This market is sure not easy to deal with, at least not by methods that have worked well over all kinds of markets, and over many years.

Today, the Nasdaq closed within 1 point of a record high. At the same time, 40% of New York Stock Exchange stocks were below their lows of 1998. Clearly, the rich stocks get richer and the poor stocks get poorer. Even the Internet stocks have made something of a comeback, while many "value" stocks are lying around listlessly, in dire need of oxygen.

It's always easier to note the symptoms of market malaise, than it is to come up with a cure. I don't think the diagnosis is too tough, though. The market is benefitting from the most massive influx of fresh money in history. Almost everyone who has at least one eye, one leg, and one-half of an ear is working, and they are throwing all kinds of money into their 401 k's, etcetera, because they know they will probably never stay at their present job until retirement, so they better prepare to retire themselves.

We had a politician in California who liked to say that money was the mother's milk of politics. Well, that goes double for the stock market. Add to this the fact that armies of young investors and fund managers have never seen a Big Bad Bear Market. So the little rascals are fearless. They love the nifty 50 and have been bidding them up. And you know what? They've made a lot of money, while many veteran investors have shied away from high valuation issues, and have therefore shied away from big profits. Ah, Graham and Dodd! Where are you when we need you?

Anyway, High Tech remains the continuing story, and should remain so, as long as their earnings and revenue growth continues positive. My favorite issues include Cisco, Lucent, and Microsoft, although I would wait for lower prices before buying. If you want to own them now, you can always buy a small position just to get started.

You may recall from my past articles, that I prefer secondary and tertiary High Tech issues. I have recommended C-Cube Microsystems, Qualcomm, and SanDisk in the past, and they're still very good in my judgement. SanDisk will report after the close on Wed. 10/13, and I believe C-Cube will report around 10/14. If you can handle the risk and the volatility, they're both potential big movers in either direction, although I'm looking for upside surprises.

I love the Biotech/Genomic stocks more than ever, as more and more of their drugs/products get underway in their marketing, or are close to FDA approval. I know I had said that my next article would feature another stock in this group that I believe has GREAT promise. We'll try to do it next time. Stay tuned.

The Market Pro - October 8, 1999