Signs of a Market Top?

Investing

Published: March 28, 2007 11:21 am

From Ticker Sense

Last week’s announcement that the Blackstone Group was filing to go public even though the company specializes in taking public companies private was taken as a signal by some that things are getting as good as they are going to get and therefore the market is peaking.

Yesterday, we came across another indicator that some are surely to point to as evidence of a peak in the hedge fund world – George Gilder has launched a hedge fund called the BetaZero Gilder Technology Fund. For those who are not familiar with George Gilder, in the late nineties he gained a huge following picking tech stocks. At the height of the craze, mere mention of a stock by him would, in many cases, result in triple digit returns within hours. However, once the bubble burst, the stocks he touted fell almost as fast. The Boston Globe put it this way:

By the mid-’90s, Gilder was confidently touting ”telecosm" (theconvergence of communications systems and computers) as the next bigthing — and making a fortune giving speeches and investment tips.Telecom stocks soared whenever Gilder flashed them a thumbs-up, amarket phenomenon that became known as the Gilder Effect. He wasearning $100,000 a speech, and his company was being groomed for a $200million public offering. Then the roof caved in, as hundreds of telecomcompanies went bust overnight.

"Most subscribers came in at the top of the market," Gilderrecalls of those dark days, when even his chief financial officer fileda lawsuit against him. ”So the modal experience of the GilderTechnology Newsletter subscriber was to lose virtually all of hismoney. That stigma has been very hard to overcome."

It will certainly be interesting to see how much money Mr. Gilder raises.

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