Market Report from Andreas Kaegi


Andreas Kaegi is one of our International E-Club advisors.

The story is not new (first articles were published in early 1999 claiming it will be a multibillion $ market by 2003 or 2005) and I am afraid the markets already reflect what bright or dismal future is ahead for some of these tech companies. The development is one of the reasons for the strong movement and heavy volatility in the Nasdaq market.

The charts in http://www.quicken.com/ for the following stocks reveal:

  1. A tremendous performance for most of the companies between late 1999 and March 2000
  2. Heavy volatility in price
  3. A few of them are still in favour and on a very a high level
  4. The majority has corrected down again because of the uncertain future earnings and a questionable final break through

The companies in the business among others are; AND, ACVC, EDOC, INTV, IPVC, IVOC, LHSP, NTVT, ONEV, PFVI, MEMO, PHCM, VMII, VPTI, VSTR. Please note this is by no means a recommendation list – I prefer any diversified high tech fund to investing in these volatile individual stocks. Quite a lot of companies are still privately held and venture capital funded. You may wish to visit the website http://www.speechworks.com/ for further insight to the technology – this company may even soon have an IPO – but again this is not a buy recommendation.

Who else will profit in this business? Many long established companies that are already making solid profits for years because they will be main sup pliers to this fast growing market. So rather go for those than for the new service companies. The future is that the mobile phone will be the interface to everything making you capable to pay at the grocers next door using it as a credit card and to turn your heater or air conditioner on in your house while you are on your way home – and all controlled by your voice.

What is needed for the final break through of the personal butler/assistant service?

  1. Lots of WAP capable mobile phones as everybody wants to use the technology and lots of chips as every cellular phone and all the servers need chips. Therefore think of companies such as Nokia, Ericsson, Motorola, Intel, Adv. Micro Devices, Lucent – but again do not overpay and do not buy at unrealistic high PE and PEG ratios.
  2. Automated voice identification must be perfected – IBM and the Dutch Phillips are leaders here.
  3. All voice traffic needs carriers – but will they be paid an attractive price when the service should be free to a toll free number? And considering there recent billion $ investments into new licenses? – No recommendation here at present.
  4. The most advanced technology for remote control that only needs software to be switched to voice control has Echelon Corp (ELON); again a speculative and very volatile stock.

Best regards
Andy
Andreas Kaegi


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