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. Inktomi ( INKT) traded at a high of $232 in March 2000; recently, shares sold for $6. Affymetrix ( AFFX) went for $160 then; shares sell for $19 now. JDS Uniphase ( JDSU), $147 then, $10 a share now. Level 3 Communications ( LVLT), $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 every 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 Intel ( INTC) 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.