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Berger Tech Fund, GY SWC ITW Lord Abbett Large Cap GF
An SI Board Since October 2000
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Emcee:  Mark Johnson Type:  Unmoderated
The Internet Financial Connection, October 21, 2000

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!!!!THE IFC HAS ONE OF THE BEST TRACK RECORDS AROUND!!!!

In 1998, 225 different specific stock ideas appeared in
the IFC. As of July 5, 1999, the return of the group
of stocks that appeared in the IFC in 1998 rose an
astounding 51%. What is even more amazing is that in 1999,
185 stocks appeared in this column and as of July 3, of
2000, that group of stocks was up 56%.

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Presented by Mark Johnson, Editor of the IFC

It appears on Silicon Investor
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This newsletter can be viewed at

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In This Issue:

1. Tech Pro focuses on e-commerce and software
2. GenCorp
3. Stillwater Mining
4. Illinois Tool Works
5. Dominant companies make attractive investments
6. Disclaimer

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1.

Playing the recovery in small-cap techs

siliconinvestor.com

Mark Johnson, Editor of the Internet Financial Connection,
provides the following interview with Bill Schaff of the
Berger Information Technology Fund
bergerfunds.com. Below is the write-up.

Warren Buffet once said, "If it plugs in, don't buy it."
He was referring to purchasing stock in technology
companies. His investing philosophy seems rather sane
given the recent correction in the technology sector.
The tech-heavy Nasdaq Composite, which was trading at
around 1,000 at the beginning of 1996, is up an
impressive 200 percent versus roughly a 100-percent
gain for the S&P 500 and the Dow Jones Industrials
Index during the same period.

People have been exiting from technology stocks as if
someone yelled fire in a crowded movie theater. Is there
really a fire or is this a false alarm?

Bill Schaff of the Berger Information Technology Fund
notes that 1999 was pretty much a no-brainer. Almost
anything and everything related to the technology space
appreciated. He believes that the key to making gains
in technology reside in making the right equity selections.

One theme Schaff is focusing on is the proliferation of
e-commerce, centering on infrastructure and security.
Another favorite space is software.

One top holding on the software protection side is RSA
Security (RSAS 56 1/2), which provides electronic
security for e-commerce applications. Schaff states,
"I think some old-line anti-viral players which are
slow, steady and boring, but generate a lot of cash,
have excellent balance sheets and offer good business
prospects." One name in that space he finds alluring
is Symantec (SYMC 34), which Schaff thinks will
continue to post impressive top-line growth going
forward.

Schaff mentions that he favors software vendors in
the fourth quarter because sales are typically strong
then. One name he finds enticing in the software
infrastructure side is BEA Systems (BEAS 81 1/4).
BEAS, one of the leading default enterprise application
infrastructure companies that continues to win market
share, offers a leading product called Web Logic.

Actuate (ACTU 29 7/8) is an appealing software play on
the reporting of data used in e-commerce applications.
"I like Actuate because it provides a needed application
in the information delivery and reporting segment and
should do very well," says Schaff.

Shares of Broadbase Software (BBSW 10 5/8) have
collapsed from a high of $86, set back in March, to
just over $10. The company is a leading provider of
analytic and automation applications used to analyze
customer data in e-commerce infrastructure
applications. With shares of Broadbase Software
significantly depressed, Schaff finds its stock
"attractively valued."

Vitria (VITR 26 3/4) is also in the application
infrastructure space. Schaff notes that business is
going extremely well and the company offers a
competitive product, adding that shares of both Vitria
and Broadbase Software are heavily out of favor. "I
think these companies will recover because they have
decent business models and their products are
experiencing strong demand," he says.

One "special situation" found in the Berger Information
Technology Fund is Cabletron (CS 27 1/4), which is
breaking up into four separate companies. Schaff figures
the sum of the company's parts are worth more than $42.

One area Schaff has been avoiding is the commodity chip
area. He explains they are highly cyclical even though
a lot of people have recently touted them as not being
as cyclical. Another area he believes is still overvalued
is the optical networking space. "Optical networking,
exciting as it is, the valuations were absurd. . . I
would not be surprised to see the valuations of that
group move down," Schaff notes.

