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Show TheSalt Lake Tribune BUSINESS Extreme Dispersion HasAltered gone “off the charts.” The Way the Market Functions returns amongindividual stocks Put the bull out to pasture. Sendthe bear back to the woods, Bull and bear markets — the traditional termsinvestors use to classify broad rising andfalling trendsin security prices — don't happen the way they used to any Dispersionis the variability of within the sametimespan. It dif- fers from volatility, which mea- sures the degree to whichstock prices fluctuate overtime. “The highestvolatility month MUTUAL FUNDS in modern market history was October 1987 [whenstock prices crashed],” de Silvasaid. “But dis- persion that monthwasnotun- usual. Almostall stocks hadbig moves,but they all moved together.” Thestatistic he usesto track dispersion (technically, the standard deviation ofindividual stock returns around the market aver- more. Today stock-price trends mostoften occurin fragmented patterns within the market, as individual stocks and groupsof sto¢ks go their own very different wags. You still get dramatic gains and losses, such as the Nasdaq Composite Index’s 37 percent drop be- tween March 10 and May23 this year. But note that the Standard & Poor's 500 Indexlost only 1.3 per, cent overthat samestretch. Orlookbackto the fourth quarter of 1999, when the Nasdaq composite gained 48 percent while the S&P500 posted a much smaller 15 percent return. “I'm not sure everyone agrees what ‘the market’ is any more,” said Michael Sapir, chief execu- tive of ProFund Advisors LLCin Bethesda, Md., which manages $2.6 billion in 27 mutual funds. “It’s a lot more complicated than it usedto be.” This doesn’t have to present a big problem for long-term inves- CHET CURRIER tors, It only reinforces the already persuasive argumentforpatient, diversified investing.Still, it isa age) set a modern monthly high of 12 percent in September 1998, com- pared to whathad been the usual range of5 percentto 8 percent.It reached 16 percent in December 1999, and 17 percent in February sign worth every investor's attention of basic changesin how the investment gameis played. On either the way upor the this year. way down,stocks areless andless pronetofollow parallel courses. Onereasonforthis: Mostfund These have served as exclamation points in a long-term trend that has seen annualdispersion managers and otherprofessionals, followinga continuous“fully invested” philosophy, now move money from one areaof the market to another, ratherthan into and outofstocksaltogether. Someofthe mosttelling evidence, says HarindradeSilva, président ofthe $1.3 billion fund managementfirm of Analytic Investors Inc. in Los Angeles, lies in recent data on “dispersion” of stock returns, which he says has Sunday, August 6, 2000 chance of beating the market Money Scoreboard withoutnecessarily a commensurate increasein skill.” says Katie Koehler, Analytic Investors’ diree- tor of client relations. “Investors need to be carefulnot to mistake luckfor skill.” Bank Rate Monitor's surveyofthe 10 largest banks and S&Ls in the 10 largest metro areas. Mortgages are conventional loans at 80 percentloan-to-value. Car loans are for 20 percent down, 48-month, new car. Here is the tricky part: While Personalloansare for $3,000 24-month unsecured loan. somefundswith concentrated portfolios of 20 to 30 stocks may Mortgages rack up dazzling results in this en- k-controlled”fundslike Date uity Fund. This week 2.12 §.24 Last week 2.12 5.26 Last year 2.04 4,25 But anotherantidote pops im- mediately to mind — a broadindex fund that comesasclose as News columnist. He can be reached next. “This increases a manager's at ccurrier.@Bloomberg.net. last year andhasslipped back 3.7 percent so far in 2000. After all, when you invest in the whole market, variability of Fund(ranked by size) Smith Barney Cash Port/Class A Merrill Lynch CMA Money Fund Vanguard MMR/Prime Port Fidelity Cash Reserves Schwab Money Market Fund Schwab Value Advantage MF MorgStan Dean Witter/Active Assets MorgStan DeanWit/Liquid Asset Centennial Money Market Trust returns withinthat market Chet CurrierisBloomberg PaineWebber RMA MF/MM Port Prudential/Command Money Fund Wells Fargo MMF/Class A Merrill Lynch Retirement Res. MF Alliance Capital Reserves Evergreen Money Market Fund Avg. taxable money fund Tax-free funds KNIGHT RIDDER NEW! tomers nationwide. Here are the Top 25 from July’s list, plus descriptions of the Top 10. 