By Joseph Nocera Reporter Associate Christine Y. Chen

(FORTUNE Magazine) – The mayor is talking about his money. "What I've tried to do," says the mayor, "is put together a balanced portfolio that will meet my long-term objectives. I like the funds," he continues. "Vanguard Index fund, MFS Growth, the Putnam funds. Things like that. No Internet stocks," he laughs, though he did take a flier a few months ago: "I got a hot tip on some medical stock"--conveniently, he has forgotten the name of the company--and of course it turned out badly. "How much did I lose on that, Dottie?" the mayor asks an aide sitting across from him. "About $3,000?"

"Something like that," Dottie replies.

"Never doing that again," says the mayor with a chagrined chuckle.

The mayor is 58-year-old Vincent A. "Buddy" Cianci Jr. He is sitting in his large, ornate corner office in the large, ornate City Hall building in downtown Providence. City Hall, as it happens, is right next door to the local Charles Schwab office, one of Schwab's fastest-growing branches; it has more than doubled in size since 1995, topping the $1 billion mark in assets this past February. It is also where the mayor has his retirement account. Of course, being the mayor, Cianci doesn't really have time to walk over there and check on his portfolio. Not to worry. He uses the Schwab 800 number, which he knows by heart and calls at least once a day. "I like to see how I'm doing," he says.

A short, toupeed, gregarious man, Cianci had a brush with national notoriety some years ago when he was convicted of felony assault for beating up a man he believed was having an affair with his wife. But that was way back in 1984, and Providence has long since forgiven him. During the past decade this once down-in-the-dumps New England city has undergone an astonishing resurgence--with lots of chic restaurants, a shiny new downtown mall, a white-collar job boom, and even a hot new television show--and Cianci is widely credited as the driving force behind it all. Indeed, he claims to be the second-longest-serving big-city mayor in the country, having held the office (in two different stretches, pre- and post-conviction) for some 19 years. Alas, there appears to be some question about how much longer his tenure will last: In recent months the Providence Journal has published a series of stories about a wide-ranging grand jury probe into corruption at City Hall. It seems squarely aimed at Cianci. The feds are calling it "Operation Plunder Dome."

But Cianci can fret about that some other time. Right now he's having too much fun talking about his new favorite hobby, the stock market. "I never used to pay much attention to the financial news," he says. Then, a few years ago, when his administration took control of the city pension fund, Cianci began attending meetings with investment advisers who were vying for the chance to manage part of the city's $300 million in pension assets. "I should have been paying tuition, I learned so much," he recalls. He learned about "risk management" and "asset allocation" and "staying the course." The tutorials made him realize that he should be using the same principles to manage his own money. Which, he says, he began to do; his portfolio of mutual funds is diversified and designed for the long haul. "Like everyone else, I'm trying to make my money grow for retirement," he says.

Now the mayor is rolling. When the Fleet Financial Group announced it was buying BankBoston this past March, Cianci tells me, he bought some stock in both companies. Since then the stocks haven't done much, but he's not worried. After all, he knows both Charles Gifford, CEO of BankBoston, and Terrence Murray, the Fleet CEO, who is also a native Rhode Islander (until 1995, Fleet was headquartered in Providence). "You don't bet against Terry Murray and Chad Gifford," says the mayor.

"I've got this scholarship fund too," Cianci adds in the next breath--among other things, he markets Buddy Cianci marinara sauce to raise money for the fund, which gives grants to high school seniors heading to college--and he decided that he should be investing that money as well. Most of the scholarship money is in mutual funds, but about 25% is with a New York-based hedge fund called TGT Capital Partners. The mayor's nephew, it turns out, is one of the partners. "I turned over $50,000 to him," Cianci says excitedly, "and before I knew it, it was up to $100,000. So I called my nephew and said, 'Give me that $50,000 back!' I didn't want to take any chances, you know. I put that in the conservative part of the portfolio." Even after the original $50,000 was withdrawn, the mayor proudly notes, the remaining stake in the hedge fund has grown to $140,000. My head is spinning as Cianci tells me this story. The mayor of Providence has money in a hedge fund? Who knew?

