Contrary to popular belief, the Nasdaq Composite Index cannot go to zero. Eventually, conditions in the stock market will improve. New technology products will demonstrate value to customers, and they will be sold. And when the market fundamentals improve, optical stocks, which represent the future direction of technology, will be back to the races.

So we've cooked up a batch of rocket fuel for the public markets -- a group of closely watched optical technology stocks that are likely to be on the forefront of any technology rally. This list is about investing in the biggest trend to hit the market since the semiconductor: the construction of a global high-bandwidth network.

Are we calling the bottom? Sorry Charlie, we don't play that game. Our fishing trip lasts years, not weeks.

In theory, this is a list designed for the next 12 months. In practice, it could be a list for the next decade. We reserve the right to change our minds if things go terribly wrong.

Light Reading editors have employed the team’s unique analysis of company leadership, technology strategy, and financial information to pick some winning players for the New Year. Here we present our list of the Top Ten Stocks likely to bring rewards in 2001.

You can campaign with Light Reading editors for inclusion of certain stocks, but it is an exercise in futility. The only way to influence a stock is to bet where it counts -- on the market, where buyers and sellers of stock determine a company's value at any given moment.

What kind of companies did we consider? Basically, any company sitting somewhere in the optical networking food chain that has established solid growth, decent management, technology development, and/or plain old value. Yes, in some cases, the stocks lack some of these elements (Osicom, for one), but a strength in another area can outweigh weaknesses. In the case of Osicom, it was: "That sucker's cheap!"

The list contains leading optical components, systems, and contract manufacturing companies -- with an emphasis on components. In 2001, Light Reading believes the financial markets will focus on optical components players, which will deliver fundamental technological innovation that will lower the cost of bandwidth and drive broadband applications and services. Because there are fewer optical components companies than systems companies in the public market, they're more likely to benefit from the strong demand for optical technology, still in its infancy.

Are there some wacky valuations out there? Of course. Juniper Networks, which has yet to crack $1 billion in annual revenue, is trading at a market capitalization of $45 billion. Time has proven, however, that there's a reason for companies such as Juniper being high-priced -- and nobody has been adept at calling the bottom on them. The list is meant to represent a slice of the market, a balanced portfolio of optical players providing a gradual upward trend as a whole

The list will most likely be reviewed after six months, when Light Reading editors will decide whether any pruning needs to be done.We've allocated a virtual stash of $10,000 toward each stock, to be purchased at the market open on Jan. 16, 2001. We'll use the value of this virtual portfolio to track our progress over time.

Table 1: Top Ten Optical Stocks for 2001