SUCCESSFUL TRADERS DON'T

avoid risk they manage it. And because the market often rewards people for doing the seemingly "

" thing, good trading ultimately comes down to

taking the right risk in the right fashion. Such is the essence of "Tradecraft."

If you're among those with new money to put to work, it's worth noting that over the past few weeks, the term "dot-com" has changed from pariah to status symbol. Blame it on short covering or hedge funds if you must, but dot-coms and I'm talking about the old-fashioned, circa-1998 kind are thriving right now like almost nothing else on the board.

Sure, the market indexes have rallied, but it has been Internet stocks that have been leading the charge higher. From Amazon.com to CMGI to Priceline, dot-coms are...well...they're back.

Hard to believe, eh? Since the bubble burst, the term dot-com has become an insult. Reverse stock splits among dot-coms are commonplace, and many companies have actually dropped the suffix from their names altogether.

You certainly don't hear money managers talking about them as they once did. No surprise. In our current regulatory environment, merely saying their names out loud feels shifty enough to warrant an SEC inquiry. The words Bankrate.com and Sohu.com still give some people the heebie-jeebies.

Yet trading is often about having the courage to do tough things, and these days I can think of few things tougher than bringing oneself to buy a dot-com stock. Just looking at the group makes me feel like a goon and since I'm running money for other people, it's even tougher.

I can't give you a fundamental reason why Internet stocks are so hot. I've constructed my own "lean," however. A lean is a worldview. It's a hypothesis, an expectation and a reason for making a trade in the first place. While the bottom might not be in for the stock market's major indexes, Internet stocks might indeed have seen their lows. After all, they were among the first group to "crack" in the late 1990s. Could the irony be that they lead us up from the ashes?

The truth is that, while it seems like only yesterday, a lot has happened since the last time dot-coms showed some strength in the late 1990s. Mutual Funds magazine has closed. Fox's ill-timed market-drama "The Street" was canceled. CEOs, especially the Internet boom guys like CMGI's David Wetherell or Priceline's Jay Walker, are no longer lionized as visionaries, but instead are shunned as carnival barkers at best and white-collar crooks at worst. Cabdrivers are talking about the economy, yes. The stock market? Not a chance.

The vaunted New Economy equity culture of the 1990s is deader than a doornail. A contrarian would argue that this explains the mini-rally in dot-com stocks of late and suggests the surge might have some legs.

Yup, I'm looking at some washed-up Internet stocks these days. I'm doing it in a risk-controlled fashion. And I'm hating every moment.

Jonathan Hoenig is portfolio manager at Capitalistpig Asset Management, a Chicago-based hedge fund. At the time of writing, Hoeing's fund may have positions in the securities mentioned in this article.