We talk for about 45 minutes before the mayor takes me to an outer office and introduces me to one of his aides, Gregory Marcogliese, 49, who, he says, is the real stock maven of the office. These days every office has someone like Marcogliese--someone who switches on CNBC when he wakes up in the morning and always seems to know what the market is doing. "It's down 85 today," Marcogliese says to no one in particular. "Light volume." When we are introduced, Marcogliese immediately asks my opinion of bank stocks. They're among his favorites right now.

Marcogliese turns his attention to Cianci. "I just sold my Applied Materials at $70," he tells the mayor. "Remember when I told you about that one? It was $28 then. You shoulda listened to me on that one." "Shoulda, coulda," laughs Cianci. Another aide, Linda Verhulst, pops up from her desk. "I love IBM," she says. "Always have. About four months ago I wanted to buy some IBM when it was around $90. But my son--he's a broker with Morgan Stanley--said he didn't think it was such a good idea. Then it went to $120. I wanted to kill him." She laughs good-naturedly, as does everyone else in the room. Pretty soon all the Cianci aides in the room have joined in, trading stock stories, comparing market notes, sighing at their losers, reveling in their winners. Just like everyone else in America.

Is there any doubt that we've entered the Age of the Individual Investor? Of course there isn't, not anymore. It's probably not too much to say that small investors have been the critical factor during this latest phase of the great 1990s bull market. Their 401(k) plans have supplied steady infusions of new capital. Their refusal to panic has steadied the market in rocky times. With the help of the Internet, they've broken down many of the barriers that once separated Wall Street from Main Street--barriers to information, to low commissions, to IPOs, and to all the rest of it. Collectively they have something they've never really had before: power. Do you think the stock exchanges are planning to extend the trading day because the professionals want to work longer hours?

But something else has been going on too. Slowly but inexorably, investing has become an integral part of everyday life in middle-class America. People talk about the market now in the same way they talk about their health or their kids' schools or the weather. They tune in to CNBC. They have their portfolios constantly updated on their office computers. They know which of their neighbors like mutual funds and which trade Internet stocks. Half the population, it sometimes seems, is in an investment club. There is a level of awareness--and a level of sophistication--about the market that is simply unprecedented. It has become part of the popular culture.

All of which led me to wonder what it means that we're all so in tune now with the stock market. Once upon a time, of course, heightened awareness of the stock market on Main Street invariably meant that a market top was near. One thing I wondered was whether that old Wall Street truism--that the individual investor is the canary in the mine--still made sense. I had my doubts.

In search of answers I headed to Providence, the biggest city (population: 150,000) in the smallest state. I came here because I grew up here, in precisely the kind of well-tended, middle-class neighborhood where nobody used to be in the market and everybody now seems to be. To be sure, I grew up in the down-in-the-dumps Providence of the 1950s and 1960s, an era when, like many New England cities, the town seemed to be dying a slow death. I can still remember all the old, boarded-up factories with signs that read: 500,000 SQ. FT. TO LET. WILL REMODEL TO SUIT.

Even then there was money in Providence, but it was quiet money, held mainly by the handful of families that in those days controlled the city's most important institutions, such as Brown University and the Providence Journal. I didn't know anything about that money. On the contrary, the city I grew up in was deeply suspicious of money--or more precisely, it was suspicious of the activities that generated wealth in America. Entrepreneurs held no special status. Risk taking was for the harebrained. The stock market? Are you kidding?

Security, on the other hand, was highly valued--a job in the post office was considered a great thing because it was almost impossible to get fired there. And if you had to work in the private sector, you tried to find someplace with a good, strong union to look out for you. I've always suspected that Rhode Island took longer to get over the psychological effects of the Depression than just about anyplace else in the country.

