"Human creativity produces new enterprises with ideas that can change the world. Our job is to find them. Our clients' more difficult job is to concede to us the freedom and responsibility to take investment risks over many years."
- Richard Gilder.
Operational Update- WHAT WE DOGilder Gagnon Howe & Co. manages investments for individuals on a discretionary basis. Our clients are diverse in many respects but united in one: they wish for their money to grow significantly and are prepared to take a measure of risk over a number of years.We focus on individual companies, not markets, and invest based on our own independent research, relying on fundamentals relating to a particular company and its industry. Our breadth of experiences serves to test each idea from a variety of angles before making the investment and during the many years we may stay with it.OUR BELIEFS1. There's no such thing as a safe stock.
2. By taking research-based risks, we can, over the long term, earn above-average returns on investments in common stocks.3. It's a partnership: our job is picking great stocks; our clients' more difficult job is to stay the course.4. Capital growth is achieved only with patience over many years.5. While many investors try to create wealth, few succeed. The rest lose heart.WHO WE AREWe are a firm of stockbrokers united by our belief in growth investing for the long term. We each have different ways of analyzing companies and managing client accounts, but we work together to tap the group's diversity of ideas and opinions.Although we share information, we often don't invest in the same stocks or at the same time. In fact, we occasionally find ourselves on opposite sides of a security.While each broker is responsible for his or her own investment decisions, we are aided by our analyst colleagues who scour the market for growth opportunities; our account managers who help execute our investment programs and help clients; and our traders who connect us to the markets.GGHC is member of NYSE Euronext, FINRA and SIPC and is a Registered Investment Advisor. - Our History1968R. Gilder & Co. starts with a seat on the NYSE and $25m in assetsRichard Gilder buys a seat on the New York Stock Exchange and starts R. Gilder and Co., a brokerage firm focused on discretionary growth investing for individual investors. Located near Central Park at 3 Columbus Circle, the firm opens its doors undertaking its own clearing (back office), with over 50 employees and about $25 million under management.1969-1970Down 70% in the first two yearsAlmost immediately, we hit a rough road as the market drops. Performance is down dramatically. Some clients stay, some leave. At the bottom, the firm decides to turn to others to handle clearing functions. R. Gilder and Co. shrinks to six employees and $6 million under management.1970sThe firm invests in new companies - among them, a new retailer called WalmartThe market goes through its worst spell since the 1930s, but the firm grows steadily to $25 million, once again, and 21 employees. By now, partners Neil Gagnon and David Howe have joined the firm, and a number of promising juniors signed on. The firm buys a computer to help with stock allocation.1980sTwo-decade bull market beginsA supply-side program energizes the economy, while the punishing, sky-high interest rates begin their long decline. A long bull market ensues.On Monday, October 19th, 1987, the Dow Jones Industrials drops 22%, the worst single percentage day loss since 1929. Later in the week, Dick Gilder writes a special letter to clients, suggesting they add money to their accounts.1990sThe online revolution beginsGGHC has $1 billion under management in 1991 and takes additional space at 3 Columbus Circle for its 48 employees.Many of the brokers at GGHC become interested in China and its broad growth prospects. At one point, a third or more of clients' money is invested in Asia. Although we consider stationing someone in Hong Kong full time, the collapse of prices in 1994 cools our ardor.The online revolution begins. The Nasdaq closes over 1000 in mid-July 1995, up five times in five years. Amazon, selling books over the Internet, goes public, even though it has a record of consistent losses. The Internet is going to change the world. GGHC invests in many of these new companies.
The tech and market excitement grows, and clients pour into GGHC. Most brokers at GGHC end 1999 with triple digit gains. We are up to 70 employees and have $11 billion under management.
2000sWe survive two crisesThe Dow peaks in January 2000, up ten times in 17 years, and Nasdaq peaks in March. The bubble bursts. By September, the last few technology stocks surrender to a relentless tide of selling. The Dow dropped almost 37% and the Nasdaq bottomed in October for a decline of nearly 78%. Investors suffered huge losses. Those who started in the six months before March 2000 suffered losses of 80% or more. Some clients leave, but most stick it out.On a clear morning of September 11th 2001 America receives a shocking blow. The markets close for the week and reopen the following Monday, down hard. The Fed cuts rates to lows not seen since the 1950s. The country and its economy, however, are resilient. By year-end, markets are recovering, and GGHC has about $4 billion under management and about 90 employees.
The credit crisis of 2008 claims established financial institutions. Bear Stearns, our clearing partner, is acquired by JP Morgan. Lehman falls. Other banks take government financing to maintain the faith of their depositors. We emerge with $4.5b in assets, 84 employees, and an intact belief in entrepreneurship.
TodayThe markets recover. We continue to seek what is new.New regulations designed in reaction to the collapse of the bubble, along with new anti-terrorism and money laundering regulations have altered the playing field. Markets, however, continue to recover, driven by growth in the economy and worker productivity. The rise of China and India causes long-dormant commodity demand to soar. Overseas entrepreneurialism is once again attracting our interest. Human creativity and innovation continues to produce new enterprises with ideas that can change the world. Our job is to find them. The world inevitably changes, yet our mission remains the same: "to seek, to find, to own, and to sell with great reluctance." - CONTACT USEmail:
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