By Jonathan Higuera
June 2000 - Omar S. Rivero believes the Internet will revolutionize the way business is conducted, in the same manner that Henry Ford's auto factories changed American mass production. In fact, he remains confident in his new iMillennium mutual fund, even as technology stocks roller-coaster through the NASDAQ.
Mr. Rivero received approval in March from the Securities and Exchange Commission to distribute a prospectus and begin raising money for the open-end, no-load fund, whose focus will be the Internet and Internet-related stocks. As president, owner, and founder of Houston-based iMillennium Capital Management, he will manage the fund full time.
Mr. Rivero, who managed private assets before starting iMillennium, expects to start with nearly $10 million under management, most from previous clients. The Cuba-born Texas A&M graduate, who has been a stockbroker, lawyer, and investment firm owner, prefers an investment horizon of at least two to five years. He recently discussed his decision to focus solely on the Internet and Internet-related companies.
HB: How do you define Internet economy?
OR: I define the Internet economy as an economy in which businesses incorporate the Internet in order to improve their business prospects – whether it's to obtain more customers, improve interaction with existing customers, improve distribution of existing products or content, improve operations, improve purchasing power, or otherwise.
HB: What kinds of companies will your fund target?
OR: Those companies that show, through their actions, an understanding of the potential and power of the Internet. For example, General Electric's Jack Welch has publicly proclaimed that the Internet will be a focus of his company, and he has taken steps to engrain that philosophy and attitude within his organization.
HB: Basically, how do you think the Internet economy will develop?
OR: I firmly believe the Internet is still in its early stages of development. I don't think we've scratched the surface in terms of how it will impact consumers and how companies will ultimately adapt and embrace its potential. I do, however, think broadband connectivity will start another "inning" in the Internet ballgame. When the majority of consumers are able to access the Internet on broadband pipes – whether via cable, DSL, or otherwise – I think we'll begin to understand the potential of the Internet as a quick, convenient way to communicate with each other, shop, plan, and manage our daily lives, and generally be entertained.
HB: Does the recent NASDAQ roller coaster indicate anything to you as a portfolio manager?
OR: It indicates to me that perhaps there were many individuals speculating – I don't believe investing is a proper word here – with borrowed money on various technology companies without having done their homework. When the market turned sour, as markets tend to do without rhyme or reason, brokers called those loans in.
HB: How can Hispanics participate in the Internet economy?
OR: Embrace and adopt the Internet in their own lives. We tend to be conservative in our ways and take a wait-and-see attitude with regard to many things, especially financial matters. We cannot afford to be left behind in this area. I firmly believe the Internet is as revolutionary now as Henry Ford's production line was then. The advantage we have is that we haven't begun to scratch the surface in terms of its potential. That means there are still many opportunities to invest in this new economy while it is still in its early stages.
HB: How do you view the life cycle of Internet companies?
OR: As I've stated earlier, I strongly believe that we are still very much in the early stages of the Internet. What that means is that many of today's Internet companies will ultimately fail. The key is to identify and invest in those companies that are leaders, by virtue of their technology, product, customer service, first-mover advantage, and so on. Invest with a long-term investment horizon of three to five years and continuously monitor your holdings for fundamental changes in your company's businesses.
HB: What will set your fund apart from others?
OR: iMillennium Fund will focus on those companies that are presently the leaders or, more importantly, will be the leaders in their respective industries. We will focus completely on Internet and Internet-related businesses. You won't find companies in our portfolio that are simply there because they happen to have a Web site.
HB: Why did you decide to start this fund right now?
OR: If not now, when? Never leave for tomorrow what you can do today.
Jonathan J. Higuera is a business writer for the Arizona Daily Star in Tucson, Arizona.
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