1968 Richard 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.
1969-1970 Almost 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.
1971-1979 The Dow pitches and heaves, but goes nowhere. The 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.
1980-1986 Running on a tax-cutting platform, Ronald Reagan is elected. His supply-side program energizes the economy, while the punishing, sky-high interest rates begin their long decline. A long bull market ensues. The Dow closed above 1172 for the first time in 1983.
1987 On Monday, October 19th, after a 100 point fall in the Dow on the previous Friday, the Dow Jones Industrials drops an epochal 508 points - a 22% fall, 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.
1991 GGHC has $1 billion under management, and takes additional space at 3 Columbus Circle for its 48 employees.
1992-1994 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.
1995-1998 Stocks have been doing well for nearly a decade since the crash of 1987, but now the real 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. It is followed in less than a year by Netscape. The internet is going to change the world. GGHC invests in many of these new companies: most accounts show heady month to month gains.
1999 The tech and market excitement grows, and clients pour into GGHC. Most brokers at GGHC end the year with triple digit gains. We are up to 70 employees, have $11 billion under management, are running out of space, and considering moving.
2000 The Dow peaked in January at 11,722 (up over 10 times in less than 17 years) and the Nasdaq in March at 5048. 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 at 1114, for a decline of nearly 78%. Investors suffered huge losses. Those who started in the six months before March 2000 suffered losses of 70% to 80%. Some clients leave, but most stick it out.
September 2001 On a clear morning - the 11th - 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.
Today New regulations designed in reaction to the abuses 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."

Copyright 2005 Gilder Gagnon Howe & Co. LLC

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