In the 1980s there was a nice little economic boomlet in Rhode Island, but it faded quickly. Then, in the early 1990s, a credit-union scandal rocked the state, shaking people's faith in their financial institutions. As a result of that scandal, 45 banks and credit unions were temporarily shut down (ultimately about a dozen were shuttered permanently), and some 300,000 depositors--a third of the state's population!--had their accounts frozen. It took four years before all the depositors got their money back, and then only the principal. Not surprisingly, risk aversion was once again the order of the day; many people were worried about whether their money was safe in the bank, never mind the stock market. "People were very nervous about putting their money with us," recalls Lorna Rigney-Hodge, a Schwab executive who formerly managed the Providence office.

It was that history, though, that drew me here now. Could it be that even Rhode Islanders, with their long-standing dislike of financial risk--and their fairly recent credit-union crisis--had become part of the investing culture in America? You bet they had. And as I spent more time here, I began to see how the forces in American life--forces that go well beyond the booming bull itself--have led us to this point. Which is to say, I realized in a way I hadn't before that the rise of the individual investor is not some fad that will evaporate with the next bear market. This is one of the great cultural transformations of our lifetime.

I got my first inkling of how much attitudes in Providence had changed a few months before I hit town, when my mother sent me a clipping from the Providence Journal. It concerned one of my brothers, a teacher at the Rhode Island Training School, which is where kids convicted of crimes are sent to serve out their sentences. My brother had gotten some of the kids interested in a stock market game that the Journal sponsors; several of his students had won the thing. Naturally they did it by loading up on Internet stocks. I later discovered that my brother had been doing the same.

I got my second inkling shortly after I arrived in town, as I headed to the Capital Grille in downtown Providence. The Capital Grille is exactly the kind of restaurant that didn't exist when I was growing up: a power-lunch place. Though it's right in the center of town, it was surprisingly difficult to get to, largely because of all the construction going on around it. A big hotel complex was going up next door. Across the street stood the new mall--the unofficial symbol of the Providence revival--which was open, though far from finished. In a nearby park, NBC was putting finishing touches on the facilities for the Gravity Games--the network's answer to ESPN's X Games--to be held the following week. Looking at the construction and all the new buildings on the skyline, I was struck by the prosperity they suggested--a prosperity I had never associated with Providence.

Had the stock market played a role in this? Sure it had. For one thing, the bull market had created a job boom in financial services that affected places even like Rhode Island. Fidelity Investments, to cite one example among many, had opened up a 1,100-person center in nearby Smithfield, R.I.--and was preparing a major expansion of that facility. For another, people were freer with their money because of the bull market. Would Nordstrom have come into the new mall without the bull? Unlikely. But there was a less tangible effect as well. As Mayor Cianci put it when I spoke to him a few days later, "The market affects the spirit. It's a little like a sports team. When the team is doing well, everyone is happy. Everyone is confident."

When I finally arrived at the Capital Grille, the first thing I noticed was the news ticker on the wall: It was flashing up-to-the-minute reports on all the key market indexes. The next thing I noticed was the television above the bar: It was set to CNBC. Did people come in here to check on the market? I asked Steve Lydon, the bartender. "All the time," he laughed. As if to prove the point, a man walked in the door, plunked himself at the bar, and began poring over the business page. "Barry Sternlicht rang the bell at the stock exchange this morning," he said sardonically. "Market's probably going down."

Sternlicht is the CEO of the Starwood hotel chain, something the man at the bar was well aware of since he worked at the Westin Hotel in Providence. Westin is a Starwood brand, and though the man didn't actually work for Starwood--he worked for a company that has the management contract for the Providence hotel--he had Starwood stock in his portfolio. Back at his office, he had his portfolio of 20 to 30 stocks on his computer, where he could check on it during the day. He told me he made about a trade a week. Over the course of the next few weeks, I found lots of people like him: doctors and lawyers and professionals of every stripe who peeked at their portfolios--and traded stocks--in the middle of the workday. "It's the way of the world," the Westin guy shrugged.