1. Unlock Behavior, Unleash Profits, by Leslie Wilk ‘Braksick; McGraw-Hill. 2. Customer Centered Selling, by Robert Jolles; The Free Press. DVD, can now be copied and sent 3. Living on the Fault Line, by Geoffrey Moore; HarperBusiness. 4..Discovering the Soul of Service, by Leonard Berry; The Free Press. 5. Leadership From the Inside Out, by Kevin Cashman; Executive “These copies are a hair below DVD quality,” said Lance Trebesch,;Southern California general Keith Srakocic/the Associated Press manager at Viant, an Internet similar file-sharing technology. Two software programs are the source of Hollywood's digital headache. Oneis DeCSS, which unravels the embedded Content Scramble System, or CSS, and allows a movie file to be copied from a DVD ontoa computerhard drive. Scott Sanderis president and CEO of SightsoundInc., a companythatsells movies overthe Internet. The second program is called overonlinedistribution of movies, DivX — norelation to the now abandoned digital video disc sys- they are supporting the creation of technology that provides for se- encryption method almost as soon cure transmissionofvideo overthe Internet. Sightsound Inc. offers short films for rent or sale on its Web Video-rental chain Blockbuster Inc.will soon stream movies from tem. It compresses the moviefiles to about 800 megabytesfor a typical movie and allowsa feature-length film to be downloaded in a few hours over a high-speed Internet connection. Add to this mix pirates who tal video camera on a tripod and taking the audiodirectly from the films for pay-per-view viewing over the Internet in the next few years. projector. They then send their copiesoverthe Internet. The movie industry is waging an aggressivelegal fight to protect its copyrights. Sightsound is also making many ofits films available over Gnutella, a “peer-to-peer” filesharing network where many of the pirated copies of current mov- The Motion Picture Association of America has sued www.2600.org, a Web site that and the MPAA recently joined ies canalso be found. “The copyright holder has only with the recording industry to sue one defense distributes the DeCSS program, Scour Inc., whose online file- use andthe resulting file can be 9 gigabytes or more —larger than sharing service is similar to the music bazaar offered by Napster. many computer hard drives. But Studios feel confident about the distribution of DeCSShassent shudders through the movie industry, which has over the past three years released more than 5,000 films in the DVD format. their case against Scour, but they said Chris McGurk,vice chairman at Metro-Goldwyn-Mayer _Inc., whichhasoneofthelargest movie libraries. site. The Pennsylvania company encryptsthe files, then sells electronic keys that unlock the file once for a rental or permanently for a purchase. Miramax will use the Sightsound technologyto distribute 12 copy first-run movies from the projectionists’ booth, using a digi- For the average consumer, the program is still too complicated to It’s very disconcerting for us,” ERVICE, Each month, 800-CEO-READ compilesa list of best-selling business books based on purchases by its more than 10,000 corporate cus- online. nd thanks to advanced digital video recorders and a cadre of enthusiasts, even first-run movies such as “Gladiator” and “The Perfect:Storm”can be on the Internet less: than 48 hours after they hit theaters. industry is pursuing its own case 6.14 ° 5.79 6.15” 475 4.93: - This Last 6 mos. week 6.13% 6.10% 6.37% 6.26% 5.94% 6.29% 6.17% 6.08% 5.98% 6.12% 6.18% 5.87% 6.17% 5.73% 6.59% 5.98% 3.61% week 6.09% 6.12% 6.37% 6.26% 5.92% 6.27% 6.16% 6.08% 6.04% 6.10% 6.18% 5.85% 6.18% 5.73% 6.59% 5.96% 3.54% ago 5.20% 5.30%. 