TULIPS A.M. MARKET COMMENTARY

Awakening from our two season long writing siesta, we suddenly knew how Rip Van Winkle must have felt, for it was a different world that greeted us upon our first tepid steps out of Tulips headquarters into our little town on the Hudson.

Gone were the children of Goldilocks, dashed to bits were dreams of silicon pots of gold at the end of every rainbow, our fearless hero the Pre-Emptive Crusader had long since put down his rate hike baton, and the acrid smell of dot death permeated the holiday season air.

It seems that history did repeat itself during our snooze, and as in countless other new eras when exuberance ruled with an iron grip on the hearts and minds of its followers, the last in the door suffered the worst carnage.

The wounds suffered by those late to the party will cast an evil spell upon the fortunes of the land, turning springtime dreams of endless prosperity into winter time hopes for recovery, but those winter time thoughts of better days ahead are likely to be dashed as the bloodshed continues, as the pendulum continues its age-old tradition of swinging further to the other side than even the most pessimistic expected, the children of Goldilocks wearing tattered rags when the dust has settled.

SILICON DEATH ALLEY  

Stepping through the rubble created by an inability to separate reality from dreams, fact from fiction, salesman's pitch from viability, we sense that even with the ranks thinned and faces long, the march into the abyss of Silicon Death Alley is not at its end, a bottomless pit waiting to swallow the dollars of those who feel the worst has passed.

The ranks of the extinct will continue to swell in the months ahead, making anything dot com a nightmare for investors who stayed the course, hanging on in the belief that after a 90% fall the only possible way was up for their beaten down shares, forgetting that even at pennies on the dollar the possibility of a 100% loss of capital remains.

In the land of dot death, the pyramid scheme to end all pyramid schemes has been thrown into reverse with a vengeance, dragging down all in its wake as the soldiers fall one by one, forcing even the fittest to do daily battle to survive.

In the land of dot death, the carnage has been great, the mightiest of superstocks have been beaten to a bloody pulp, but even at these levels there is likely to be further to fall as the death of the minnows slows the growth rate of the industry Goliath's to a crawl.

Perhaps a glimpse inside the numbers emanating from the finely tuned machine of Tulips headquarters is needed to illustrate the aftershocks that are yet to come. Traffic to our humble abode is booming, with 521% more bodies cramming through the door this November than last, and December's figures running 35% above those of November, but advertising  revenues are running flat with last November--a tale that is being repeated throughout the land.

With these facts in hand, we would avoid those who remain heavily dependant on advertising, for the odds of a safe trip home for these hapless souls is more dim than bright.  Community web site operators a la iVillage and theglobe.com, teen portals a la snowball.com and delia*s (nee iTurf), and numerous content sites have the odds stacked against them in the year ahead.

The goliath's who relied heavily on the second tier will see their growth stunted, the outfitters (or software makers as some of you may call them) will also see their outlook dim.

NEW YEAR'S DOGS

While Y2K is rapidly turning into the year of dot death, Y2001 is likely to be remembered as the year of the aftershock, with the stocks of brokerage firms and real estate companies thrown in the 50%-off bin before the dust settles, the turn of the two industries from boom to bust appearing as it always does: suddenly and without mercy.

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