Schaff urges investors to diversify and not to "bet the
ranch on any one company." The Berger Information
Technology Fund mainly invests in profitable technology
companies that benefit from corporate information
technology spending. Schaff believes investing in
companies that are benefiting from considerable
amounts of corporate technology spending offers a
more stable and profitable way to invest in the tech
sector.

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2.

GenCorp

siliconinvestor.com

Cengiz Searfoss of West Broadway Partners provides
the following stock idea on GenCorp (GY 8). Below
is the write-up.

Have this year's technology blues taken a bite out
of your investment portfolio? If you answered yes,
you are not alone. The majority of investors have
felt the effects of the technology crunch. Many of
the value-oriented equities have experienced less
of a decline when compared to technology related
stocks.

Cengiz Searfoss, a value equity strategist at New
York-based West Broadway Partners, is presently
high on GenCorp (GY). The company is primarily
made up of three separate divisions: aerospace
defense, automotive components and fine chemicals.

Searfoss points out that those three entities
generate annual revenues of about $750 million.
Yet, GenCorp's market capitalization is around
$340 million. He notes that the company is trading
at about three times cash flow, which is "extremely
attractive."

Another kicker in GenCorp's favor is that it owns
3,100 acres of land in southern California. The
company recently sold one acre of land for $260,000.

Searfoss figures GenCorp's combined assets,
including the real-estate holdings (which he values
at a conservative $100 million), are worth at least
$16 to $18 per share. He estimates GenCorp will
earn $1.23 in fiscal year 2001.

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3.

Stillwater Mining

siliconinvestor.com

Joe Shaefer of Investor's Edge
investors-edge.net, (an annual
subscription is $149 for one year, phone
800-947-0085 for more info), provides the following
stock idea on Stillwater Mining (SWC 27 1/8).
Below is the write-up.

Stillwater Mining isn't exactly a name that gets
one's attention. At first glance, it appears as if
it's a typical mining company. Joe Shaefer of
Investor's Edge contends that Stillwater Mining
is a backdoor play on the technology sector.

Stillwater is the largest North American miner and
producer of palladium and platinum. The company's
mining activities are focused on the J-M Reef, which
is the only known significant source of platinum
group metals outside South Africa and Russia.
Stillwater holds about 10 percent of the world's
palladium and platinum reserves, which are used
in a number of electronic devices including cellular
handsets, personal computers, fiber optic cables,
semiconductors and data storage. Other uses include
catalytic converters in automobiles, anticancer
drugs, jewelry and dental alloys.

Shaefer believes market prices for palladium and
platinum should remain stable. He notes that Russia
controls about 80 percent of the world's reserves.
"With that abundance of control they can pretty much
manipulate the market to their advantage," he says.
"Within the last several weeks, the Russian Finance
Ministry assumed full control of the country's
precious metals. That move should secure palladium
and platinum prices, with the likelihood of price
increases down the road. The Russians do not want
lower prices, so the supply is going to be
constrained. It is in Russia's best interest to
keep the commodity's value high," says Shaefer.

Shaefer adds that the demand for palladium and
platinum has been very strong and presently
outstrips supply. "Regardless of a boom or bust
technology market Stillwater will be able to sell
whatever they produce," he says, adding that
Stillwater has been spending more money on
infrastructure and equipment in order to meet
demand. The company recently introduced a
three-year plan that will vastly increase
palladium and platinum production. Shaefer
thinks the shares of Stillwater could reach
the mid-50s within the next 12 to 18 months.

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4.

Illinois Tool Works

siliconinvestor.com

Ingrid Hendershot of Hendershot Investments
(703-361-6130) provides the following stock idea
on Illinois Tool Works (ITW 55 1/2). Below is
the write-up.

Founded in 1912, Illinois Tool Works (ITW) has
steadily grown into a $9 billion company. ITW
designs and produces highly engineered fasteners
and components, equipment and a variety of
specialty products for customers around the
world. The company has more than 500 decentralized
business units in 40 countries.

Since 1970, acquisitions have contributed
significantly to ITW's growth in sales and earnings.
Late last year, ITW merged with Premark, which
brought ITW nearly 80 businesses with products
marketed in more than 100 countries.

