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Pastimes : The Naked Truth - Big Kahuna a Myth -- Ignore unavailable to you. Want to Upgrade?

To: accountclosed who wrote (76543)	11/21/1999 7:33:00 PM
From: Dwight E. Karlsen	Respond to of 86076

It's true: earnings are a drag on stock price performance: L. Keith Mullins, emerging-growth strategist at Salomon Smith Barney, has taken the analysis one step farther, wickedly pointing out one sure-fire way to have made a ton in small-caps: Buy only Russell 2000 companies that are expected to lose money. He jests not. Through November 12, while the Russell 2000 was up 6.6%, shares of those companies in the index that are generating nothing but red ink jumped 49.7%. "People don't care about cash flows," Mullins laughs. "They don't care about earnings. They care about momentum." He has been urging tech investors among his clients to be "very careful." He cites such danger signs as the quickening influx of money into aggressive growth funds, the torrid rise of tech stocks while the advance-decline line is flat and the most frenzied market for initial public offerings he has seen in 20 years. "The average first-day return of IPOs in October was almost 100%,"he marvels, "and that's just not sustainable." interactive.wsj.com from Barrons (subscription required)