SOUTH FOR THE WINTER?

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Yet some investors think the technology group is due for a bear market. "It's a cyclical business, but it's being treated like a growth business," says Ken Heebner, manager for the Consolidated Growth Management family of funds. "We are over the top of the cyclical curve. I predict a very big decline over the next 12 months." And some professionals think such stocks are not worth the anxiety. "The stocks are absolutely fascinating to watch," says Eugene Peroni Jr., a market analyst with Janney Montgomery Scott, "but you just have to dismiss them and perhaps go into some less dramatic movers that will offer fewer sleepless nights."

Vinik, for his part, has trimmed his tech holdings to about 30%, according to Eric Kobren, the executive editor of Fidelity Insight. One major decision was to sell off shares in computer chipmaker Micron Technology, which tech experts believe was a prescient move. The semiconductor industry is building so many new plants that prices and profits are sure to go down. But at about the time Vinik was dumping Micron shares, he was publicly touting the stock. The Securities and Exchange Commission is looking into his activities to see whether Vinik's comments were an improper attempt to keep Micron's price from falling as he was unloading it. That's not all the scrutiny Magellan is enduring. Last week studies by the Washington Post and the Seattle-based firm Olympic Capital showed that most of Magellan's recent gains came in the last three trading days of each month. Magellan, by sheer size, often leads the market its way. If it is found to have touted certain stocks to buyers to pump up prices artificially, the sec may file charges. So far, no such evidence has surfaced, and Magellan's defenders say its moves are merely smart trading.

--Reported by Sam Allis/Boston and Jane Van Tassel/New York