In fact, if you are well diversified, studies have shown that security selection, (stock picking) accounts for only a small part of a portfolio's overall return. The majority of a portfolio's return comes from the types of investments stocks chosen versus bonds for example, rather than which particular stocks or bonds you own.
 
 
The way one views economics will greatly effect the kinds of things one thinks are important. We believe that the real engine of prosperity is the creative activity of public and private companies, what the Government does is simply a noisy distraction. Except to the degree that the Government helps insure that we have open, fair, and free international trade, they are simply a cost factor, part of the fixed overhead of operating a business. This is true, regardless of how entertaining a show they put on in Washington or how much attention is focused on it by the media.

No one alive today has a better understanding of or ability to communicate about the new technology that is sprouting all around us than George Gilder . Gilder is something of a cross between a charismatic evangelist and a brilliant scientist with a little bit of a gossip columnist thrown in. He knows the people, the companies, the technology and where it is all going better than anyone we have read.

SOME THOUGHTS ABOUT ECONOMICS

Gilder's economic thinking is based on that of Joseph Schumpeter. Schumpeter, is best know for his description of INNOVATION as a process of "creative destruction". He was the first, and most eloquent of the modern economists to understand that economic process is not primarily an issue of the ebb and flow of the Federal funds rate, commodity prices, and government spending.

We currently live in the most "creatively destructive" age in all of human history. It is the technology and the companies on the leading edge of this wave of innovation that are far more important to watch than Government statistics about inflation, and rates of interest and unemployment. Here you will find good current industry opinion as well as a great hyper-linked directory of the companies themselves.
 
 
As bruised and battered as America may be, it is in some ways stronger than ever. Our companies are leaner and more flexible. Our products are more in demand worldwide. Our leadership in key areas of technology has grown stronger than it has ever been. And our government, for all its problems, is still one of the most honest you will find globaly.

What about trade deficits? They have become virtually meaningless. Only commodities and the simplest of products can be accurately sourced to a particular country of origin. The more complex and valuable the product, the more likely that it will be an amalgamation of parts and services from all over the world.

We will at some point begin to recognize that international trade has become such an interwoven fabric that even measuring, deficits and surpluses between nations, much less worrying over, will make about as much sense as trying to measure such things between American states.

Is Florida's vacation dollar trade "surplus", a vacation dollar "deficit" for the rest of the nation? How about Idaho's potato trade "surplus"? Are the rest of the states in a potato "deficit"?

As we move toward the end of this century, America is emerging not just as the leader of the free world, but the center of it. We are in a position much like the British Empire was when it rose to dominate the industrial revolution even after the weaknesses that led to the upstart American colonies breaking away. We have, with the "technology revolution" been given a new lease on our position of world leadership.

Keep in mind that this "technology revolution" is not just about computers. It is about working more intelligently and more efficiently. Computers are doing for human ingenuity today, what the invention of machines did for human muscle a hundred years ago.

Politically, as nation after nation moves out from under the cloud of communism and toward free markets and private ownership, America's position as oldest, largest, and most stable democracy in the world is helping as well. Even if we feel a bit cranky and old, we were the first to emerge from the cradle. And we have the longest and bravest history in developing and defending free markets.