"My personal investment strategy lies with . . . companies that provide the infrastructure for the Internet and information processing, as opposed to the dot-coms," she confided. "I don't invest in any of the dot-coms. They scare me."
"Stocks like Cisco, Oracle and Sun Microsystems are really solid companies," Brainin-Martin said. "I know people consider them to be inflated, but they [have] . . . good earnings and good potential" for the long run.
She also owns JDS Uniphase, Applied Materials, Qualcomm, PMC Sierra, Covad, Compaq, America Online, Lucent and MCI WorldCom, among others.
"I study these companies on a daily basis through my work and watch them evolve," she added. "I am not a gambler."
Although she's committed to tech issues, she acknowledged that she might selectively "lighten" her holdings to lock in profits on a few of her highfliers.
Hanging On to the Value Fund
Charles Jones, 61, of Calabasas describes himself as a buy-and-hold investor. Most of the time.
"Every time I have switched from one strategy to another, the one I got rid of came back," he complained. "Jumping around is usually a fool's game."
Still, he dumped his fixed-income and real estate funds two years ago and jumped on the tech bandwagon. "I figured that if I didn't get into technology, I was going to miss the boat," he said.
His timing was great. The technology fund he bought has posted about a 70% gain in the last year and a half.
He also was a net winner when he switched out of a fund that invested in financial and consumer goods stocks and into one that concentrated on Nasdaq 100 stocks, primarily technology leaders.
Still, he didn't shift everything. He's got stock in utility Edison International, to which he remains committed. And he holds on to a large-cap value fund despite lackluster performance in recent years.
"I don't want to put everything into technology,' he said. "The value fund I have isn't doing anything now, but I figure it's going to come back eventually."
Spinning Off an All-Tech Portfolio
Ingelis Jensen's investment club was worried about the increasing weight tech stocks held in its portfolio. At the same time, members didn't want to give up the spectacular gains that have more than doubled their portfolio's value in the last year, to $51,000.
The club solved the tech versus diversification issue in much the same way some companies have: by creating a spinoff.
Professional Women's Investment Club, whose 15 members hail largely from the San Fernando Valley, last year created a second club with an all-tech portfolio. The two clubs are comprised of many of the same members; all meet to discuss stock picks for the regular portfolio before turning their attention to the all-tech version.
Separating the two has allowed the club to take a flier on issues deemed too risky for its general portfolio. "Technology stocks are so volatile, you never know what's going to happen," Jensen noted.
The spinoff was created in July, and already its members' $25-a-month dues have turned into a $12,000 portfolio. The holdings include telecommunications software company Vertel, Lucent Technologies, data storage company EMC and Internet retailer Amazon.com.
Both the tech and the regular portfolio hold MiniMed, a firm that makes microinfusion systems for diabetics.
Even with the spinoff, the club's regular portfolio is still more than 50% invested in tech, largely thanks to spectacular gains by Oracle and Intel. The club has been reluctant to sell those winners to diversify, although lately it has been looking harder at retail stocks, Jensen said. Its most recent purchase: Bed Bath & Beyond.
The surge in tech stocks has had another effect: It has helped curb the club's tendency to hold on to losers too long, Jensen said.
"We've changed from holding them forever to holding them for a reasonable period and then selling" if the stocks underperform for two to three years, Jensen said.
Ignoring the Rule of Diversification
The University Park Investment Club has been ignoring the idea of diversification for months now--with excellent results.
The 24-member club's portfolio has blossomed from $67,000 to more than $100,000 in seven months, thanks largely to its tech stocks, which make up 64% of the portfolio's assets.
In fact, the club has 32% of its money in a single tech stock, database software giant Oracle. The club paid about $4.40 each (split-adjusted) for their Oracle shares, which now are worth about $78 a share. Other winners include Cisco and Applied Materials.
The club isn't just watching its tech stake grow with the market; members have been actively winnowing out old-economy stocks.
Members recently voted to dump market laggards Carnival, a cruise line company, and mortgage lender Federal Home Loan Mortgage Corp. (Freddie Mac) to buy cell phone maker Nokia--"and we've done brilliantly" with those decisions, said club leader Leonard Wines, 72.
