Mr. Parnes: Our strength is we like to customize portfolios to the objectives of the clients. We base it on our aggressiveness, our discipline and our motivation. We try to select issues that not only have fundamentals behind them but that also are technically set for appreciation in long positions or, of course, for depreciation in short positions. Normally, we try to maintain a time frame from one to five years on accounts. We consider ourselves disciplined in that we can wait and hold positions to maximize the profit. We have key days, for example today. That means we have been sitting down through these downturns and upturns on many issues where we have taken positions in the accounts for a period of perhaps a year or two where profits have been maximized. We were not bothered by the fluctuations in the market unless we see some happenings that require a different decision. Normally, we have our own method of tracking each position under our customized matrix whereby we have to allocate a different correction phase for each equity. Therefore, if an equity has a high beta whereby it could either be technology or another form of the Internet, chances are the correction phase for those equities may vary from 30%-50% and greater. If these issues are on the ascent, chances are we maintain that matrix position throughout in order to achieve the objective of the customized portfolio.
TWST: Could you explain by example what you mean by 'correction phase'?
Mr. Parnes: Let me give you an example. We chose to select Ariba (ARBA),
Commerce One (CMRC), Inktomi (INKT), STMicroelectronics (STM) and
others. When we bought those issues sometime back in July and October
1998, these stocks had a tremendous fluctuation per day trading subject
to the announcement of various pros and cons, during which they had a
correction phase of 20% or 30%, sometimes 50%. We maintained those
issues without being sold out. Our discipline is to carry the positions
for a three- to four-year time frame. Some of these issues have doubled
and tripled in not quite a year. other issues, for example, we are
maintaining the same positions. We have not yet sold Yahoo! (YHOO),
Microsoft (MSFT) and Intel (INTC), where we feel comfortable holding on
and not selling off when the correction within the market is taking
place within our matrix pattern.
Tickers included in this excerpt: AMAT, AMZN, AOL, ARGA, AXP, BAX, BBY, C, CC, CMB, CMRC, GDT, GE, IBM, INKT, INTC, KLAC, KLIC, LCOS, LSI, MDT, MSFT, OXHP, PVN, STM, T, TGT, YHOO
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