Lydon, the bartender, preferred mutual funds, though he was planning on selling out soon; he was worried about the Y2K problem and wanted to be in cash when the millennium arrived. His own initiation into the stock market had come a few years ago when he bought stock in Bugaboo Creek Steak House, the company that owned the Capital Grille. In fact, he said, a number of Capital Grille employees had participated in Bugaboo Creek's 1994 IPO. He knew the whole story. The company had been put together by Ned Grace, a Rhode Island restaurant entrepreneur who had combined his two Capital Grilles (the second was in Boston) and his two Bugaboo Creeks--they were family-oriented steak houses--into a publicly traded company. (There are now 11 Capital Grilles and 18 Bugaboo Creeks.) Alas, the stock, which opened at $12 a share, never really went anywhere, and in the fall of 1996, Grace sold Bugaboo Creek for $57 million to a much larger restaurant chain, Rare Hospitality, whose stock was in the high teens.

In the spring of 1997, Rare stock tanked and continued to swoon for the next two years. "It got down to, like, 8 1/2," Lydon recalled. "It was pretty bad there for a while." He sold his stock--breaking even on it, he assured me--and had since lost track of the price. But talking about Rare made Lydon curious about how the stock was doing, so he pulled out a newspaper and found the listing. "Wow," he said. "Rare's up to $19. They got a new CEO. He must be turning things around." What happened to Ned Grace? I asked. "He moved to Florida," said Lydon. I later discovered that he had started an Internet incubator, a la CMGI.

Here, surely, was one of the crucial ways middle-class America had been drawn into the market: People owned the stock of the company they worked for. It wasn't just a West Coast phenomenon; it was happening everywhere--even here. And it wasn't just technology firms or companies that had recently gone public. All the big local companies--including Hasbro, Textron, and CVS--had stock-purchase plans for their employees. That caused an enormous change in the way people thought about their employer. Even for the lowest-level employee, the company was viewed through the prism of the stock. And if the company wasn't performing, well, the employee was as likely to dump the stock as any Wall Street portfolio manager.

As I talked to more investors, it gradually dawned on me that equity was becoming almost as important as--and in many cases, more important than--salary. Again, this is taken for granted in Silicon Valley. But in Rhode Island it signaled a huge shift in the way people thought. Jill Schlesinger and David Brochu, two financial planners who also have a radio talk show dealing with personal finance, told me about two people they'd hired to run their Website. "They were much more interested in equity than in salary," said Schlesinger.

In Silicon Valley, of course, equity usually means stock options. In Rhode Island you still don't find all that many people with options, though there are certainly more than there used to be. But you find lots of people who have accumulated equity stakes through retirement plans. The 401(k) plan, in fact, may be the single most important factor in the rise of the individual investor. It has forced people to learn about the market, allowed them to watch their assets grow, and made them realize what the stock market can do for them.

The person who made the deepest impression on me in this regard was David Civetti, a 36-year-old owner of a small commercial cleaning business. I met him at the office of his financial planner, a sleek, ponytailed 29-year-old named Ramesh Gulati, who had only recently hung up his shingle after five years with American Express. Gulati's minimum was $100,000, and at first glance Civetti, who was wearing his work clothes, didn't look like someone who had a spare hundred grand to hand over to an adviser. But you can't judge a man's portfolio by the clothes on his back or by his profession. Not anymore.

Here was Civetti's story. In 1981, when he was 19 years old, he went to work for the local Coca-Cola bottling plant. He eventually rose to the position of district sales manager, but his salary never got above $40,000. All the while, though, he had been putting his 401(k) contributions into Coke stock, and those contributions were matched by his employer. And of course we all know what Coke did in the 1980s and early 1990s--it rose spectacularly. At the bottling plant, Civetti said, everyone kept close track of how the stock was doing. "People would say, 'It's up $2 today!'" he recalled. "We all had a vested interest in Coke's performance," he added.

