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With the


bleeding, we'd like to use a Life Line.

After rocketing to an 85.6% gain last year, the tech-laden

Nasdaq Composite remains in bear-market territory. The Comp has suffered a 20% loss since Jan. 1 and a 35.8% loss since its March 10 peak. It was off as much as 137 points today before a halfhearted recovery left it standing at 3168.17, off 72.37.

With the bull run's leader getting thumped, we asked a few tech watchers and investors to survey the damage. Everyone points to a different culprit and sees a different road ahead.

Where are we and how did we get here?

Pat Dorsey, director of stock analysis at Morningstar:

I think a lot of this downturn came up because we had too much euphoria in late 1999 and early 2000. Now we're paying the price. Stocks just can't keep selling at hundreds of times their sales. The Nasdaq is still up pretty well over the last 12 months (11.1%). Of course, that doesn't help you if you bought at Nasdaq 5000, but people need to reduce their expectations going forward a bit.

Jeff Van Harte, portfolio manager of the (TEQUX) Transamerica Premier Equity fund:

If you look at what's performed this year it's been utilities, financial services, defense, aerospace, health care and energy. I don't like any of those areas

laughs and I usually don't invest there. The upshot is that the market is telling us we're in for a hard landing and a serious recession. Maybe nobody says it on


, but that's what I'm seeing in the market. That said, I don't think that's true. I think we're in for a soft landing. A lot of this is due to tax-loss selling. I'm not surprised we're having trouble.

Mark Sunderhuse, portfolio manager of the (BENGX) Berger New Generation fund:

It was too good for too long

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for tech stocks. People had to leave tech, but they will come back. There will be sizable capital spending on technology and telecommunications, so they have to come back. We got here through what Alan Greenspan called overexuberance, so this

downturn is healthy. It might not feel healthy.

Nobody wanted to acknowledge that it was going to be difficult when we transitioned from a technology focus to a valuation focus. Stocks trading at egregious multiples were going to come back down, but nobody knew where to go. There was a herd mentality moving out of these this year.

The reason we got here so fast is that we gave every company the benefit of the doubt, and now we're going the other way. You either produce or you get shot.

Is this a short-term event that will dissipate once a big company like Cisco posts bang-up results, or is this a broader event with tech-stock valuations being reined in?

Van Harte:

I think tech-stock valuations are being reined in, but I don't think we should get too negative. There are still a lot of great things going on in the tech world. Let's face it, tech is here to stay

laughs. It's a big part of our economy. But clearly economic growth has slowed from 5% to 2.5% and that's what the market is adjusting to.

But we also can't get too positive about what's up. The whole optical area is a disaster waiting to happen. I don't like anything that's up this year. Usually I like something that's up, but this year we've tried to be a bit more careful about where we're putting our money. We're going into the cable TV sector because most of these stocks are trading at two-thirds of their private market value. I think that's a great area to be in because you're paying less for great businesses.

Robert Loest, portfolio manager of the (IPSMX) IPS Millennium fund:

I think it's a short-term event, largely triggered by tax-loss selling by institutional investors. A lot of money managers are trying to cram in a lot of selling

to reduce capital gains distributions and then buy these stocks before the end of the year to have these stocks on the books and look good

what is known as window dressing. It's a combination of tax-loss selling and window dressing.

I think this is just a normal correction in stocks without a recession. My definition of a bear market is more than 5% lasting more than three months. Since 1950, using data from

Ibboston Associates

, these longer corrections have lasted a little over eight months, and we're about seven months into this.

Worst-case scenario, we're at least halfway through. Better-case scenario, yes, we're in a bear market but we're close to the end of it.

What sectors and companies do you think are immune or somewhat bulletproof to this selling?


I don't think anything at this point is bulletproof. Valuations are pretty high across the board. One opportunity right now is to look at companies like


(MSFT) - Get Microsoft Corporation (MSFT) Report

that are reasonably valued and will trade on nonmarket events. Microsoft will trade on legal developments and

the acceptance of new software package Windows 2000, period. A similar company is

America Online


. It's going to trade on whether or not this merger


Time Warner


is approved, which I think will happen. The combined entity is pretty strong.


Where do you go? Even before this people knew there had to be a fallout, particularly involving the dot-coms. People tried to migrate to higher-quality names, but nobody who's a growth investor -- even if they're hiding in energy or financials -- is getting the revenue growth they need outside of tech.

At the same time we have a change from the four horseman:


(CSCO) - Get Cisco Systems, Inc. Report



(DELL) - Get Dell Technologies Inc Class C Report



(INTC) - Get Intel Corporation (INTC) Report



. Those older leaders will fade if they don't become relevant to the current market.

I think you look at a company like


. It's a company that has the operating system for wireless Web access. When you look at a model and the adoption rate of wireless hand-held devices, you see they have good prospects.

I like wireless equipment companies like

Triton Network Systems


-- people that actually make all the equipment that hangs on towers and help us communicate with each other. I think capital spending in the wireless-equipment area will be high and that might help it stay strong.

Van Harte:

We look to companies with big customer bases like


(CVS) - Get CVS Health Corporation Report




. We love those and own them. I really like those businesses. We like them in both bull and bear markets and we really like them now for their stability.

I like

credit card processor

First Data

(FDC) - Get First Data Corporation Class A Report

, too. Their business is just growing like a weed as people move away from checks. It's a great, steady business.

What's the biggest mistake an investor can make in this type of market?


The worst thing you can do is run away from the market at a low. We're not seeing people buying yet, but we don't have much further to fall. It's a mistake to not allocate your money in and out of tech to beaten-down companies that are solid. The other is getting sucked into names that deserve to be cheap.

I think some stocks will trade at half what they're selling at now in areas like Internet software and the lower end of networking-equipment stocks. Also, I wouldn't be surprised by more shakeout in the information technology consulting space, too.


The biggest mistake to make is to continue to think that tech is the market. It was a mistake before and it's a mistake now. The past few months have shown people just what being undiversified can do. People who diversified into drug stocks and financial stocks that were cheap are pretty happy right now. You just can't put all your eggs in one basket, no matter how good it looks.


Lack of patience. The reason stock investors get such high returns is that they don't panic and sell in tough times. The worst mistake you can make is to get stampeded out of stocks. This is what stocks do for a living. Periods like this are why investors get such high returns. This is when everybody ought to be buying.

Can these sectors maintain momentum if tech, the driver of the bull run, continues to swoon?


No, I don't think so. I think we're coming back to more traditional 8% and 10% returns. There's no way we could continue at that above-average pace. That said, I think tech has to lead. What other sector offers absolute growth at those levels? Where else can businesses go to improve their margins? It's not with cyclicals or health care.

What are you doing today?


I'm not doing much; I haven't even been looking at the market, partly because our cable is out. I saw the market going down, but I don't think we'll go much further down. If we do, I'll have to rethink this to see if there's something out there I haven't considered.

Van Harte:

Nothing. We're not doing anything. We're fully invested and we're not doing much. Did a little bottom-fishing yesterday. Bought some Intel, Microsoft and

Applied Materials

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. They're all down a lot.