Since we try and take a fairly buy-and-hold approach to our newsletter portfolios and don't sell at every whipsaw, we want to have a mix of stocks that will perform at both ends of the oscillation.

I sell these intermediate bond portfolios for people that can't go to stocks.

Optimization tells us precisely how to diversify the portfolio, whether I should have 12% in semiconductors or 4% in biotech, etc., and it literally tells me how to diversify not only the industry groups but the stocks.

Often, there are 30 or 40 stocks in the portfolio, and the (trading) turnover is fairly rapid.

I grade my stocks. I'm what they call a quant, one of the geeks of the stock market.

My advice to the average investor in 1988 is to be patient and think long-term. It will take 18 months for confidence to get better and, in the meantime, this is absolutely no place for short-term money.