By 1995, when Civetti was 33, he had accumulated a nest egg of more than $300,000. You didn't have to explain to Civetti the importance of investing for the long term; he'd experienced it first-hand. But that money also meant that he was not as tied to his salary as he otherwise would have been. It gave him a degree of freedom that had been unheard-of for someone of his age, doing his kind of job.

Civetti quit the Coke plant and borrowed against his 401(k) to start his own company--something he'd always wanted to do. His commercial cleaning business was doing well, he said, its sales rising from $1 million to $3 million over the past few years. And though a recent divorce had cut his 401(k) nest egg in half, he professed not to be worried. "I've got 30 years to build it up again," he said.

As he was winding down his story, I asked him about the other employees at the bottling plant. Had they done as well as he had? Most of the old-timers, he said, had done even better. "A lot of guys were making more from their Coke stock than from their salaries," he said. "Just about everyone who retires from the plant has $1 million in Coke stock," he added matter-of-factly.

Somewhat to my surprise, certified financial planners like Civetti's guy, Ramesh Gulati, were everywhere in Rhode Island. So were brokers: Merrill Lynch, American Express, Paine Webber, Legg Mason, Morgan Stanley Dean Witter--just about every brand name in the business had a presence here. Most of them have anywhere from $500 million to $1 billion in assets under management in their Providence offices. The oldest independent brokerage house in the state, a small firm called Barrett & Co., has seen its assets double in the past three years, to $300 million--this despite its emphasis on small-cap stocks, which have not done well during this phase of the bull market.

Reading the financial press, with its emphasis on the growth in online trading by individual investors, one gets the impression that brokers and other financial advice givers are going the way of the dodo bird. But when you take a close look in a place like Providence, you realize that's not what's happening. Yes, online trading has become a force--I found plenty of people who had become active investors because of it--but the tremendous rise in investor interest and money means that there is plenty of business for everybody.

Still, there isn't much doubt that the constellations are shifting and that the brokerage business is shifting right along with them. I didn't speak to a single broker who admitted to making cold calls, for instance. It's viewed as unseemly. I also couldn't help noticing that just about every broker and financial planner I interviewed relied on such Internet sites as Yahoo for stock information--which they then passed along to their customers. And nearly all the brokers I spoke to had either moved to a fee-based compensation system or were hoping to move in that direction soon. Investors clearly have learned to distrust brokers who make their money on commissions. All the financial planners I interviewed boasted of their fee-based compensation and viewed it as part of the edge they had over the old-fashioned brokers.

There is another change. "In the old days you'd take ideas to your clients," one broker told me. "Now they bring their ideas to you." People know a lot more about stocks, and they like to talk about them. "My attorney will stick his head in here practically every day to talk about the market," said Wilson Saville II, a vice president at Barrett & Co. "When I go to a kid's soccer game, people will start asking me about various stocks." Ramesh Gulati agreed. "Just this past weekend," he said, "I was at a party in Newport. It's like 2 A.M., and this woman I've been talking to starts asking me whether she should have a Roth IRA. Two in the morning! I couldn't believe it."

The crux of the matter, I wound up thinking, was that relationships still matter, despite the online revolution. Many people--not everybody, but more people than you'd think--still want someone they can talk to about their money, someone they can trust.

One company that clearly understands this need is Charles Schwab, which is trying to meld the two strands of modern investing--the old desire for relationships and the new do-it-yourself reflex brought about by the Internet. On the one hand, the company is working hard to shift its client base to the Web--some 70% of Schwab customers now trade through the Schwab Website instead of on the telephone. On the other hand, it still puts great emphasis on its bricks-and-mortar branch network. Why? "This whole office is about relationship building," said Ned Power, the Providence office manager. A graduate of Providence College, Power, 33, has been in charge of this office for two years and has overseen some of its most explosive growth. He is now about to oversee a Schwab expansion into Newport, R.I.--one of 50 or so new offices the company will open this year. He holds seminars, one-on-ones, weekly Web tutorials. He sees his job as being in touch with his customers, which will generate trust, which will generate assets. "Our clients are still looking for advice and help," Power said. And he's right.

