In many regards, the second year of the Sharetrack competition reflects a new set of dynamics where investors are becoming increasingly focused on sectoral as opposed to geographic themes. Indeed, the importance of choosing the right sectors is evidenced by the exceptionally narrow performance of many stock markets during 1999.

With a growing enthusiasm for "new economy" businesses, sectors such as technology, media and telecommunications have performed extraordinarily well. Meanwhile, "old economy" industries, such as retailing, banking and consumer products, have languished somewhat.

For example, although the Euro Stoxx index increased by 30 per cent last year, just two sectors - technology and telecoms - accounted for the lion's share of this performance. Without those sectors, the annual rise would have been only 1 per cent. As corporations seek to strengthen their strategic positions, globalisation and consolidation have become a feature of many industries, incentivising investors to look beyond national borders in analysing their universe of stocks.

For instance, a 20 per cent return on Eircom since flotation in July may have pleased those investors with a blinkered focus on the Irish market (given the latter's pedestrian progress, up just 3 per cent). However, relative to the global industry, this same 20 per cent would represent notable underperformance, particularly when compared to companies such as Telefonica and Deutsche Telekom, both showing appreciations of 102.37 per cent and 122.03 per cent respectively. Whether the sustainability of the stampede into areas such as technology, media and telecoms will continue or whether now is the time for investors to be fishing in many out-of-favour markets remains a contentious issue.

In keeping with the sectoral polarisation of the market, each week we will review a particular industry to help clarify the key features, trends and valuation criteria necessary for you to make informed Sharetrack decisions.

Ryanair and Yahoo had two-for-one share splits, effective February 28th and February 14th, 2000 respectively. All portfolios containing this stock have been adjusted accordingly.

Please note that Goodbody acts as broker to Eircom

Laura De Voy works as a researcher in the private client department of Goodbody Stockbrokers.