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2HRS2GO: B2B still the place to be for Amerindo

    Amerindo Funds have never been for the meek.

    The group's concentrated portfolios -- mutual fund observers like to point out that Yahoo! (Nasdaq: YHOO) once made up more than 40 percent of the Amerindo's flagship Technology Fund -- lend themselves to big movements in both directions.

    In 1999, for instance, Amerindo Technology generated the highest annual return among funds followed by ZDII. This year? Down more than 25 percent year-to-date, according to Morningstar.

    A dismal first half in 2000 hasn't stopped Amerindo from swinging new bats. Portfolio manager Alberto Vilar last year said Amerindo would increase its profile in business-to-business plays, and on May 30, Amerindo B2B Fund debuted.

    Amerindo showed good timing, to say the least. Going into today, the Nasdaq Composite Index had gained more than 16 percent since the new fund's emergence. The B2B Fund is up more than 79 percent since inception, said Michael Sandifer, one of Amerindo's fund managers.

    How does an individual play B2B? Naturally, Sandifer wants you to buy into his fund. But you don't have to own Amerindo B2B to follow its general philosophy.

    There are no great revelations in the B2B portfolio. "It's the names you'd expect, like Ariba (Nasdaq: ARBA)," Sandifer said in a phone interview this morning.

    Will the B2B Fund struggle at times? Of course. Sometimes it'll feel like a boat riding a financial Styx. Heck, this year is seeing the second extended lousy period in four years for Amerindo Technology D shares, which saw a return of -18.1 percent in 1997.

    Yet past studies have shown aggressive growth funds tend to outperform other types in the long run. Yes, Amerindo D has been a dog twice in four years, but its average three year return from ྜྷ through ྟ was more than 117 percent.

    You probably shouldn't overload your portfolio with the Amerindos of the world, because no one needs that kind of heartburn. But don't get rid of them in tough times either.

    "If in fact we are correct in our analysis ... we can often hold a company for three, four, five year and we will live with what the market normally gives us, which is significant volatility," Sandifer said.

    Playing B2B doesn't mean just buying into a marketplace like Ariba or a Commerce One (Nasdaq: CMRC).

    Amerindo often buys into companies at the IPO stage. About 40 percent of the Amerindo's research focuses on privately-held firms, Sandifer said. Amerindo will snap up shares in the first two or three weeks after a company goes public, as the float turns over several times and the stock price takes a dip following the initial IPO pop.

    So what sectors is Amerindo examining for future investments? Sandifer wasn't too specific.

    "The concentration of names would be in the continued buildout of the B2B opportunities, and the continued rebuild of the telecom infrastructure," he said.

    Telecom infrastructure as a B2B play? Why not, when you consider that much of the network buildout is driven by business-to-business demand. Optical networking might be seeing rapid consolidation -- often a sign of a maturing industry -- but there are still emerging companies to be had, because the sector is growing so rapidly. Sandifer likes optical networking companies like Sycamore Networks (Nasdaq: SCMR) and Juniper Networks (Nasdaq: JNPR), both of which face huge untapped markets.

    Of course, Amerindo has a vested interest in talking up its favorite sectors. All funds do.

    But that doesn't mean they aren't right. 22GO>