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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: Amots who wrote (14361)	2/21/1998 11:42:00 AM
From: Bonnie Bear	Respond to of 18056

yup, I think this article is perfectly on the mark. I take heart in the amount of money flowing into junk like Dell and AOL, the really careful investor is not likely to get hit first in a downfall, the junk stocks will absorb a lot of the surplus money needing a home. I am really disturbed to find most "value" mutual funds carry both of these, - IBD has the list of the most widely held value stocks, it's scary. One thing I'm finding out of the mania is that the better managers are easier to find. As bearish as I am on the market I can find some fund managers who are (1) truly gifted (2) care intently about return OF money as return ON money (3) warn their investors and encourage them to look at bonds, or buy bonds and hedges in their portfolios. I know that AOL and Dell and Micron would be going into my retirement money right now if I didn't care. Year after year my company 401K vastly underperformed the market, the bond fund lost money, the stock fund got less return than cash. It went screaming up this year but showed a huge hit fourth quarter. Any money I have long right now is either in brokerage stocks or with funds managed by people who were managing money in 1973, have a huge chunk of their own money in the fund, and who religiously follow rules about book value, price-to-book and dividends as well as growth prospects. I've found a few: heartland funds, royce closed-end funds, bancroft and ellsworth closed-end convertible funds, muhlenkamp fund (this guy is a first-class bargain hunter) FBR funds (higher risk) Sadly most funds are run by people who don't care because it's not their money. The Street has a vested interest in keeping this mania going indefinitely , if possible. One thing I have noticed is that the real stocks to buy are one hit excessively hard in profit warning, they are immediately picked up again and later show up as favorites. Aetna, Greentree financial and oxford health certainly fit this category. Would I want Aetna in my retirement portfolio instead of AOL? you bet. And its' close to book value even after a runup. So a good stock-picker with an appreciation of the game can go on in this market making a profit on good stocks as long as the big guys can keep the flood of money coming in and interest rates stay down.