Title: Moderation Date: 9/30/03 To a college kid drinking beer, moderation is the last thing on his temporarily addled brain. We, however, believe adulthood has ameliorated our excesses and turned us into self-controlled, well-disciplined investors. So after the stock (tech?) boom of the late 90's left us with a huge hang-over, how do we react? Do we approach it differently this time? Hopefully, our ability to adapt through learning separates us from dinosaurs and undergrads. Therefore, avoiding an overexposure to over-priced stocks is an important survival lesson. Many tech stocks are once again trading at P/E's that defy modern financial theory. Accordingly, we should avoid them like another shot of Jagermiester. Only very young firms with hyper-growth prospects deserve a supernormal earnings ratio. Some of you may want to hold a few stocks like this with the 10% of your portfolio designated for speculation, everyone else sell them. The plan is not to own the best performing fund or asset at year end any more than you want to be the most cognitively-challenged at the end of the party. The plan is to maintain a well-crafted portfolio that consistently grows over time and to avoid massive downdrafts. Now as we approach the equivalent of another Friday night in the stock market will we make the same investment mistake: too many growth stocks or have we truly internalized the lessons of 2001-2002? This time try to indulge with the wisdom of a financial adult with a portfolio that offers reasonable upside without the unnecessary risk. Marty Gallagher <- Back Home