(October 30) – “Spencer Nauman has changed his mind on technology, but don’t think it was easy,” writes Danny Hakim in today’s New York Times.

“Last year, like so many other individual investors, he bought the racehorses of the bull market. ‘The typical big names,’ he said. America Online. Microsoft. Nokia. Yahoo.”

” ‘Last year, there was a feeling of invincibility, and that got even stronger early this year,’ he said. ‘Now people are rethinking the assumptions they had.’ “

“And that includes Mr. Nauman, a 29-year-old student and research assistant at the University of Denver’s business school. Last year, his biggest holding was Cisco Systems, the networking giant. This year, it is Berkshire Hathaway, the company controlled by Warren E. Buffett, the technophobic investor who quipped that his shareholders would have been better off if he had spent 1998 at the movies instead of at the office.”

“Back in March, when Mr. Nauman told some of his business school buddies that he was going to dump Cisco and buy the slumping Berkshire, his idea was not well-received.”

“Berkshire? Buffett? How retro. How quaint. But how reflective of the change of heart that has amateur and professional investors alike rethinking their love affair with technology and telecommunications stocks.”

“Classmates, said Mr. Nauman, ‘used to call me and tell me what to buy.’ “

” ‘It was always JDSU, Nortel and Sycamore,’ he said, referring to JDS Uniphase, Nortel Networks and Sycamore Networks, all red-hot darlings of the bull market.”

“Then, the darlings deflated, en masse.”

” ‘Now they ask me what I’m looking at,’ Mr. Nauman said. ‘I can really tell there’s been a change among my group of friends.’ “

“The change is that the investing pendulum is starting to swing back toward value investing, Wall Street’s black sheep during the bull market.”

“Value investors, the likes of Mr. Buffett, search for bargain stocks that have fallen out of favor but whose businesses remain sound. In stark contrast are the growth investors, like Janus Capital, the Denver-based mutual fund company that soaked up more than $35 billion in investors’ money last year as its funds soared to the top of the performance charts. Growth investors pay less mind to intrinsic worth as they search for companies with accelerating earnings or revenue growth.”