To: H James Morris who wrote (141828 ) 4/25/2002 5:06:45 PM From: Victor Lazlo Read Replies (3) | Respond to of 164684 Vanity Book Predicting 20-Year Bear Market Hits Big Time WASHINGTON -(Dow Jones)- When Michael Alexander wrote a book predicting the start of a decades-long bear market in 2000, the premise was laughable. Today, Alexander's "Stock Cycles: Why Stocks Won't Beat Money Markets Over the Next 20 Years" is on the shelves of Barnes & Noble Inc. (BKS) bookstores throughout the U.S., even though Alexander had to pay to publish it himself. Such self-published "vanity" books rarely make it to major retail booksellers, but a combination of online sales, his publisher's connections and the arrival of the bear market have helped to make Alexander's work more marketable. Alexander's thesis is that the stock market's bear and bull cycles can be predicted using history as a guide, and that the U.S. was due for another bear some time in 2000. From now until about 2020, investors can forget about leaving their retirement money in an index fund and expecting it to outperform other investments, such as money market funds, claims Alexander. The 43-year-old Kalamazoo, Mich., resident seemed a little unhinged in 1999, when he became so convinced that the market was about to sink that he moved all his 401k assets out of stock funds. He missed out on one of the biggest boom years as stocks soared. In early 2000, he began writing "Stock Cycles," finishing in late spring of that year. The market was still in record territory. Besides the fact that his predictions weren't coming true, Alexander didn't have any kind of Wall Street name recognition to bolster his chance of publishing the book. A chemical engineer who works at Pharmacia Corp. (PHA), his main investing vehicle is the mutual funds in his 401(k) retirement plan. A jittery speaker who ends nearly every thought with an impatient "O.K.?", Alexander's other self-published book credit is the decidedly wonky, "The Kondratiev Cycle: A Generational Interpretation." When Alexander couldn't find a publisher for his work, he paid to have it printed by iUniverse, a Campbell, Calif., vanity press for individuals and companies. By the time it came out, in November 2000, the market was definitely bearish, in line with his thesis. The book started selling online through Amazon.com Inc. (AMZN) and other Web sites. iUniverse is 49% owned by Barnes & Noble, and the two companies have a cooperative arrangement through which iUniverse submits its top titles to the bookseller for consideration for shelf space. Alexander was one of six iUniverse authors selected by Barnes & Noble to begin selling in stores last month. The book is now ranked 29,799 in sales on bookseller's Web site, a position that is "actually not bad" considering the site sells more than a million titles, and " amazing" for a self-published book, said Barnes & Noble spokeswoman Carolyn Brown. "It could be the timing," said Brown of Alexander's sales. "It's a newsworthy book." Even though there are many online sales outlets for self-published books, placement in a retail store can really make a difference, said Steve Dunbar, vice president for author publishing at iUniverse. In Alexander's case, his book and five other iUniverse titles are being showcased in special in-store promotions. Alexander said that since the book began selling, he's received a lot of positive e-mail about his theory. He said even though he's convinced investors are in for 20 years of mediocre stock market returns, he won't rule out another short-term rally at some point. "I don't think the mania is dead yet," he said.