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One of last year's top performing tech funds is hanging in there in this year's choppy market. Perhaps that's because it's portfolio manager doesn't invest in dot-coms or PC companies. Or maybe it's because of the fund's Silicon Valley location.

Kevin Landis has been portfolio manager of the Firsthand Technology Value Fund, (888-883-3863), since its inception in May 1994. Last year the fund's total return was a whopping 190.4 percent. This year it's up over 34 percent.

Ask him if there is anything that's misunderstood about the fund and he'll tell that even though the fund is dedicated to technology, he's never held a dot-com or PC company in its portfolio. Instead, Landis is a trend seeker who prefers investing in the "unobvious" companies.

Here's a peek at how this engineer and one-time product manager for a chip company turned portfolio manager thinks, and, some of the reasons for the investment picks he has made:

Q: Looking forward, what do you think the face of technology is going to look like next year or in five years to come?

Landis: I think the five years is more interesting but here's how we begin the process ( of looking ahead). We close our eyes and wonder what the world is going to look like in five years; figure out what are the big trends might be, distill the powerful trends then try to figure out which companies will make them happen. So we sort of look at the whole food chain that's involved.

For example, in 1996, we were investing in bandwidth stocks before the whole world started talking about Internet infrastructure.

Q: Does your location, as the only fund family located in Silicon Valley, have anything to do with how you think?

Landis: Absolutely. We are surrounded by people who are all different and coming at it (technology) from different directions so you get a feeling for the volume of information around.

I remember at one point early on, someone talking about how much information was on the hard drive on their computer and how much was on all the other hard drives. And, how if you threw a switch and suddenly connected every computer to every other computer and just shared one-tenth of one percent of that, just how much traffic that would be. This is the way engineers look at things. So we decided early on that it makes sense to just place a bet on Internet traffic growing. That was back in 1996.

So we didn't need to predict Napster. We just needed to predict that Internet traffic would grow in lots of unpredictable ways so we started buying building block technology companies like PMC-Sierra and Applied Micro Circuits. These were companies whose customer list reads Nortel, Lucent and Cisco.

Q: Semiconductor capital equipment is a small part of the fund. Why?

Landis: If you go to the companies that make the semiconductor capital equipment, then you are exposed to the entire semiconductor world and that's pretty broad. On the other hand, companies like PMC-Sierra were a beautiful opportunity because all they did was build chips that move data. That's exactly the trend that we thought we were safe in betting on--- growth in traffic.

Q: Why haven't you owned PC or dot-com companies in the portfolio?

Landis: We didn't own the dot-coms because that was, in our minds, a risk we didn't need to take.

As for the PCs, I don't like that business. These companies are pretty far down the food chain and don't have much product differentiation from one to the other. So I was much more comfortable owning Intel than owning someone like Dell. And for most of the 1990's, particularly the latter half, the PC industry really hasn't been where it's at. That's not the exciting part of high tech.

Q: The exciting part has been?

Landis: communications technology. It's not about computing, its' about moving information.

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