Here was another surprise. It turns out that an online broker is headquartered in Rhode Island. Called Suretrade.com and located in the Providence suburb of Lincoln, it is a division of Schwab's discount rival Quick & Reilly--itself a subsidiary of Fleet, which bought the discounter for $1.6 billion in February 1998. Then again, maybe it shouldn't have been such a surprise. When I was growing up, Fleet--then known as Industrial National Bank--was a local institution whose reach and ambition did not extend beyond the Rhode Island borders. But in 1982, Terrence Murray was named CEO, and Fleet became one of the most expansion-minded banks in the country. In recent years especially, it has been a voracious acquirer of other banks and has become a giant East Coast institution, with $107 billion in customer assets.

Seeing the rise of the individual investor--and realizing its potentially dire consequences for banks--Fleet decided it needed to get into the game. Hence its acquisition of Quick & Reilly, the nation's third-largest discounter. During the deal's negotiations, Fleet discovered that Quick & Reilly was preparing to unveil an online brokerage--the discounter's response to the potential threat posed by the likes of E*Trade and Ameritrade. Thus did Fleet enter the online brokerage derby. Since opening for business in November 1997, Suretrade has attracted 350,000 customers and nearly $2 billion in assets. It's a success--it's even in the black, a Fleet spokesman said--but a modest success compared with E*Trade, which has $26 billion in assets. Fleet is planning to launch a marketing campaign for Suretrade that could cost as much as $100 million.

Donato Montanaro, 33, who runs Suretrade for Fleet, was one of the more excitable executives I've ever met. Though he had CNBC on in his office, I couldn't make out Ron Insana's voice because it was overwhelmed by the Jimi Hendrix CD blaring from the stereo. Montanaro turned down the music and began giving me his song and dance. "I love the market!" he exclaimed. "I don't believe the market should just be for rich people. Our mission is to level the playing field. I feel good about what we're doing." Of course nobody in America believes anymore that the markets are just for rich people. But never mind; his enthusiasm was infectious. Suretrade, he said, had been rated the No. 2 online broker for beginners--"We're very proud of that"--and No. 1 for "aggressive investors." When I asked if "aggressive investors" was a euphemism for day traders, he shot me a pained look. "That's not what we're about," he said. I didn't push the point.

Montanaro was a believer in the Peter Lynch school of investing. "I told my dad, who's in the pharmaceuticals business, to start following what's going on in that business and start capitalizing on that knowledge. He's 57 years old, a new investor. Last year he had a 400% annualized return!" He thought individual investors got a bad rap in the press, which kept expecting them to panic every time there was a downturn. "The self-directed investor is more aware of the possibility of a real downturn than he is given credit for," he said. "He'll either ride it out or see it as a buying opportunity." And he was convinced that the "self-directed investor" wasn't about to fade away. "This is real!" he practically shouted. "And as the Internet gets into more homes, it's only going to grow." Suddenly he got a glint in his eye. "It's an amazing time to be in the investing business," he said.

Eventually Montanaro took me out onto the big, open floor where most of Suretrade's employees work. The market was having a huge day--up more than 200 points late on a Friday afternoon--and the place was buzzing with excitement. Most of the employees were young--the average age of a Suretrade employee is 28--and as I began talking to them, I realized that most of them had known almost nothing about the market before they got their jobs here. Now they were hooked; just about everyone I spoke to said he traded for his own account. There were probably 150 people in the room--part of the financial services industry, yes, but also part of the new investing culture.

One by one Montanaro pulled employees aside and gave them a thunderous slap on the back. Pointing at me, he said, "Tell him your story!" I met Marty Loiselle, a retired schoolteacher who was now in the Suretrade compliance department and traded stocks himself. I met Rebecca Gardner, a 22-year-old graduate of Providence College whose finance professor hadn't taught online investing because he didn't believe in it. She rolled her eyes.

