As a loyal reader, and because you generally take the Market Pro's advice, you're stocks are in pretty good shape. right? Hell no they're not! I'll bet you've had your butt kicked since our last column last Wednesday. Of course, hardly anyone has escaped, and even yours truly has caught a little shrapnel.

But that's the trouble with investors taking advice from people who should know what they're talking about - battle scarred market veterans like me for example. When the market is going up, everyone's a genius. Everyone has stock ideas, and most of them work out O.K. So people get a lot of undeserved market confidence. When you see any professional, in medicine, dentistry, law, or whatever, you figure "this guy has a lot of training, so I better listen to what he tells me". After all, you wouldn't know how to begin drilling your teeth.

But with stocks, all you need is an idea that you're lucky enough to have work out, and then voila! You're an expert! Congratulations. Three months ago every little jerk in the country knew how to make a fortune in the market. Why, surveys were showing that many new investors thought that 35% annual returns were normal. They also said they were in the market for the long haul. Well, I'm sure there have been a lot of rude awakenings, and some long- term investors have suddenly become market timers and have switched to money market instruments or bond funds.

Such switching is right for this down-leg in the market, but the problem comes when it's time to get into stocks again. That's when most market timers miss the boat. They don't have the nerve to get in, and when the market goes higher, they resort to praying for it to go down so they can get back in. But the market more likely than not, will just get away from them.

If you took my advice and practiced Stock Lent, you would have avoided margin. chasing high flyers, buying stocks that went down a lot because you knew when a stock couldn't go lower, bought electric utilities, and accumulated cash. If you have not listened, and instead have been a bad boy or girl and did whatever the hell jumped into your mind, you got killed. And if you've been listening to your broker, you probably got killed twice over.

This is one of the deadliest, take no prisoners markets, that I have ever seen. And I've seen some baddies. They're bashing the technology and financial favorites now, along with the secondary and value stocks I love, including my treasured Biotech/Genomic stocks. In fact the Russell 2000 hit a 52 week low today.

Look at what happened in the last 5 trading days:

I didn't go out of my way to find these disasters, as they are among the stocks I track daily. Some are potential buys, and some serve as market/sector barometers. I have added sound effects to supposedly higher quality stocks that "shouldn't" have gotten beaten up like this!

Anyway, the point is that with the Dow Industrials down 1 1/3% during this period, the Nasdaq down 13%, and the Russell 2000 down 11%, many stocks fell 15-20% or more! The rare bright spot was the Dow Utilities up 4%.

All we can do now is sit tight. As always, if you're nervous or must raise cash but you like your stocks, sell one-half your position. That goes for both winners and losers. If any stock has diminished prospects, sell it and stop praying for rain. Just bite the bullet and move on. Aside from that, you remember we told you the market would be rocky from now to the end of December. That's when the real bargains should appear. With the market in such disarray, I wanted to give you this overview rather than finish telling you about Stock "X". We'll try to do that next time. In the meanwhile, if any thought here sticks with you, let it be that you should accumulate cash. Because CASH IS KING! Stay tuned.

The Market Pro - October 7, 1998