Three Ways to Beat a Flat Market.

The article offers advice on investing in difficult economic times. Suppose Warren Buffett is right about the stock market's being under house arrest for another ten years. I don't want this to happen, nor do you. But history speaks. The S&P didn't recapture its 1929 highs until 1954. The Dow first brushed 1000 in 1966 but failed to break out for good until 1982. It got as low as 577 during the dog days of the Nixon denouement. So if Buffett is correct, forget indexing. Forget buy and hold. If you want to achieve boffo returns, you'll have to adopt one of three methods: pick tomorrow's superstars, time the market or time prices. On a recent Forbes investor cruise, attendees got the lowdown on these three methods. Wish you'd bought Microsoft when it went public in 1986? Or Intel after Andy Grove had junked memories for microprocessors? These picks look like no-brainers--now. Nanotechnology has a mortal lock on being tomorrow's gold mine. It will produce trillions of dollars in new wealth over the next century. Market timing seems to me to be a sucker's game. The problem is that the market discounts all known information. If you see something that all the king's horses and men haven't spotted yet, then go ahead: Time the market. Otherwise, don't. Time Prices. Now here's one I can buy into. Especially after I heard John Buckingham, who edits the Prudent Speculator newsletter, explain it. Markets may be efficient; not so, stock prices. Especially not small-cap stock prices. Big mutual funds don't touch them. Analysts have hardly a word to say. So the little stocks sit there, sometimes loved, often not.The formula remains simple. Buckingham buys when the stocks trade at half or less than what he thinks they're worth. He sells at full value. In between, he holds them--often for years.