among presenters, but there were also some notable tech money managers who didn't even bother to attend.
Ryan Jacob, who became a minor star as manager of 1998's top fund, the $22.2 million
Internet fund, stayed back in New York to take care of business. Ryan has 25% of his portfolio in cash, and he doesn't feel like investing that pile anytime soon.
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"We're still in a defensive position," Jacob said from his New York office. "We're a little cautious still."
He can afford to sit tight. His fund is up 48% this year, which means he could put
his portfolio in cash and still have a decent shot at beating the
Ryan's caution is present at the conference, too. When
caught up with Arden Armstrong at a wine tasting, courtesy of Montgomery in the lush
, she seemed to find more to savor in her cabernet than in many of the investment ideas proffered here.
"Everybody's saying, 'Did you find anything to buy? I can't find anything to buy,'" said Armstrong, who manages the $675.6 million
MAS Midcap Growth fund and the newly minted
MAS Small-Cap Growth
fund. "It seems like all the Internet day traders went out in the last couple of days and bought cars instead."
"It's almost," Armstrong sighed, "as if the frenetic frenzy is over."
After rising a brisk 14% in January, the tech-heavy
Nasdaq Composite Index
has had a rocky start in February, falling more than 2% Tuesday before rebounding 1% Wednesday. That uncertainty is evident in the mood lurking here amid the plush-carpeted corners and dimly lit salons, where companies spell out their business plans.
Few money managers are truly bearish on tech stocks. Nearly all are afflicted with a queasiness regardless of their stance on the high valuations in the sector: Those who hold tech shares are scared they will top out, while those who don't hold them worry about being left behind.
"No doubt, psychologically, it's hard to buy at current Internet valuations," said Deron Kawamoto, an investment analyst with
. He's been looking for opportunities at the conference for mid-cap tech players with reasonable values that haven't gotten caught up in .com mania.
For Kawamoto and Armstrong, that means telecom services or equipment companies. As examples, Kawamoto points to
And unlike last year's Tech Week, presentations by Internet companies aren't sending their stocks higher. Stock in
tumbled after the company's Tuesday presentation. Even though investors at Wednesday's presentation were enthusiastic about eBay's business model, they just weren't buying the stock.
Michael J. Mufson, manager of the $2.6 billion
Putnam OTC & Emerging Growth fund, said despite eBay's great business model, its $11 billion market cap is too big for his small-tech-focused fund. So Mufson said he attended eBay's presentation to get wind of any promising upstarts that could threaten eBay down the road.
Even money managers showing enthusiasm about Internet names aren't exactly rushing for the phones after presentations. Michael R. Tucker, an investment analyst who concentrates on Internet and technology for
, said he liked what
had to say. But he needs to hear more.
"We don't do much calling back to the office to trade during the day," said Tucker. "It tends to be a longer research process than that."