Keith Watanabe * NET 2.0

The more I study stocks, the more I'm inclined to believe that you need to invest in sectors as opposed to individual stocks.  With the housing market going belly up due to the subprime loan crisis, and credit being the next in line of being affected, the finance sector as a whole looks to be in bad shape for a few years (in my estimate).  It's been said that big media is not doing well either.  Of course, big media will continue to blame pirating as their number one detractor, but let's be honest.  The writers strikes, lack of good movies being put out on a consistent basis, the unreal salaries for Hollywood bigshots, the crap being sent by the music industry, etc. are just killing TV, movies and music.  Not to mention you're getting a lot more indepedents coming up, especially since pretty much anyone can pick up a camcorder or even a cheap webcam and do something that isn't elaborate, but at least entertaining enough to distract people from channel surfing on the regular tube.

On the other hand, web technologies really made a comeback in the past few years, with the most emphasis being placed on online advertising.  And of course, with the gas/oil crunch comes the whole desire to look towards alternate energies, which now is a huge buzzword, even with the elections drawing near.

The thing is just based on what I've said, the key is momentum and enthusiasm when it comes to investment.  A lot of investment is based on raw emotion and the energy shared by something.  But a lot of that is really focused on areas where buzzes are generated. 

Truthfully though, if we are to use Graham's notion of investment, what I'm talking about is more speculation than investment.  So I guess we could focus on sector based speculation as something more appropriate here.  But I think there's a lot of truth to what I've said.

For myself, I'd prefer to get into specific areas of funds that handle these things.  It's far too difficult to watch each and every stock, but you can read about an entire industry.  And I think it'd be a lot easier shifting funds around compared to dealing with large numbers of cumbersome stocks.