The Kinetics Internet Fund, the first mutual fund to enter cyberspace, ran up to $1.5 billion in assets at its height, returning 216% in 1999 under Ryan Jacob's watch. With $245 million in assets today, the fund is down 29% year-to-date. Coming off such spectacular highs, its five-year return is still a respectable 22%.

Peter Doyle, chief investment strategist of Kinetics Mutual Funds of White Plains, N.Y., and manager of the flagship fund, likens Internet funds to "publicly traded VC." Of the dot-com run-up: "It was beyond crazy," Doyle said.

Favoring content providers Washington Post Co. and Kaplan to high-tech Internet build-out firms, Doyle predicts "Nasdaq is going down 80% more."

Ultimately, Doyle said, better days will reward the Internet, which "is about distribution, not go-go technology."

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