Tech hands are too sticky. When I panned Dell (DELL:Nasdaq - news - commentary) earlier this month, I was inundated with passionate emails from Dell supporters. (Incidentally, the stock has fallen more than 15% since that column appeared.) Even though tech is yesterday's story, it will take a full market cycle to work off the emotional excess.

There's a return to investing. Speculators learned in the last cycle that identifying a ramp in demand for fiber optics, cell phones or Internet software does not, by itself, translate into investment success. We are returning to an era of investing, in which market players are learning to prefer boring, undervalued companies like Office Depot (ODP:NYSE - news - commentary) over exciting, but richly valued companies like Oracle (ORCL:Nasdaq - news - commentary).

Doom-and-gloomers are emerging. In every tough market that I have personally observed -- 1987, 1990, 1994, 1998 and 2000-2001 -- the doom-and-gloomers come out in spades. I see no evidence that housing is about to fall apart, that the U.S. economy is going the way of Japan or that inflation is set to zoom.

Old stuff is still too popular. Market-weighted index funds are too popular, as are mutual funds in general. Prospects for big-cap stocks are unexciting at best, but they are still widely hailed by many in the crowd as "safe" investments.

A simple formula is all that's needed. This cycle continues to be very different from the last cycle. It's about undervalued, nontech, small- and mid-cap "real" companies. It's not complicated. Sometimes the best investing is the simplest investing.

Update on Year-End Picks

Here's my new rating system applied to my year-end recommendations.

• Buy: Great value at today's price

• Sell: There are better alternatives for your capital. (It doesn't mean this stock is a short!)

• Neutral: I'm not sure!

The purpose is to give you my opinion based on today's prices. In my next column, I'll rate my current-year stock picks.