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To: A. Wayne who wrote (2804)	5/16/2000 4:12:00 PM
From: Ram Seetharaman	Respond to of 2946

SVGI is at an early stage of expansion, that could last five or more years. The dog days are over. So the stock can rise to $ 50+ within the next few quarters, with the understanding that earnings will beat expectations consistently!

To: A. Wayne who wrote (2804)	5/17/2000 4:32:00 PM
From: Ram Seetharaman	Read Replies (2) \| Respond to of 2946

Here is a new one! A value manager, Martin Whitman, thinks SVGI is safe! Wow! Wednesday May 17, 2:39 pm Eastern Time Small- and Mid-Caps Have Their Day By James Welsh, Mutual Funds Columnist While the average diversified fund has losses for this year, small- and mid-cap funds have posted gains. It has been a long time coming, but value investors who stuck with small- and mid-cap funds are finally having their day in the sun. After taking a prolonged beating, both categories are showing gains for the year -- a rarity in the current troubled market, where the average diversified US fund has lost more than 1% this year. Small-cap value funds had gained an average of more than 4% year to date by May 11, according to Lipper. Their mid-cap cousins were up by 3.85% for the same period. But large-cap value funds are still lagging. They showed averaged year-to-date losses of 1.7% -- not as bad as the 4.3% lost by the average large-cap growth fund, but still nothing to write home about. Yearning for Earnings What's sparking the fire for small and mid-cap value stocks? For one thing, there's the issue of rising interest rates. Growth companies can be hurt by higher capital costs. For another thing, those absurdly high valuations finally caught up with technology stocks. Many tech stocks are still considered overpriced, and some fund managers believe we haven't seen the worst of it yet. ``We still have valuation extremes that are pronounced,'' says Cathy Cole, head of value investing at Banc One Investment Advisors. ``I think we need to see another correction.'' And finally, investors seem to be falling out of love with high-priced stocks in companies that don't even make money. They want to buy into companies with real earnings and reasonable stock prices, and that's precisely where small- and mid-cap value funds can be found. This could last a while, because value stocks were beaten down so badly that plenty of bargains will be available until their valuations catch up. ``It's important to know that these trends typically last years, not months,'' says Janet Brown, president of DAL Investment Company in San Francisco. ``You do not have to get in on day one.'' Value Funds With Valid Gains Of course, not all value funds are digging their way out of the red. Some had managed decent gains even before the tide changed, despite the market's bias toward growth stocks. Here's a quick look at five funds that went into the market shift already ahead of the game. At Janus, the Special Situations Fund (Nasdaq:JASSX - news) racked up a 52.5% gain in 1999, and rose 7.4% year to date through May 16. Fund manager David Decker likes to find companies that have some catalyst in the wings that could cause a turnaround, such as new management, corporate restructuring or innovative new products. Morningstar classified Special Situations as a large-cap value fund, and it's true that the holdings do include the likes of Apple Computer (Nasdaq:APPL - news). But Decker goes wherever the value is, and that includes smaller companies such as Federal-Mogul Corp. (NYSE:FMO - news), a marker of auto parts and drive train systems. With a gain of 14.3% in 1999, Berger Small Cap Fund (Nasdaq:BSCVX - news) is ahead by 8.6% so far this year. Co-managers Thomas Perkins and Robert Perkins have an eye for unappreciated gems such as Old Republic International Corp. (NYSE:ORI - news), a title insurance group whose stock has gained nearly 30% this year. At Third Avenue Value Fund (Nasdaq:TAVFX - news), manager Martin Whitman has gained 17.4% this year and carved out a 12.8% gain in 1999. Morningstar praises him as a deep value manager who only buys stocks he believes are cheap and safe. His holdings include Financial Security Assurance Holdings (NYSE:FSA - news), a bond insurance holding company, and Silicon Valley Group (Nasdaq:SVGI - news), a maker of water-processing equipment for the semiconductor industry. They have gained more than 44% and nearly 50% respectively this year. Oakmark Select Fund (Nasdaq:OAKLX - news) is ahead by 12.7% year to date and rose 14.5% in 1999. Co-managers Bill Nygren and Henry Berghoef like typical value stocks such as financial-services company Washington Mutual, Inc. (NYSE:WM - news) and USG Corp. (NYSE:USG - news), which makes gypsum, wallboard, and other construction materials. Transamerica Premier Value Fund (Nasdaq:TPVIX - news) is still relatively new, but is carving out a nice value niche for itself. Manager Dan Prislin has the fund ahead by 15.1% year to date and it gained 7.4% in 1999, the fund's first full year. Prislin likes sturdy value companies such as American Power Conversion Corporation (Nasdaq:APCC - news), which makes power-protection equipment for computer systems worldwide. Premier Value fund analyzes stock prices on a company's ``intrinsic value,'' measured against the market. Says Prislin: ``It all comes down to, 'What is my purchase price, relative to what I think it's worth?''' James Welsh is a freelance writer and columnist who specializes in mutual funds. Go to www.worldlyinvestor.com to see all of our latest stories.