Please respond to The Motley Fool 
_________________________________________________________________

                   I N V E S T I N G  B A S I C S
                      Tuesday, April 24, 2001

benjamin.rogers@enron.com
_________________________________________________________________


SPONSORED BY: Ameritrade
Open an Ameritrade
 account now and get commission-free
trades for 1 month. Learn more at ameritrade.com
http://www.lnksrv.com/m.asp?i=397079


IN THIS ISSUE:

Q&A: What exactly are "tech stocks"?
Q&A: Are Insider Stock Sales a Red Flag?
LESSON: Confronting Contradictory Advice


YOUR QUESTIONS ANSWERED

-- Q. What exactly are "tech stocks" -- computer makers?

-- A. Great question. The term often refers to computer
companies and software makers. But these days, it can be hard to
think of companies that don't employ a fair amount of
technology.

Think of pharmaceutical firms, for instance. Drug chemistry and
drug delivery processes involve technology. Golf club
manufacturers apply technology to their new product development.
Pretty much any airplane-related enterprise uses technology
-- from building jets to booking flights. Likewise, Federal
Express and other delivery specialists rely heavily on
technology. Of course, some companies do so more than others.
Sun Microsystems, for example, is much more of a technology
company than Hershey.

When we hear that "tech stocks were up today," we have to wonder
what exactly is being said. A good way to think about the term
might be to use it for companies that draw most of their revenue
from directly using or creating technology.

-- Q. How bad a sign is it if a company's insiders are selling
shares?

-- A. It's not necessarily bad at all. Many executives these
days are compensated significantly with stock options. They may
simply be generating cash to buy a house or put a kid through
college. We wouldn't fret too much unless an awful lot of a
company's top brass were selling shares -- and selling
significant percentages of their holdings. Even that could be a
coincidence, but it might warrant a little scrutiny on your
part.


P.S. GOT AN INVESTING QUESTION FOR US?
Post it on our Ask a Foolish Question message board.
http://www.fool.com/m.asp?i=397080
_________________________________________________________________

LESSON: CONFRONTING CONTRADICTORY ADVICE

Learning to invest successfully isn't a straightforward
endeavor. You'll frequently run across seemingly contradictory
advice, which will leave you scratching your head. The solution
to this confusion is to understand that investing is both 1.
simple and 2. complex.

At the beginning, it's simple. Your first steps should be to get
out of debt, read broadly on investing, and perhaps invest your
initial dollars in an index fund. But once you begin looking
into picking individual stocks on your own, you may run into
some contradictions. For example:

1. Don't waste your time trying to time the market. Always
   remain invested in stocks. And
2. Don't be afraid to stay out of the market, at least
   partially, for a while. Wait for the fat pitches.

Here's another pair:

1. Don't add money to a falling stock position. And
2. Dollar-cost average, investing regularly in a stock no matter
   whether it's up or down.

There are many such dilemmas that frustrate new investors.

1. Buy and hold forever (or at least for a very long time).
2. Sell when something much better comes along.

And

1. Let your winners run.
2. Rebalance your portfolio when one or more stocks come to
   dominate it in a big way.

There are some points on which most Fools will agree (penny
stocks are bad, technical analysis is dubious), but many points
on which we differ a little. Furthermore, scratch the surface of
a Fool and you'll likely find that many of us are a little
contradictory even within our own attitudes. That's fine. It
just means we're complex, and that investing can also be
complex. In some situations, buying and holding for decades
might work well. In others, it might make sense to sell when
something much more promising comes along.

If you're a good Foolish investor, you're always questioning,
examining, thinking and rethinking. You're continually changing
your perceptions of investing, perhaps after making some
regrettable moves and pondering how they came to pass.

1. Life is simple: Eat, drink, breathe, sleep.
2. Life is complicated: Prepare a tax return, study physics,
   raise children.

Wherever you go, even in investing, there are always
contradictions. But that's okay.
_________________________________________________________________

My Portfolio: http://www.fool.com/m.asp?i=397081
My Discussion Boards: http://www.fool.com/m.asp?i=397082
My Fool: http://www.fool.com/m.asp?i=397083
Fool.com Home: http://www.fool.com/m.asp?i=397084
My E-Mail Settings: http://www.fool.com/m.asp?i=397085


SPONSORED BY: Ameritrade
Open an Ameritrade
 account now and get commission-free
trades for 1 month. Learn more at ameritrade.com
http://www.lnksrv.com/m.asp?i=397086


DON'T OVERPAY FOR MUTUAL FUNDS
Avoid excessive fees and get better performance.
Learn the scoop in our Mutual Funds online seminar.
http://www.fool.com/m.asp?i=397087

GET WHAT YOU'VE BEEN MISSING!
Check out our Member Benefits Center for our
latest special offers, just for you.
http://www.fool.com/m.asp?i=397088

BECOME A FOOL!
Get a FREE Investing Guide and more...
http://www.fool.com/m.asp?i=397089

FOOL DIRECT E-MAIL SERVICES
Need to change your address or unsubscribe? You
can also temporarily suspend mail delivery. Click here:
http://www.fool.com/community/freemail/freemaillogin.asp?email=benjamin.rogers@enron.com

Have ideas about how we can improve the Fool Direct or new
e-mail products you'd like to see? Try our discussion board:
http://www.fool.com/m.asp?i=397090
____________________________________________________
(c) Copyright 2001, The Motley Fool. All rights reserved. This
material is for personal use only. Republication and
redissemination, including posting to news groups, is expressly
prohibited without the prior written consent of The Motley Fool.









MsgId: msg-8460-2001-04-24_11-43-53-4223399_5_Plain_MessageAddress.msg-11:53:08(4-24-2001)
X-Version: mailer-sender-master,v 1.84
X-Version: mailer-sender-daemon,v 1.84
Message-Recipient: benjamin.rogers@enron.com