The Nasdaq: What A Drag!

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"We've heard all the bad news about third-quarter earnings," says tech investor Kevin Landis, portfolio manager at Firsthand Funds. "The good news comes next." Landis expects investors to come back into tech stocks fairly soon, though he doubts they'll flock back into the old bellwethers Intel and Microsoft, which in the minds of some of the tech savvy are on the verge of becoming also-rans. A new list of tech bellwethers is developing, agrees Jeff Applegate, market strategist at Lehman Brothers. It includes networking and e-commerce facilitators like EMC, JDS Uniphase, BEA Systems, Corning and Siebel Systems. "Tech cycles are short," Applegate says. "You need to be looking for new names all the time."

Where does that leave investors? Focused on the long term and waiting patiently for the current turmoil to abate. If you're aggressive, this is the time to start nibbling at stocks that have fallen, even though they could fall further.

The safer route is to look for value either in a value-oriented stock fund or collection of individual stocks. Despite his near-term worries, Nabi advises picking up proven stocks, like Citigroup, Hewlett-Packard, Heinz, 3M, Verizon, Texaco, Emerson Electric and General Dynamics--all of which have below-market P/Es. If the market tumbles, they'll hold up better than most, and if it rallies, they could be the kinds of stocks that come into favor first.