5.54% 5.48% 5.26% 5.59% 5.46% | 5.40%. 5.27%. 5.18% 5.45% 5.14% 5.58% 4.91%: NAL. 5.14%, 2.77% Gannett News Service Business Books CEOs Are Reading LOS ANGELES — A few months ago, Hollywood executives pondering the impact ofNapster on the music industry wondered how long it would take before fulllength movies could be sent over the Internet. Thewaitis over. Any movieissued on a digital video disc, or against 5.64 Sources: bankrate.com and iMoneyNet, Inc. BY GARY GENTILE cides whether to shut down the service pendinga trial, the movie 5.80 5.64 457 Yields on biggest money funds ‘THE ASSOCIATED PRESS it expected. Industry executives are closely watching the case of the recording industry against Napster Inc., a company that makes software that allows users to swap digital musicfiles. While a federal court judge in San Francisco de- 6-months 1-year 2-1/2-year 5-year Here are the 15 biggest money-market mutual funds open to individuals with their current seven-day annualizedyields. Fund, whichgained 23.8 percent Technologythat shook thé music industry now closing in on movies mandis here.” Hollywood is facing the same issues plaguing the music industry and facing them muchsoonerthan MMDA* * Money Market Deposit Accounts possible to mirroring the market as a whole. Example: The Van- guard Total Stock Market Index Hollywood CringesasIt Enters the Napster Era business consulting firm. “For all intents and purposes, video on de- Bank deposit yields Bank Rate Monitor's weekly survey of the 10 largest banks and S&LS” in the 10 largest metro areas. his UAM Analytic Enhanced Eq- from stockto stock,it follows that the moreinvestmentreturnswill vary from one mutual fund to the Car Personal card* 974 15.25 17.45 973 15.26 17.43863 14.48 15.81" “Average has changed from fixed rate cardto a variablerate card. levels will experience higher than normal variations in perfor,”’ de Silva says. He presents commercial for quantita- doesn’t concern youatall. to release the copy- rights in this new useful way and fill the demand,”said Scott Sander, Sightsound president and chief executive officer. “Will pirated cop- www.2600.org. At the endof tes- ies ofmoviesstill be available? Yes. But we have to crowd them out with legitimate copies at afford- are less so about the case against timonyin thetrial in U.S. District able prices and then enforce the Court in New York, the judge indicated he would probably rule the law.” site's distribution of DeCSSis pro- lysts concede that the latest en- tected cryption such as the kind Sightsound uses lasts only a year or so speech under the First Amendment. While the studios fight in court Even the most optimistic ana- code. That’s whyworkstarts ona new as the old one is implemented. a central computer — a plan Hollywood prefers because it keeps themin controloftheirintellectual property. Excellence. 6. The 7 Habits of Highly Effective People, by Stephen Covey; Si- mon & Schuster. 7. The ArcofAmbition, by James Champy and Nitin Nohria; Perseus Books. .@8. Fast Forward Leadership, by Louellen Essex-andMitchell Kusy; Financial Times/Prentice Hall. 9. The Leadership Engine, by Noel Tichy and HarperBusiness. 10. Successful Personal Money Market Account ie! oti Service Firm, by David Maister; TheFree Press. 12. Reengineering the Corporation, by Michael Hammer and James Champy; HarperBusiness. 13. 1001 Ways to Energize Em- ployees, by Bob Nelson; Workman. 14. The Five Temptations. of a CEO, by Patrick ay Jossey-Bass. 15. Who Moved My Cheese? by Spencer Tichy; Crown Business. 17. Understanding Leadership Competencies, by Pat Guggenheimer and Mary Diana Szulc; Crisp Publications. 18. A Peacock in the Land of Penguins, by Barbara Hateley and Warren Schmidt; Berrett-Koehler. 19. Fish! by Stephen C. Lundin Ph.D., Harry Paul and John Christensen; Hyperion 20. The Discipline of Market Cohen; Leaders, by Michael Treacy and Manager's Fred Wiersema; Perseus. and Theater Quality Sound at Breakthrough Prices! Until now,a high-performance home cinemasystem couldcost as much as a luxury automobile. 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