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To: Bruce Brown who wrote (2210)	2/15/2001 9:08:42 AM
From: Mehitabel	Respond to of 3350

Hi, Bruce. Thanks for your thoughts on the trading/buy-hold dimension. You are quite right-- this has been a year when the buy and hold strategy seemed a little simple-minded after the fact. I'm not sure for myself what the final "lesson" from last year will be, altho one of them is this: In 1999, analysts and media people pounded and pounded on Dell, with coverage primarily negative, and Dell shares did not participate in the rise in the market in the last quarter of 1999. In 2000, analysts and media started pounding relentlessly on CSCO by Sept of 2000, and primarily negative coverage continued for months. I ignored that, and that was a mistake. I certainly will never make that mistake again. But that is stock-specific, and I don't see how that warns us of a technology-wide massacre. On the other hand, if you have a substantial amount invested, trading is extremely costly taxwise because you pay roughly 50% (federal and state) tax on every dollar of profit-- that amount of tax loss covers you for some pretty big volatility. Even 20-27% (federal and state) tax on one year holds, tho a lot less, can still be extremely costly if large amounts are involved. That is part of what keeps people in QCOMs and NTAPs through a huge run-up and decline. Cashing in on the run up simply costs too much. The "trouble" with last year was simply that the downside volatility continued over a nine-month or more period, and stocks declined over a relatively long period of time. In previous years, the decline periods were very much shorter before the upward trend resumed. My problem is that I don't see any way of being sure with the first decline whether it will be a long or short period of decline. In a year of short declines, "trading" is a strategy very apt to boomerang, and an investor will miss out on more on the upside than they preserved with early selling. Last year, I believe most people were faked out because the declines contined for much longer than expected. As I recall, most prognosticators were still predicting an end of year rally last fall, but instead the market entered a still-worse decline in October, and the election soap opera smothered the last flicker of confidence. Like many others, I was caught flat-footed by events in November and December, even though I had been extremely uneasy about what the effects of the excessive Fed tightening would be. But as you say, there is a lot for investors to digest in extracting the lessons of last year, and it will take time to do so. Thank you for your thoughtful reply. Regards