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Profiting from losses?
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September 17, 2001: 6:28 p.m. ET
Amid the carnage Monday, some tech stocks soared -- don't be tempted
By David Futrelle
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NEW YORK (Money) - With the ruins of the World Trade Center still smoking, a lot of investors stayed out of the fray on the first day of trading since last Tuesday's horror. Some, no doubt, stood pat because they felt it was the patriotic thing to do. But it was also the most prudent.
We're in largely uncharted territory here, and given the uncertainties, investors with sensibly diversified portfolios would do best to just sit tight. Indeed, the few would-be war profiteers now out there trying to devise ways to outsmart the market may end up only outsmarting themselves.
As far as tech stocks were concerned, most got hit, including Internet travel bookers like Priceline (PCLN: down $1.99 to $3.01, Research, Estimates) and Travelocity (TVLY: down $9.46 to $12.56, Research, Estimates), and widely held stocks like Intel (INTC: down $2.48 to $23.59, Research, Estimates) and Microsoft (MSFT: down $4.67 to $52.91, Research, Estimates) . (For more on who lost, see "Techs finish lower.")
There were a few big techs that bucked the trend -- notably wireless giant Nokia (NOK: up $1.69 to $15.44, Research, Estimates), which shot up as investors concluded that no one would want to be without a cell phone in the uncertain months ahead.
But the biggest gainers were small companies that up until now had mostly been overlooked. Searching around for any tech company that might possibly benefit from the current climate of fear, investors bid up shares in small-cap security stocks like bomb-detection specialist InVision Technologies (INVN: up $5.14 to $8.25, Research, Estimates) , which ended up a startling 165 percent, and face-recognition-technology company Viisage (VISG: up $2.76 to $4.70, Research, Estimates) (up 142 percent).
Investors also searched out companies they thought might benefit more indirectly from America's current worries. With business travel expected to decline -- perhaps precipitously -- investors turned their attention to videoconferencing companies like Polycom (PLCM: up $6.31 to $25.45, Research, Estimates) and ACT Teleconferencing (ACTT: up $2.35 to $7.35, Research, Estimates), both up more than 30 percent. A smallish company called Centra Software (CTRA: up $1.95 to $10.95, Research, Estimates), which enables real-time collaboration over the Internet, gained more than 20 percent.
Will some of these companies see higher sales in the months ahead? Possibly. But are they worth twice as much now as they were a week ago? Almost surely no.
And think about this: Many investors who piled into these stocks today hoping for easy profits came away sadly disappointed. For example, while InVision ended the day as the biggest percentage gainer on the Nasdaq, the only people who actually made money were those who owned the stock before the day began -- the stock opened up more than 200 percent from its previous close only to pull back as the day wore on. Those who tried to jump on the bandwagon easily lost 25 percent or more.
Given the immensity of the tragedy last week, though, it's a little hard to feel sorry for would-be war profiteers who can't seem to make a profit for themselves. 
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