Someday, when

Oliver Stone

makes his great sequel,

Wall Street.com

, surely the seminal scene will be of a day trader, sitting at a computer in the corner of his or her apartment.

Charlie Sheen

, with a three-day-old beard and a ratty bathrobe... no, it'll be

Minnie Driver

, in some slinky

Victoria's Secret

number...she'll be logged on to

E*Trade

(EGRP)

, slapping her keyboard frantically and artfully, like some mad

Thelonious Monk

-type genius. As the music builds to a crescendo, and the shot gets tighter and tighter, she'll suddenly turn to the camera. "Greed," she will say, with a self-satisfied smirk, "is good."

Surely that's the image of this market -- but the problem is that image is wrong. If you believed all you read in the popular press, Internet stocks are fueled by such retail trading. And indeed, it makes good copy, whether the bent is "Moronic Amateurs Run Up Specious Companies" or "Power to The People." But evidence is starting to show that mutual funds, big and small, are the ones actually driving Net stocks these last few weeks and months.

One surety of the mutual fund business is that yesterday's winners are rewarded with today's investments. And last year, no one was winning like the Net funds. As the funds trounced the averages -- the

Munder NetNet

fund, for example, posted a 98% return last year -- the fund managers were rewarded with hundreds of millions in new cash. Ryan Jacob's successful

Internet Fund

started in 1997 with $120,000. In January 1999, after his fund recorded a 196% gain for '98, it had $60 million. By last month, the 29-year-old manager had more than $200 million under management. These guys have a mandate to put their money in Internet, so the millions flow in, and those millions flow out to Net stocks.

"It's easy to lay it off on the individual investors," says Jacob. "In terms of number of trades, sure, retail rules. But in terms of sheer volume, there's a lot of institutional money at play here."

What the market has seen in the last five weeks is these fund managers pouring their money in. Take the tiny

Monument Internet Fund

(please). Dave Kugler, Monument fund group president, says the fund recently had as much as 18% in cash but cut that down to 7% as of last week. "We take in pretty good money every day, even though we're the smallest of the Net funds," Kugler says, adding, "I try to put it to work."

And nobody, investors or fund managers, seems ready to cash out. "I don't have a problem with redemptions," Kugler says, "because we don't have any redemptions."

The massive Munder NetNet fund has grown from $125 million last November to $1.05 billion last week. And Jacob's Internet Fund has been buying Internet stocks so furiously that he's gone from about 30% cash in January to 12% last week, amid exponential growth.

And this may be just be the beginning, 'cause the big boys are coming. "Among the big funds, we've seen a definite shift in attitude," says Jacob. "Most institutional investors saw the Internet as a curiosity, and if they wanted to play in this sector they bought

AOL

(AOL)

. Now they're starting to do some research in these companies, taking a hard look at some as investments. Attitudes have changed. I mean, you read all these stories about how day traders were driving up Internet stocks in January, and then this month, low and behold, you see

Fidelity

disclose that it owns 8% of

Lycos

(LCOS)

. Those weren't day traders buying all that stock."

At the recent

Hambrecht & Quist planet.wall.street

conference, attendance went beyond the die-hard Net devotees. The big funds now mingled with the upstart Internet fund investors.

"I think that supply and demand will drive Internet stocks more than valuation," says Arden Armstrong, manager of the

MAS Mid-Cap Growth

fund. "In these next few months, I think that will be the driver."

Indeed, with Net stocks in these last few weeks, there have been, quite simply, more buyers than sellers -- supply has been outstripped by rapacious demand. "Two years ago the people at our conference were the early adopters -- geeks if you will," says analyst Danny Rimer, who heads H&Q's Internet research group. "But this year, we're crossing over into the early mainstream adopters of Net stocks. Really, the adoption of Internet stocks into mainstream portfolios is much like the adoption of the Internet into mainstream society."

As originally published, this story contained an error. Please see

Corrections and Clarifications.