All jesting aside, these fools are optimists

Is it time to get back into tech?

David: It's probably time to buy the Nasdaq if you are thinking of 10-plus years, because there has been such an erosion in the value of those [firms].

What kind of technology stocks?

Tom: Consumer-technology stocks. In fact, I like consumer everything. Take Electronic Arts company. They basically are a software [games] company. That company has done very well. At this point, video games and computer games are actually bigger than Hollywood. The box office for movies is about $8 billion [annually]. The market for the video-gaming platform, including hardware and software, was $9 billion last year.

And the Nasdaq 100 – Microsoft, Intel, Oracle?

Tom: I'd be inclined to invest in Microsoft rather than to take some of the first-tier technology companies. Microsoft is just such a well-managed company.

David: Also, the companies that have a lot of cash are pretty good defensive investments. Microsoft has a ton of cash. What is it Tom, $25 billion?

Tom: If you compare that to AOL-Time Warner, they are on opposite ends of the spectrum. AOL-Time Warner has more than $25 billion of debt.

We seem to have a problem of public accountability these days. Where do investors go to get good, reliable information?

David: Look for independent analysts. You're talking to one. That's been our relevance for eight or 10 years now. Independent voices matter more now than ever before. There are many independent voices now: Value Line, Morningstar.

Tom: You're asking the right question: Where do you turn? Reading Berkshire Hathaway's annual letters to shareholders for the past 20 years, or investment books, are great ways to learn without being caught up in the daily hype of the market.

What about investments beyond stocks – CDs, money-market funds, US Treasury I Bonds?

Tom: One of the things we write about in the new book is the need for people to have three to six months of emergency savings, which should be put in a money-market account or perhaps a short-term CD. Most people that have run into problems have told us that they didn't have that. They lost their job or they ran into personal difficulty and what did they have? Just a couple of months of cash set aside.

David: So having 90 to 180 days of cash set aside should be a core investment for everyone.

What's the mood of the public that you are discerning? Are people grim, or becoming optimistic?

David: It's hard to generalize. A lot of them probably reflect our basic optimism about the American economy and the American stock market.

Tom: If you can generalize about the group, they are probably 45 to 55 in age and their 401(k) plans are down.... They're not throwing their hands up in despair, but they are trying to figure out what to do next. Their philosophy has changed. They are ... being conservative with their money. They would rather see actual 7 percent growth than the potential for 40 percent growth – or a 40 percent decline.

And the bottom line from you two seems to be general optimism on the market and the economy.

David: Yes, it's a mistake to be pessimistic. A lot of people are afflicted by the 'rowboat syndrome, ' a great phrase from John Bogle [founder of Vanguard Group]. They are paddling down the river looking backward. They think that whatever has happened in the past six months is what's going to happen looking forward. But they are going to be entering new territory. They should be looking ahead.

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