Regarding that William O'Neil comment, have you read Jeremy Seigal's latest book, Investing for the Future? In it, he talks about "the growth trap" and goes over the longer term outperformance by value (dividend paying) stocks. Quite interesting.

Of course, flippin' growth stocks is a whole lot more fun...

It is always risky to make predictions about market behavior, for they have a strong tendency to bite you when you least expect, or desire it.

Merrill's Biotech Holders (BBH) is an ETF of a kind in that it represents the value of a basket of stocks in the field of biotechnology and biomedicine.

If one compares the performance of the BBH vs. the Semiconductor Holders (SMH), one should notice a disconnect that could be interpreted as a prominent shift of capital away from semiconductor stocks to biotechnology and biomedical stocks.

There is a major difference in financial performance between leading biotech and biomed and semiconductor companies. The difference lies in the nature of semiconductor companies being inherently cyclical in their long-term financial performance. The industry goes through cycles of undercapacity and overcapacity.

The market for biotech and biomed stocks reflects the view of Ray Kurzweil, who has spoken and written extensively on the accelerating growth of this industry sector and how that growth should continue to accelerate due to the overall growth in information technology.

Although the 98-00 market is now famous for the booms and busts in dotcom and telecom companies, there was also a mania for biotech and biomed stocks to the point that during the month of Jan. 00, highly unprofitable companies from the sector were "discovered" and run up from under 5 bucks to over 20 bucks in less than 20 trading sessions.

5 years later, the BBH has recovered to near its mania level, while the SMH has essentially flatlined.

It is a trend worth following.

Jeremy Siegel is a smart man who teaches at an Old Money college that is full of contradictions. On the one hand, they like think of themselves as progressive, while at the same time they adhere to traditions that tend to negate that image. It's a balancing act all the time.

The traditional view is individuals are inherently dumb and naive about investments and QED, the learned professor says, "Give your money to the professionals trained at my university."

It was Peter Lynch, one of the greatest mutt fund managers of all time who said, "All you need are a few" to do extremely well over longer time periods.

Individuals don't have the problems a mutt fund manager faces. By definition, these folks have to limit specific holdings to a few percent or less of the total portfolio.

As such, mutt fund managers who buy into a stock that does fantastically well don't reap as much reward compared to an individual with the ability to overweight a position.