If you look out over the technology sector right now, the ground is littered with the battered and burning hulks of the stock rockets of 2000.



traded at a high of $232 in March 2000; recently, shares sold for $6.



went for $160 then; shares sell for $19 now.

JDS Uniphase


, $147 then, $10 a share now.

Level 3 Communications


, $130 then, $4 now.

Way back then, many of us thought companies like these would be the dominant players in the New Economy. That hasn't worked out exactly as planned -- to put it mildly. Many of these companies turned out to be built on deeply flawed business plans. Some never really had the innovative edge needed to dislodge established competitors. Quite a few wound up pursuing markets that now don't look likely to materialize at all.

But while we bid the prices of all these stocks up to levels that couldn't be sustained or justified, I don't think we were wrong about the future prospects of


company that soared in 2000. Some are indeed built around savvy business plans and truly disruptive technology, and they look set to dominate huge future markets. I think it's useful at this point in the stock market cycle to remember that


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almost went out of business before it decided to abandon the memory-chip market and set out to conquer the world of PC microprocessors. Some of the companies that now look like worthless pieces of coal will indeed turn out to be the diamonds of the next bull market.

All you have to do is figure out which of the momentum darlings of 1999 and early 2000 are potential Intels that deserve a central place in any long-term portfolio -- and which ones are never coming back.

Most of the time, investors start out to separate the diamonds from the dogs by trying to figure out what makes a stock a potentially big future winner. I think it's better to begin at the other end of the spectrum and concentrate initially on what qualities make a stock into trash.

Accentuating the negative is a good way to avoid falling in love with every broken-down stock you study: If you have the reasons not to buy fresh in your mind, you're more likely to do an honest job of evaluating potential winners when you come to them.

Finding the Dogs

Begin the process of separating the diamonds from the dogs by looking at what characteristics make a stock a "woofer." I'm going to use the 50 stocks in the Future 50 long-term portfolio as my universe and give you three major qualities -- and an example or two -- that I think define a stock that not only smells like trash at the moment but that is likely to remain rubbish in the long run, too.

After I've given you my three rules of rubbish, I'm going to ask your help in deciding which 10 stocks to boot from the Future 50. Readers helped me put together this list by nominating stocks they thought were the stars of the future, so I think it's only fair that they help boot the stars that have turned into clunkers. Vote on which stocks to boot by posting in the "10 to dump" thread on the "Market Watch with Jim Jubak"

message board on



In my next column, I'll flip-flop this process and give my three top reasons for thinking the stock that crashed and burned yesterday might be the must-own of tomorrow. And I'll ask for your votes on which 10 stocks to


to the Future 50 portfolio. I'll post the results in the form of a revised Future 50 portfolio along with my July 31 column.

Price isn't any help in deciding if a stock is a dog or not -- after all, in a bear market like the one that ruled 2000 and then roared into 2001, good stocks got crushed along with bad ones. And precisely what we're looking to buy is a


stock that has lost 80% or 90% of its value.

Earnings and revenue growth -- or the lack thereof, actually -- aren't any more helpful. The entire technology sector has fallen into a profound growth slump. Companies with extraordinarily solid future prospects for the long term -- even big-chip tech stocks like


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(CSCO) - Get Cisco Systems, Inc. Report

-- managed to stave off a collapse in sales longer than weaker peers. But they, too, finally succumbed to the widespread crunch.

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Former reputation isn't a good guide, either, because so many once-sterling reputations, either for entire companies or for specific CEOs, have been tarnished or worse during this crunch. Average Joe or Jane CEOs and walk-on-water CEOs alike have stumbled badly during the last year and a half. And even companies that have never shown the slightest sign of strain in prior tough times have developed stress fractures in this crisis.

Trash-Heap Indicators

OK, so what are my three rules of rubbish?

1. Look for business plans that seemed to be a blueprint for market dominance in March 2000, but that now look as if they won't deliver more than middle-of-the-pack results.

