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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: Lars who wrote (9975)	11/19/1999 3:36:00 PM
From: Wally Mastroly	Read Replies (1) \| Respond to of 15132

Lars, Interesting commentary on the Russell 2000 in your last link: >>>Is the Russell Ready to Break Out?...The Russell closed today very near a 52 week high. We're still about 10% below the all-time high set in 1998, but the Russell has had quite a ride since mutual fund tax loss selling abated some weeks ago. Is it really as healthy as it seems? Not by a long shot. Whether you are aware or not, it's technology stocks that have been driving the Russell. At the moment, 19% of the total Russell cap is made up of technology stocks. A few skyrockets like Sycamore have significantly impacted the Russell. As you may know, the Russell index has a cap limit of $1.5 billion for each participant. Also, the Russell index is only reset once per year (in June). When a company likes Sycamore ascends to a reasonable valuation such as $14+ billion, it remains in the index until the following June (and continues to have a major impact). The unadulterated infatuation with technology in the Russell average acts to hurt other "sectors" of the Russell. Year-to-date, the Russell Tech Index is up 64%, yet the consumer staples sector is down 16%. Get the picture? According to Prudential, without Internet exposure, the Russell 2000 would be down 1% year-to-date............... Before you get too excited about small cap stocks and the Russell coming close to a 52 week high, make sure you understand what is happening inside of the index itself. In some senses, this index is just as much a mirage as the top NASDAQ weightings create in that index.<<< - contraryinvestor.com