Dow Jones 7422.17 -101.89 10:30 am PST, March 12, 2003  NASDAQ 1253.56 -17.91 For info, visit access.smallcapnetwork.com S & P 500 789.03 -11.70 To be removed, please click here Russell 2000 343.17 -3.86 VOLUME 03: ISSUE 05  The Party's Over?? It's official. There is, apparently, no reason to buy stocks. This premise is based on the following points: · There is no good news. · Valuations are perceived to be, for the most part, still too high. · War, Terrorism · Consumer confidence sucks · Business confidence (vis-à-vis Capital spending) sucks · Markets are at multi-year lows · Warren Buffett says to do nothing. Do we really believe that Warren Buffett is doing nothing?  When the markets peaked exactly three years ago this week, if you had sold everything and bought either Berkshire Hathaway A (BRK.A) at $41,300 a share or its progeny BRK.B at $1400, you'd be in fat city. The two are now trading at $68,000 and $2285 a share, respectively. Mr. Buffett demonstrated that no matter how ugly the market, there is always somewhere to go. While Berkshire got pounded during the Internet bubble, Buffett's unique style ultimately proved profitable. Meanwhile, the rest of us looked for the tech markets to improve. You are doing nothing. Statistically, the main topic of cocktail conversation these days is which bond or money market fund an investor is either in or contemplating. Contemplating? With 10-year notes yielding 3.5 percent, is that really a place you want to be when rates tick up again? And while there is always a place for money market funds, should it be the only place? Call me crazy, but hello?--the damage is pretty much done. The investing environment couldn't be any more morose. It's not going to turn around tomorrow, but it will turn. Everyone thinks that the turn will come when the war starts. Maybe, maybe not. The point, frankly, is moot. Case in point, Corning (GLW). In August 2002, there was a volume spike as the shares traded down to $1.50. The towel was thrown in so definitively on the stock it seemed the end was nigh. The shares waffled around that level for a couple of months and then began to move up. Not just some blip-the shares, a scant 4 months later, now trade at $6. Nortel-another left for the buzzards at 50 cents in October-trades for over $2. Imclone at $6 last October is now $16. While it would have taken guts to step up at those levels then, is the environment better or worse now? The forest is the trees. While these big boys may seem like exceptions to the rule, I would submit that they are indicative of what's to come. All had capitulated-the proverbial baby thrown out with the bathwater-and only those with foresight saw the opportunity. The bad news in this market isn't those caveats listed above-it's that no one sees any opportunities. Is GE going out of business? Or Peet's Coffee and Tea? Is it reasonable to forego Intel, Cisco or Apple at these levels for some lame bond fund? Or eschew the potential of an Index ETF (Exchange traded fund) such as the QQQ's for the warm bosom of a money market fund with virtually no return?  Here's an interesting tidbit. On Monday, the percentage of volume to the downside was a whopping 94.8 percent. In January, there was another day when the downside volume approached 90 percent. Over the last 70 years, an accumulation of six or so of these types of days within a couple of months tended to indicate a significant bottom. Even so, investors still seem to be acting more like we're at a market top than near a bottom. And ultimately, that approach will cost not only opportunity, but money. A bit of smoke up your tailpipe. Here at the Small Cap Digest, we're quite excited about what's unfolding. We're looking for more nifty companies to highlight and strategies to help you through the unnecessarily complex task of getting the best prices for your trades.  We appreciate your emails. Unlike most investors, we have found that those who populate the small cap world tend to be the most realistic when it comes to the vicissitudes of the marketplace.  Further, if you have any ideas of companies we should look at or ideas for columns-send them on in by contacting: editor@smallcapnetwork.com After all, we're all in this together. Even Warren Buffett. D I S C L A I M E R : The SmallCap Digest is an independent electronic publication committed to providing our readers with factual information on selected  publicly traded companies. SmallCap Digest is not a registered investment advisor or broker-dealer. 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