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Technology Stocks : Rambus (RMBS) - Eagle or Penguin -- Ignore unavailable to you. Want to Upgrade?

To: Don Green who wrote (33155)	10/28/1999 1:28:00 PM
From: pompsander	Read Replies (2) \| Respond to of 93625

Don: I am glad you are long with the rest of us. I know you expect the stock to skyrocket --come on, be honest. Oh, and be sure to let us know when you sell. Not too soon, now.

To: Don Green who wrote (33155)	10/28/1999 1:40:00 PM
From: Don Green	Read Replies (1) \| Respond to of 93625

Bear Funds Start To Growl By MARK MCLAUGHLIN October 28, 1999 Smartmoney.com (This story was originally published Wednesday.) NEW YORK -- Short-selling bear funds that behaved like sick cubs through the bull market of the 1990s are beginning to stand up and growl. While the S&P 500 lost 4% over the past three months, the seven bear funds tracked by Lipper gained an average 3.1%. The best of the lot, ProFunds Ultra Bear Fund and Prudent Bear Fund (BEARX), rose 11.1% and 13.0%, respectively. Not that this performance is going to get these funds a cave full of new deposits. Bear funds are still used predominantly by the relatively small world of market timers. Despite inflows of $366 million in the third quarter, the funds represent just $1.23 million in assets. That's 1/70th of what's in the Vanguard 500 Index (VFINX). But for investors looking for a hedge against declines, it's good to know the funds are, for the most part, performing as promised. "If you do believe that we have seen the end of the bull market, these funds allow you as an investor to be actively in the market rather than in cash," says Mark Edwards, manager of Potomac U.S. Short (PSPSX) and Potomac OTC Short (POTSX). While these funds have lost money over the past year, Potomac U.S. Short is up 6.1%, while OTC Short is down 7%, both over the past 13 weeks. But don't go trading your current growth fund for a fund of the bearish variety. Rydex Ursa Fund (RYURX), the oldest of the short-selling funds, has lost 14.7% a year since its 1994 inception. Prudent Bear manager David Tice, who made headlines when he recently questioned the accounting practices of Tyco International (TYC), sold short 109 stocks in his $221 million fund during the first half of his fiscal year (ended September). During that period, his largest short positions were in Dell Computer (DELL), Gateway (GTW) and chipmaker Rambus (RMBS). Tice wouldn't comment on how those positions did. "Technology is notoriously cyclical and should not carry these multiples," he says. "A slowdown in demand is upcoming." Tice also shorted IBM (IBM), which he believes will continue to tumble in part because of slowing PC sales. Already the stock is off 30% from its July high of $137. Other money-makers for Tice have been Coca-Cola (KO), which he shorted at $61 and watched fall to $48 by quarter's end due to declining earnings growth and problems with bottling operations, and US Airways Group (U), which has fallen 60% from its 52-week high because spiraling costs. Most of Prudent Bear's competitors use optionsCK to bet against stock market indexes. Those that short the S&P 500, like Rydex Ursa, Potomac U.S. Short and ProFunds Bear and Ultra Bear - the group is up 8.8% in the past 13 weeks - have done much better than those that short the Nasdaq. Since the tech-heavy Nasdaq has climbed 5% in the past 13 weeks, Potomac OTC Short has fallen 7%, and ProFunds Ultra Short OTC (USPIX) is off 15.9%. If you want to make a contrarian bet with one of these funds, we recommend a bear fund that bets against an index. They are less volatile and have lower annual expenses than actively managed funds like Prudent Bear. Trouble is, Rydex requires a $25,000 minimum investment, ProFunds $15,000 and Potomac $10,000. But once you establish an account, that investment can be spread across any number of long or short funds. "I've read that these are stupid funds because the market is [almost always] going up," says ProFunds President Louis Mayberg. "[In a market decline] these funds can lower your risk profile temporarily. When the market resumes an upward course, then you get out." That's if you're smart enough to know when the real incline has begun. interactive.wsj.com