(MONEY Magazine) – JIM AND DEBBY NIETHAMMER Sacramento, Calif.

HOLDINGS INCLUDE: HEWLETT-PACKARD, INTEL, MCI WORLDCOM, NEXTLINK, QLOGIC

Jim Niethammer's father always preached the value of owning good companies and hanging on to them. He was so conservative he avoided technology stocks even though the family lived in Palo Alto during the '70s and '80s, when it was emerging as the center of the U.S. computer industry.

Jim Niethammer started investing himself when he was a teenager, using money he earned cutting lawns and pruning trees. Now 32, Niethammer hasn't forgotten about buy and hold (except for a time just after college, when he discovered options). Unlike his dad, however, he likes tech. Not long after he moved to Sacramento in 1992 to pursue a career as a commercial real estate broker, he started investing in leading companies, including Intel, Cisco, Hewlett-Packard and Sun Microsystems. But he soon found himself helping smaller tech companies that needed more office space to house their growing operations. One client was Phoenix Fiberlink, later acquired by Brooks Fiber. In March 1997, Niethammer invested about $4,500 in Brooks, which was itself bought by WorldCom (now MCI WorldCom) in late 1997. Niethammer's stake, which includes additional purchases, has risen about 800% in two years.

The success of that investment got him thinking. "It's cheaper for companies like AT&T and WorldCom to buy these companies than to put the fiber in the ground themselves." So he cashed out of a few larger outfits like Sun and Cisco and bought smaller communications firms, including QLogic, NextLink and GST Telecom, which he thinks represent tech's next wave. "What does Wayne Gretzky say?" asks Niethammer. "He tries to be where the puck's going to be."

For advice, Niethammer often turns to his wife Debby, 30. She works for a Sacramento firm that hires out technical contractors, which puts her in a great position to spot emerging trends. Last May she told Jim that she thought Level One Communications, a locally based chipmaker, might be a good bet. They decided to pass since they were buying a house. Ten months later, Intel bought the company. "That would have been a home run," laments Jim. Now Debby likes German enterprise software maker SAP, which she thinks might be worth picking up after a steep decline in price.

Tech stocks make up 60% of the couple's investments. Their other stocks include Exxon, Boeing, Johnson & Johnson and Merck, which Niethammer hopes will cushion their mid-six-figure portfolio when, as he sees it, the inevitable tech downturn hits. "Later this year we'll see a major correction," he says, "based on fundamentals and overexuberance."

As for Internet stocks, the Niethammers avoid them. "There are no barriers to entry," Jim says. "You've got guys in their basements cooking up Internet deals, and any Joe Blow can get into it."

--ROB TURNER