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Technology > Tech Biz
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Good times, bad times
Time to review this column's hits (buy Gateway and Adobe!) and misses (sell Lucent and Netflix?)
December 18, 2003: 2:04 PM EST
By Paul R. La Monica, CNN/Money Senior Writer

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NEW YORK (CNN/Money) - A reader recently e-mailed me and wrote, "It never ceases to amaze me how totally off base your predictions are."

Now I don't normally like to toot my own horn (ok, that's a lie) but this Ebeneezer is wrong.

In a year when the Nasdaq has rallied some 45 percent so far, my track record is far from perfect. But some of my prophecies have come to pass.

It's time to stroll down memory lane.

It started off well

An ode to Intuit (INTU: Research, Estimates) right around Valentine's Day has been a decent call. While it hasn't soared as high as many other tech stocks, shares are up a respectable 24 percent since the column. And I think, as I did 10 months ago, that Intuit is "a relatively safe bet for the long-term investor. "

A promising beginning
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Beating Bill Gates
Gateway: Stop the cow tipping
Beating Bill Gates: Part 2

A contrarian defense of Gateway (GTW: Research, Estimates) in early March has also panned out well. Even though the fundamentals were a mess (and still are), I didn't think Gateway received enough props for a balance sheet. Gateway's market value was less than the amount of cash on its books. Since then, the stock has surged nearly 90 percent.

Next up was another positive piece, this time on Adobe Systems (ADBE: Research, Estimates), which I believed would fend off new challenges from Microsoft. That has also been a good pick, with shares up 42 percent.

Bad news bear

But then I became pretty bearish, just as tech stocks were really taking off, and momentum proceeded to kick my tuchis.

A negative call on Amazon.com (AMZN: Research, Estimates), eBay (EBAY: Research, Estimates) and Yahoo! (YHOO: Research, Estimates) in late March has been a bust. Since I wrote that "valuations are, to put it mildly, absurd", the trio is up an average of 54 percent. Ouch.

Doom and gloom
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Internet mania returns!
Get off the bus!
I love Netflix (but not the stock)
The return of Lucent and Nortel?
Cisco's competition ain't cheap

A critical look at Rambus (RMBS: Research, Estimates) in early April? It's up 70 percent since then.

And it kills me how wrong I've been on Netflix (NFLX: Research, Estimates). Since this boneheaded proclamation -- "as much as I love Netflix as a company, I don't love it as a stock" -- shares are up nearly 140 percent!

Nortel (NT: Research, Estimates) and Lucent (LU: Research, Estimates) overvalued? The market begged to differ. They've surged 60 percent and 80 percent since late April.

My pooh-poohing of networking stocks Extreme (EXTR: Research, Estimates), Juniper (JNPR: Research, Estimates) and Foundry (FDRY: Research, Estimates) in early May has also looked foolish. Those stocks are up, on average, 84 percent. What a maroon!

BlackBerry leaves me black and blue

After all that pessimism, I finally decided to be positive...for one column at least. And fortunately, a basket of six stocks that I dubbed tech values in mid-May are up an average of 16.4 percent, thanks to healthy gains from Electronic Arts (ERTS: Research, Estimates) and Qualcomm (QCOM: Research, Estimates).

A mixed bag
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Tech bargains in this market?
Napster: Too legit to quit?
Sour BlackBerries

Then at long last, a downbeat column finally bore fruit. (Oh happy day!) In late May, I said that Roxio (ROXI: Research, Estimates), which was resurrecting Napster as a legal music download site, had run up way too much due to online music hoopla. Roxio has plunged nearly 45 percent.

But there's also some rotten fruit to discuss. In one of my harsher columns, I wrote that Research In Motion (RIMM: Research, Estimates), the company that makes the BlackBerry e-mail device, was not "ripe for picking." Famous last words. Shares have soared 123 percent since that dubious call in May.

Hot fun in the summertime

Things got a little better for me in the summer.

Staying out of the Sun
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No dial tone for Ma Bell
Waiting for the Sun
Watch out for Nextel
Amazon's run isn't over

AT&T (T: Research, Estimates) has done nothing since I proclaimed, "Ma Bell is a stock that only a mother could love" in early June.

And in July, I said that Sun Microsystems (SUNW: Research, Estimates) was about to set since takeover rumors were the only thing lifting the stock. Five months later, Sun is still independent and shares have fallen 13 percent.

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By Paul R. La Monica

But I seriously misjudged the momentum behind Nextel (NXTL: Research, Estimates) -- shares are up more than 50 percent since I pointed out some near-term and long-term concerns about the push-to-talk wireless carrier in late June.

Of course, when I begrudgingly jumped on the momentum train (choo-choo!), it might have been too late. Before Labor Day I said that even though Amazon still looked overvalued, the stock would head higher by year's end since it tends to run up before the holiday shopping season. It's up, but just 3 percent.

These things go down

Autumn has been generally kind so far. Nokia (NOK: Research, Estimates) has been flat since I wrote in September that it was looking expensive. Shares of Ask Jeeves (ASKJ: Research, Estimates) have dropped 15 percent since I said, also in September, that the stock was due for a pullback.

Nattering nabob
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Nokia's no value stock
Buy Jeeves? No, sir.
The China bubble

And three hot Chinese Internet stocks are all down since I dubbed their big run-ups "the China bubble" in late October. Sina (SINA: Research, Estimates) and Sohu.com (SOHU: Research, Estimates) have each fallen more than 13 percent while Netease.com (NTES: Research, Estimates) has plunged 36 percent.

So as you can see, there have been some good, bad and U G L Y (I ain't got no alibi) picks. It shouldn't come as a huge shock that in a year when most tech stocks have surged, bullish calls tended to make me look like a genius and bearish ones made me look like a dunce.

But the central tenet of this column is not going to change. Now that tech appears to be "back", it's going to be even more important next year to cut through the hype and point out when stocks have gotten ahead of themselves while also looking for attractive bargains with solid fundamentals.

Good luck to everyone in 2004.


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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.