Even at the height of the bubble in 1999, analysts and investors who didn't like shares of


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pointed out that its business plan didn't work. The hold-on-inventory system of logistics that worked for Amazon in the book and music business was founded on the peculiar structure of those industries, where publishers were traditionally willing to hold inventory for retailers. Margins would collapse, the critics said, when Amazon tried to move into areas of retailing where the seller had to hold the inventory and pay the costs of filling orders. Those objections fell on deaf ears while the stock was soaring, but the pricking of the bubble showed that the critics were right about the flaws in Amazon's business plan.

Amazon isn't alone. Without the giddy price appreciation of 1999 to lend an air of inevitability to a company's strategic vision, all of us are much more able to see the problems in a company's business plan.



, for example, is now struggling with a very basic business plan problem -- how to turn all the eyeballs that use its site into revenue. The company has been extremely successful in building traffic for its Internet services -- it ranks by many measures among the top three in the number of people who use its service. But advertising payments, the company's major method for translating traffic into dollars, don't wring enough revenue out of that traffic. It remains to be seen whether Yahoo! can fix that problem in its business plan without significantly reducing the number of Internet surfers who come to its sites.

Other companies facing business plan problems include Level 3 and

At Home

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2. Look for companies that have so badly managed their business that they've actually destroyed the key assets that made them worth owning.



is the poster child for this problem -- the company ran itself so deeply into a hole in an effort to grow sales at all costs in 1999 and early 2000 that it now has to sell off its best assets to satisfy its creditors.

But Lucent isn't the only company guilty of bad management on this scale.



spent so much on building out its Ricochet service that it didn't have the financial resources to recover when the flow of subscribers turned out to be a dribble. The company is now in bankruptcy reorganization.



fits this description, too. The company had the lead in the fast-growing business of data hosting -- and I thought that the company's ability to build its business, data center by data center, would enable Exodus to avoid getting financially overextended. But even Exodus' solid track record of quickly taking individual centers to break-even wasn't enough protection against overexpansion. The company may still wind up at the head of the hosting class but only after current equity investors see even their meager remaining holdings wiped out in a bankruptcy reorganization. I'd put

Loral Space & Communications

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in this group, too.

3. Look for companies whose technology no longer seems the inevitable victor.

Everybody is claiming that lower revenues are the result of the downturn in general business conditions. But underneath that cover, some companies are definitely losing market share. It won't be readily apparent until the economy turns up -- at that point, market-share gains will turn into speedy and large revenue gains for leaders, and market-share losses will leave other companies treading water as if the economic downturn hadn't ended.

So it's important to get a handle on this now -- before you start loading up on a stock that will be dead money in the future thanks to market-share losses. I'll flag three stocks in the Future 50 that might be facing this problem: Affymetrix, which is facing a challenge from alternative gene chip technologies;


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, which pooh-poohs new competitors; and



, which must deal with a far-more unsettled wireless market than seemed likely even a year ago.

10 to Drop Now

You can find my votes for 10 to drop within these three rules, but let me make my votes explicit: Affymetrix, At Home, Exodus, Level 3, Loral Space, Lucent, Metricom, Openwave, Visx and Yahoo!.

Now I'd like to hear from you. Vote early and often -- I tabulate how many votes a particular stock gets and how well-thought out the reasons are behind that position. So a stock that gets just one incredibly well-reasoned vote can still make the cut. (I do the tabulation, of course, but I try not to give my votes overwhelming credit for brilliant logic, so I don't expect that the final list will be a copy of mine.)

And to avoid influencing the exercise any more than I already have, I'm temporarily taking all the new money "best buy" ratings off the Future 50 portfolio.

So vote now in the "10 to dump" thread on the "Market Watch with Jim Jubak"

message board. May the worst dogs win.

At the time of publication, Jim Jubak did not own or control shares in any of the equities mentioned in this column.