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The right place to be at this point of the business cycle.....

Love rally caps, the small ones
Tiny stocks have investors turning heads
By Thom Calandra, CBS.MarketWatch.com
Last Update: 11:13 AM ET June 4, 2003

..........The so-called micro-caps and nano-caps -- with market caps less than $100 million -- are causing investors to turn their heads toward an arena once given up for dead: highly speculative, cash-hungry companies that could dominate their fledgling industries, if only they got that one contract that could put them in the big time.

For every company with a stock price that has doubled or tripled since the small-cap rally that began in March, there is at least one that has gone nowhere, or traded in a choppy fashion that would make the most seaworthy investor queasy.......

Still, the micro-caps in my view have plenty of room to run this year. Driving the group in part will be the 8 percent or so yearly growth of America's M3 money supply, a growth in cash supplies that will provide -- for better and worse -- steady liquidity for investor speculation

http://cbs.marketwatch.com/news/story.asp?siteid=mktw&dist=mktwmore&guid=%7B660D4BD7%2D4040%....


Running with the bulls
Small growth leads rally in stock mutual funds
By Jonathan Burton, CBS.MarketWatch.com
Last Update: 12:02 AM ET June 9, 2003

SAN FRANCISCO (CBS.MW) - Stock mutual funds enjoyed their best one-week gain since March as buoyant investors shifted into funds that invest in healthcare, biotechnology and financial services stocks.

U.S. stock funds gained 4.1 percent in the week ended Thursday, investment data firm Lipper said Friday, rivaling a 4.5 percent rise in values during the week ended March 20.

Small-cap growth funds led the charge, continuing to break the bear market's grip, and a leading small-cap analyst said more upside is ahead.

Last week's surge marked only the third time in the past 12 months that stock funds produced such explosive gains. The group moved 8.2 percent higher during one week last October.

"It looks like investors - both retail and institutional - are predicting a turnaround," Lipper said in a statement. "They don't want to miss the boat if the argument for a rebound continues to gain strength."

Small-cap growth stock funds were the best-performers, up 5.3 percent. The group has dominated the large- and mid-cap stock fund categories for 10 of the past 11 weeks, according to Lipper. Technology and healthcare investments in particular helped propel the small-stock category ahead.

Indeed, small stocks are poised to move higher, Satya Pradhuman, chief small-cap strategist at Merrill Lynch, predicted.

"This broadening recovery is like to continue 12 to 18 months," he said.

The Russell 2000 benchmark small-stock index has gained 19.2 percent this year so far, practically erasing its 20.5 percent loss for all of 2002.

Sector funds fared even better than more diversified portfolios last week. Health and biotechnology fund advanced 6.5 percent, for example. Buyers evidently have shaken off broad economic concerns and focusing on company-specific fundamentals, according to Lipper.

The science and technology category also showed impressive strength, up 4.9 percent in the week and 27.6 percent year-to-date, Lipper said. Over the past 13 weeks alone, these funds have soared 30.7 percent - giving up ground in just three of those weeks.

Top-performing funds in the week ended Thursday included two volatile but white-hot standouts, according to research from financial data provider Standard & Poor's. Apex Mid Cap Growth (BMCGX: news, chart, profile) was up 14.7 percent, while Excelsior Biotechnology (UMBTX: news, chart, profile) gained 13.1 percent.

Jonathan Burton covers the mutual fund industry for CBS MarketWatch.com

http://cbs.marketwatch.com/news/story.asp?guid=%7BD279D835%2D337D%2D4604%2D85C2%2DECD371F6E342%7D&am....