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In the past few weeks, the stock market has been shanghaied, partly by rumors of a slowdown in the Chinese economy. But it's hard enough for a New York resident to figure out what's happening in Chicago, much less Shenzhen, so it's fair to wonder if following overseas news helps investors' quest to understand their world.

Indeed, it may make more sense to shut out the world entirely and focus strictly on your own little corner of the globe. For people who live in medium and large metropolitan areas, there are more than enough companies and industries within 100 miles to help them determine how the local economy is doing. And there are probably enough public companies in that radius to create a reasonably diversified portfolio out of what they discover.

I'll give the idea of local investing a whirl by focusing today on the economy and stocks of my home state of Washington. If that sounds parochial to worldly readers in Boston and Miami, it shouldn't.

Within range of a single motorcycle gas tank, I could ride to the headquarters or major plants of the world's largest aircraft company,


(BA) - Get Boeing Company Report

; the world's largest technology company,


(MSFT) - Get Microsoft Corporation Report

; the largest Internet retailer,

(AMZN) - Get, Inc. Report

; the world's largest coffee-shop chain,


(SBUX) - Get Starbucks Corporation Report

; one of the world's largest forest-products companies,

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(WY) - Get Weyerhaeuser Company Report

; two big retail chains,


(COST) - Get Costco Wholesale Corporation Report



(JWN) - Get Nordstrom, Inc. Report

; one of the world's largest truck makers,


(PCAR) - Get PACCAR Inc Report

; and one of the largest financial services companies,

Washington Mutual

(WM) - Get Waste Management, Inc. Report


Hometown bragging? Maybe a little. Yet virtually any other urbanite could assemble a similar list. Here's what I learned about my little slice of the world economy in the past week.

Sunny Days in the Rainy Northwest

First of all, the obvious. More people have jobs these days, and they are spending more money. On Sunday afternoon, I visited Safeco Field to watch the Mariners blow a 6-0 lead against the Yankees in the company of 46,589 of my closest friends. That was a record stadium crowd, and when you consider how much it costs to go to a baseball game these days -- $138 for four good seats, and at least $60 more for lunch, beer, lemonade and snow cones -- you realize that an amazing number of people are capable of blowing a lot of money to see a last-place team.

This is quite a change from two years ago. If you divide the state of Washington into two parts, with one being the greater Seattle area and the other being everything else, you'll have an equal number of workers in each. The Seattle portion experienced a more severe recession than the rest of the state and nation in the first couple of years of the decade, losing 3% of its jobs -- about 60,000 out of 1.6 million.

In the rest of the state at that time, regional economist Kriss Sjoblom says, there was no recession -- just a "pause" in growth. Now, though, job growth is creating new life on both sides of the Cascades. In greater Seattle, a new Boeing initiative to build the 7E7 locally has fired up the manufacturing base. In the hinterlands, wheat and fruit farmers have emerged from an agricultural depression to become flush with cash on booming trade with China.

Times are so good that even MBAs are feeling the love again. Ed Rice, a professor of economics and business at the University of Washington, says the overall U.S. economy has rebounded from recession faster than the Northwest, but the area is catching up quickly. He says more graduates of UW's business school are getting jobs in 2004 than in the past four years, and those jobs are also at higher levels and paying better. Microsoft has been hiring through the whole period, as has Amazon. But now the area's biotech industry is coming on strong, leasing tens of thousands of square feet of office and laboratory space in brand-new buildings you can see under construction on a ride through the city's suddenly glittering South Lake Union district.

The New Northwest Labor Force

Sjoblom, a vice president at the Washington Research Council, said that the area's workers will continue their transition from making things to servicing and researching things in the next five to 10 years.

Biotech is a perfect example. The archetype of the area's old biotech industry was Immunex (maker of the blockbuster arthritis drug Enbrel), which merged with


(AMGN) - Get Amgen Inc. Report

. Now most area biotech firms see themselves as simply developers of drugs that will be licensed to major pharmaceutical manufacturers; sales and marketing teams will be thin. This means you can expect fewer workers per company, but possibly a great number of companies as the best brains from universities find start-up costs a lot lower.

That doesn't mean manufacturing is completely dead. The new Boeing 7E7 plant is tentatively slated to add just 1,200 jobs to the region, but there are persistent rumors that the company's Japanese subcontractors may elect to transport big chunks of their wing sections here for final assembly before being shipped to Everett for bolting to the plane -- adding hundreds, and perhaps thousands, of additional jobs.

Another wild card in the region's growth is the rise and fall of wireless communications. The national cellular revolution practically started in the Seattle area with McCaw Cellular, which was sold to


in 1994 and transformed into

AT&T Wireless

. Earlier this year, the company was in turn sold to Cingular Wireless, the joint venture of



SBC Communications

-- a merger that's expected to cost the region 4,000 jobs.

Or will it? Sjoblom said regional economists debate whether jobs move to people or people move to jobs. In this case, he said, other wireless companies are talking about moving operations to Seattle to take advantage of the region's expertise in the field. In addition, fired workers with something to prove are often the most successful creators and builders of clever new companies.

New Opportunities

Area industrial giants Weyerhaeuser and Paccar will add scant jobs as their businesses thrive, as productivity improvements help both loggers and truck assemblers do more with fewer bodies. There are still 5,000 loggers in the state of Washington, but the lumber business is expected to level off as the homebuilding boom slows in sync with higher interest rates.

Joseph M. Phillips, dean of the Albers School of Business and Economics at Seattle University, said his graduates are finding their greatest successes in the accounting departments of companies like these, as executives find they need more help meeting the reporting requirements of the Sarbanes-Oxley Act of 2002.

If you drive due west from Phillips' school, you'll crest a hill where you can see the construction of a new 42-story headquarters for local banking titan Washington Mutual. Due to open in 2006, the tower will consolidate many of the company's far-flung operations, just as the bank itself has consolidated many smaller savings and loans around the county. The company did extremely well during the recession but has suffered in recent months along with the rest of the homebuilding complex amid fears that interest rate hikes will kill its business.

What hasn't died, however, is the entrepreneurial drive of many of the executives of banks and savings and loans that Washington Mutual and Bank of America have swallowed. They have gone on to run successful smaller concerns such as

Cascade Financial

( CASB) and

First Mutual Bancshares

( FMSB) -- two impressive engines of regional growth themselves through small-business and real-estate loans.

In short, the Seattle area is doing just what you would expect from a capitalist textbook: It has emerged from hard times with renewed vigor as investments are applied to areas where the highest growth in returns could be expected. The table below lists the 10 Washington companies that should perform well the next six months. I'll watch them and report back later in the year.

Jon D. Markman is publisher of

StockTactics Advisor, an independent weekly investment newsletter, as well as senior strategist and portfolio manager at Pinnacle Investment Advisors. While he cannot provide personalized investment advice or recommendations, he welcomes column critiques and comments at At the time of publication, Markman had a position in the following securities mentioned in this column: Microsoft and Starbucks.