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- THE FRIDAY LETTER -
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for friends and subscribers)
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| http://www.gilder.com/ | Issue 283.0/February
16, 2007
SIGN-UP A FRIEND FOR FREE!
HEADLINES:
- The Week / Naisbitt and Gilder on
C-SPAN
- Friday Feature / EZ Answers
- Friday Blogger Bonus / Kessler: Circular Hedge Fund
- Readings /
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OFFER
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The
Week /
Naisbitt and Gilder on C-SPAN’s Book TV
ANNOUNCING: Saturday, February 17 at 9 pm; Sunday, February 18 at 6 pm and 9
pm
Book TV presents After Words: John Naisbitt,
author of Mind Set!: Reset Your Thinking ans See the Future, interviewed by George Gilder, Editor in Chief of Gilder
Technology Report
Description: John
Naisbitt's first book, Megatrends, predicted future
developments in the economy, business, government, technology, and social
systems. The book sold nine million copies. In his new book, "Mind
Set!," Mr. Naisbitt explains the mind sets that help him make sense of the
world and anticipate trends. Mr. Naisbitt is interviewed by fellow forecaster
George Gilder, Editor in Chief of Gilder Technology
Report.
Author
Bio: John Naisbitt is the author of several books, including Megatrends and two books he
co-authored with Patricia Aburdene -- Megatrends 2000 and Reinventing the Corporation. Mr.
Naisbitt was Assistant Secretary of Education to President John F. Kennedy and
Special Assistant to President Lyndon Johnson. He is a former executive with
IBM and Eastman Kodak. George Gilder is Editor in Chief of Gilder Technology Report and a Senior Fellow at
Discovery Institute, where he directs the program on high technology and public
policy. His books include Wealth and Poverty, Microcosm, and The Silicon Eye. He was a speechwriter
for Nelson Rockefeller, George Romney, and Richard Nixon.
Learn more:
http://www.booktv.org/feature/index.asp?segID=7963&schedID=476
Order Naisbitt’s book:
http://www.amazon.com/exec/obidos/ASIN/0061136883/gilderpublish-20
|
Outpacing the Market for
Over 10 Years… |
Friday Feature / EZ Answers
GTR Tech
Analyst Charlie Burger on http://www.gildertech.com/board/ (2/15/07): It’s show time for EZchip (LNOP). The network
processor (NPU) guru has begun its initial revenue ramp on the back of sales of
NP-2s to Juniper (JNPR) that should continue through this year, followed
by sales of NP-3s to Cisco (CSCO) and Juniper beginning next year. The
company also took a step closer to “going” public when, late last year,
LanOptics increased its ownership of EZchip from 60% to 78% by issuing
LanOptics shares to several EZ shareholders in exchange for their shares of
EZchip. Publicly traded LanOptics (LNOP) plans to acquire total ownership of
EZchip through similar exchanges with the two remaining EZ shareholders as soon
as they are ready to cash out.
With the props set and actors ready, CEO Eli Fruchter now needs to lift
the curtain. Look for an investor road show sometime this year followed by the
initiation of quarterly conference calls. What’s Eli going to tell all these
skeptical investors?
For one, that he intends to hold operational expenses near the current
run-rate of $13m per year, even as the company grows. One way he saves is by
educating his customers. In addition to supporting internal research, EZ
engineers help customers design their own products. Significant support can be
required for the first design, which can take up to two years, but support for
subsequent designs trends toward zero by the fourth or fifth design. Hence, as
veteran customers become EZ experts, Eli can shift engineers to new customers
and avoid hiring more engineers….
To read Charlie’s complete February 15 EZchip (LNOP) analysis and his answers to the below questions,
visit the Gilder Technology Report subscriber-only message board by
subscribing today at www.Gildertech.com.
Q: How much cash on the balance sheet
is available to EZ and how much still resides with LNOP?
Q: Why is Cisco ("the second CESR vendor" of the press release) not
using NP-2s?
Q: Is the NP-3 sampling?
Q. Is Juniper also designing with NP-3?
Q. Is EZ in wireless backhaul like Wintegra?
|
The Telecosm
Lounge |
Friday Blogger Bonus / Circular Hedge Fund
Andy
Kessler in the Wall Street Journal (2/7/07): I’m thinking of
starting a hedge fund that only invests in the stocks of other hedge funds.
Who’s in?
Most people think of hedge funds as secretive pools run by a bunch
of cowboy traders shooting for the moon. Think again. Fortress Investment
Group, a hedge fund managing $26 billion, is about to go public and raise over
$600 million. This ain’t Pets.com. Hedge funds are money machines, keeping 20%
or more of investment profits: Fortress made $240 million last year. So why go
public? Perhaps to distribute earnings as tax-advantaged dividends, or maybe,
like the rest of Wall Street, there’s nothing like stock options to attract
talent. Most likely, they want to get a lot bigger fast.
The institutionalization of hedge funds has begun and there are
trillions of dollars at stake. Either way, think of Lays Potato Chips (or
cockroaches, depending on how you feel). You can’t have just one. Goldman
Sachs, the lead underwriter for the Fortress deal and the lead source of the
Fortress talent pool, is also probably their biggest competitor. Strange, huh?
Not really. Wall Street has forever been circular. Remember, there
are more mutual funds—over 8,000 of them—charging 1%-2% fees investing in
stocks than there are stocks on the New York Stock Exchange and NASDAQ
combined. I might as well start another crop circle—a hedge fund buying and
shorting other hedge funds (I’ll start with those that fund Hollywood movies).
How cool is that? I only wish I had the chance to short failed hedge fund
Amaranth.
It seems like a new hedge fund opens every eight seconds. Up from maybe 500
hedge funds in 1990, there are over 7,000 of them today managing over $1
trillion. Crowded? Not yet. The hardest part is raising money, but we’ve come a
long way. It’s no longer a Max Bialystock-like hitting up of rich widows;
Citadel Investment Group in Chicago has $13 billion in assets and 1,000
employees in six offices worldwide. It turns out they also are one of the
largest market makers in options, taking Wall Street on at their own game. Lots
of hedge funds make a market in currencies, too, long a profit center for
banks. Circular indeed….
Read
Andy’s complete article:
http://www.andykessler.com/
____________________________________
Readings /
Kudlow: Bernanke & Goldilocks
http://article.nationalreview.com/?q=ZTRiNWRlZDYzZmRjZDQ0ZGEzNzAwODlhY2VjZjI3MjQ=
Wesbury:
Bernanke Goes To The Hill
http://www.ftportfolios.com/Retail//Research/ViewResearchArticle.aspx?ID=259
Karlgaard:
Moore’s Law Triumphant
http://members.forbes.com/forbes/2007/0226/033.html
The
Future Of Phone And Web Convergence
http://www.forbes.com/2007/02/12/yahoo-google-microsoft-ent-tech-cx_kw_0212wharton.html?partner=telecom_newsletter
Data
Centers’ Growing Power Demands
http://www.technologyreview.com/Infotech/18188/
Why
Vista’s DRM Is Bad For You
http://www.forbes.com/2007/02/10/microsoft-vista-drm-tech-security-cz_bs_0212vista.html?partner=globalnews_newsletter
AMD
Faces Cash Crunch And LBO, Says Analyst
http://www.eetimes.com/news/latest/showArticle.jhtml?articleID=197006371
The Weekly GTI
http://www.gtindex.com/
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