| Real World Net Investing Breaking the news, beating the market |
My bosses at Dow Jones in the 1980s taught me this: If you move stocks
you've broken news, because the price change proves you've found out
something the market didn't know. If the stock stays up, or stays down, it
means the new information is also true, which is even nicer.
In 2002, I told the market the Internet was turning around, and created the
Real-World Net Index of profitable Web companies to help readers exploit the
trend. It rose 71 percent in its first 12 months. From 2004 to 2007, my little
portfolio, which I updated every six months to explain new Net trends and
highlight emerging growth companies, beat every U.S. tech fund Morningstar
tracks. When it comes to the Net industry, the 20 illustrates that I'm ahead of
the pack consistently in identifying trends, and that I can translate news from
abstract data into concrete explanations of a reader's world.
How did we do it? By my quick count 17 stocks doubled while members of the
Web 20. AQuantive rose sevenfold. Digital River was almost a nine-bagger
before falling back. Blue Nile quintupled. And Google obviously helped. That
covered mistakes like betting on an InfoSpace revival, not dumping the
execrable InPhonic fast enough, or dropping Amazon and Priceline before they
surged in 2006 and 2007. The portfolio underperforms the Net industry when
Net stocks are in favor, but is so much less volatile than major Net indexes that
it beats them over time.
Bottom line: I did this over four years, including nearly 60 stocks, and the
numbers are the numbers. It's no fluke. It shows a depth of knowledge of the
Net industry that pretty much no other tech writer has.
Here's the first edition of the Web 20, and some of the follow-ups:
The first one: Please oh please compare it to Barron's Bubble Redux cover
eight months later..Or Fortune's How to Invest in the New Net Boom
(Carefully), which took them until 2006.
2004: Cool In a Market Firestorm. The August 2004 updates, broken out over
a couple of different pieces for BW and BW Online, were where I added
Google (remember when Google at $100 was controversial?), Provide
Commerce (which rose 90% in year before being acquired), Blue Nile, Infosys,
and AQuantive.This piece followed a 15-20 percent drop in Web indices, and
rose 120 percent by 2007.
2006. Calling a downturn in the Web market right before a 15% drop in
Internet stock indices. This story isn't such an amazing writing or reporting job.
Instead, it shows a prospective employer that I stayed open-minded enough to
spot and emphasize the short-term problems with my own thesis about the Net
industry. This portfolio also rose nearly 50 percent by late 2007, so it was the
kind of highly accurate, prescient coverage I usually deliver.
2006. Calling the bottom, then running a last portfolio that gained more than
50% within 15 months.
you've broken news, because the price change proves you've found out
something the market didn't know. If the stock stays up, or stays down, it
means the new information is also true, which is even nicer.
In 2002, I told the market the Internet was turning around, and created the
Real-World Net Index of profitable Web companies to help readers exploit the
trend. It rose 71 percent in its first 12 months. From 2004 to 2007, my little
portfolio, which I updated every six months to explain new Net trends and
highlight emerging growth companies, beat every U.S. tech fund Morningstar
tracks. When it comes to the Net industry, the 20 illustrates that I'm ahead of
the pack consistently in identifying trends, and that I can translate news from
abstract data into concrete explanations of a reader's world.
How did we do it? By my quick count 17 stocks doubled while members of the
Web 20. AQuantive rose sevenfold. Digital River was almost a nine-bagger
before falling back. Blue Nile quintupled. And Google obviously helped. That
covered mistakes like betting on an InfoSpace revival, not dumping the
execrable InPhonic fast enough, or dropping Amazon and Priceline before they
surged in 2006 and 2007. The portfolio underperforms the Net industry when
Net stocks are in favor, but is so much less volatile than major Net indexes that
it beats them over time.
Bottom line: I did this over four years, including nearly 60 stocks, and the
numbers are the numbers. It's no fluke. It shows a depth of knowledge of the
Net industry that pretty much no other tech writer has.
Here's the first edition of the Web 20, and some of the follow-ups:
The first one: Please oh please compare it to Barron's Bubble Redux cover
eight months later..Or Fortune's How to Invest in the New Net Boom
(Carefully), which took them until 2006.
2004: Cool In a Market Firestorm. The August 2004 updates, broken out over
a couple of different pieces for BW and BW Online, were where I added
Google (remember when Google at $100 was controversial?), Provide
Commerce (which rose 90% in year before being acquired), Blue Nile, Infosys,
and AQuantive.This piece followed a 15-20 percent drop in Web indices, and
rose 120 percent by 2007.
2006. Calling a downturn in the Web market right before a 15% drop in
Internet stock indices. This story isn't such an amazing writing or reporting job.
Instead, it shows a prospective employer that I stayed open-minded enough to
spot and emphasize the short-term problems with my own thesis about the Net
industry. This portfolio also rose nearly 50 percent by late 2007, so it was the
kind of highly accurate, prescient coverage I usually deliver.
2006. Calling the bottom, then running a last portfolio that gained more than
50% within 15 months.
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