Ingrid Hendershot of Hendershot Investments notes
that as ITW integrates Premark's operations into
its own, management's goal is to double Premark's
operating margins from 9 percent to 18 percent
within a five-year time period. "While this may
seem ambitious, ITW has accomplished such feats
in previous large acquisitions," she says.

Over the past five years, ITW's net income has
grown at an annual rate of 14 percent. Cash flow
from operations has steadily increased and now
tops $1 billion.

Hendershot believes that ITW sports an attractive
valuation for a company with a successful
long-term growth track record, substantial cash
flow generation and a steady record of increasing
dividends. ITW is projected to earn $3.83 in 2001,
versus earnings of about $3.40 this year, and
Hendershot thinks long-term investors should
consider adding ITW as a core holding to their
portfolio toolbox.

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5.

Dominant companies make attractive investments

siliconinvestor.com

Joe Dancy, co-editor of the IFC and editor of The Lone
Star Growth Investor provides the following article.
To conserve bandwidth please click the link below to view
the article.

siliconinvestor.com

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6.

siliconinvestor.com

DISCLAIMER: All information contained on this page are from the
authors cited. The information is believed to be reliable but
there is no guarantee to its accuracy. Stock ideas presented by
mutual fund managers, money managers, newsletter writers and SI
participants may be bought or sold by them or the company they
represent anytime before or after being presented in this
newsletter. Writers and editors of the IFC publication may own
positions in the securities mentioned above. Positions may be
liquidated at any time. Anyone purchasing the stock ideas
above should consult a financial advisor before doing so.
The stock ideas mentioned above are not solicitations
to buy or sell but to provide people with information from many
sources. I (Mark Johnson editor of the IFC) am not paid any
fees by the above writers nor by the companies represented.
The stock ideas may represent a starting point for investors.
People are encouraged to do their own homework before buying
any stock. Neither Silicon Investor or the Internet Financial
Connection will be responsible for any loss occurring from
the purchase or sale of the above securities or any securities.
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ReplyMessage PreviewFromRecsPosted
22Hey, I am real sorry I posted that a year ago. Please accept my sincere apology.Don Pueblo-10/12/2001
21Chicken, Bill Clinton didn't "recall" too much about Monica eitherMark Johnson-10/12/2001
20Smoke and mirrors? I don't recall saying that. I was simply curious since yoDon Pueblo-10/12/2001
19Chicken, great question!!!!!!!!!!! You always claim I use "smoke and mirroMark Johnson-10/12/2001
18Quick question, Mark: Your current ad on SI has a little blurb at the bottom...Don Pueblo-8/11/2001
17Mark, is there a prize for creating as many spectacularly useless message boardsRupert-11/14/2000
16Stop it! You are scaring me!Don Pueblo-11/4/2000
15How can I stalk you on my own thread? You are the one that stalks me on the threMark Johnson-11/4/2000
14You nimrod. Those are not my stock picks. Stop stalking me.Don Pueblo-11/4/2000
13Chicken, quick note. You claim my performance is generated using "smoke aMark Johnson-11/4/2000
12MSFT, AMD, and CSCO? Man, you are a <i><b>genius</b></i>Don Pueblo-11/3/2000
11Chicken Little, What ever you do don't put my bunny rabbits in boiling wateMark Johnson-11/3/2000
10Number 9, paging number 9. You will now be under our control #9, proceed to the bbgold-10/30/2000
9WOW, This thread is Happening! Click here for "this page cannot be displayebbgold-10/30/2000
8Mork, It's <i>you're</i>, not <i>your</i>. 20Don Pueblo-10/29/2000
7Chicken, Your right, what I wrote can be confusing. In recent editions of theMark Johnson-10/27/2000
6Mark, you write: <i>In 1999, 185 stock ideas appeared in the IFC. As of JDon Pueblo-10/26/2000
5You're totally right. Bye bye.Don Pueblo-10/22/2000
4Chicken you said: <i>If you want a reference area, you can create one forMark Johnson-10/22/2000
3Mark, I'm not stalking you, and I'm not following you. I make my own picDon Pueblo-10/21/2000
2Chicken, I am convinced you need a serious hobby other following me around and Mark Johnson-10/21/2000
1Jeez!!! Could you like make your header text ten thousand words long with 100 mDon Pueblo-10/21/2000
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