We moved to another part of the room. "Hey, Lobsterboy," yelled Montanaro. "Come over here!" I soon found myself shaking hands with 23-year-old Michael Moffitt. Montanaro called him Lobsterboy because after he had gotten out of college he had gone to work for a Rhode Island lobsterman. "My boss asked me what I was doing with my money," Moffitt said. "He told me that someone my age should begin investing now. That's what got me interested in the market." And now Moffitt was here--working for Suretrade! When Moffitt returned to his cubicle, Montanaro explained that the young man worked with a group called the "top-gun team"--people who were assigned to handle the accounts of Suretrade's most profitable customers and make sure those customers were happy with their Suretrade experience.

The Suretrade atmosphere was crazed. People ran from one end of the hall to the other, carrying slips of paper. Every once in a while Montanaro would interrupt our conversation and shout out, "Who's got that?" Although it looked like a trading room, it wasn't really. All the hustle and bustle revolved less around executing trades than around answering customer phone calls quickly.

"In the end," said Montanaro, "it all comes back to service." Even at Suretrade, a hard-core online broker, it's all about building relationships.

Lobsterboy's story was no exaggeration: He had indeed been introduced to the stock market by a Rhode Island lobsterman named Richard Cook. When I spoke to Cook a few days after visiting Suretrade, he confirmed all the particulars. "I told him that he needed to start investing now, putting aside $50 or $100 a month while he's still young," he said. "I'm 42, and I started in my 30s. I wish I'd got into it when I was his age."

Cook is one of those people who had gone from having a full-service broker to being a do-it-yourselfer. He had dropped his broker largely because of the ads on CNBC for online brokers; the difference in commission costs was too big to ignore. At one point he tried some quick trades for fast profits, but that mainly taught him, as he put it, that "long-term positions are better, for me at least." He prefers large caps to small caps, for he learned over the years "that when you try to sell a small stock, you can get killed." He has about $25,000 in the market, but he's been selling off some of his position "because of Y2K." AOL and Merck are among his favorites.

Cook loves CNBC; on days when he isn't lobstering, he watches for three or four hours at a stretch. He and his friends all talk about the market. They compare the stocks they're buying and their reasons behind those purchases. They are keenly aware of where Alan Greenspan stands on interest rates. "You'd be surprised," he said, "how many guys you see in lobster boats reading the stock pages in the newspaper."

Cook spoke with a sense of urgency that startled me, especially when he talked about his advice to Lobsterboy. But I quickly realized that for him, as for so many other modern investors, the market is no lark--it's serious business. He isn't using "play money" the way so many people did when this bull market began; he's using money that is meaningful to his life. That is one of the things that happened during this long bull market without anybody's really noticing: The stakes rose considerably for investors as the market became more central to their lives.

Cook also seemed to illustrate another point about individual investors: They really are educating themselves--and each other--about the market. It's like a giant national teach-in. CNBC is one tool people have come to rely on in the past few years; so are all the stock-research sites on the Internet. But the learning process is also going on in neighborhoods, in people's homes, in offices--even on lobster boats. The upshot is that everybody now has an opinion about Internet stocks, and Y2K, and where interest rates are headed. Everyone in America has become an analyst.

The person I met who best exemplified the investor-as-analyst was not Cook but a man named Ron DiIorio, who runs a little one-man graphics shop in a Providence neighborhood that the city's revival has not yet touched. His office consists of one large room in the back of a costume-jewelry wholesaler owned by his father. His brother and uncle both work in the jewelry portion of the storefront building, as does his wife, Karla. All are investors. Indeed, Karla has her own online account with Accutrade. But none devotes the time and effort to it that DiIorio does.

DiIorio, 35, showed me his setup. In a corner of his shop, he had a computer hooked up to an @Home cable modem. The default page was set to his customized version of Silicon Investor, a well-known Website with chat rooms devoted to just about every tech stock under the sun. "Silicon Investor," he said, "is the best forum by far. You can find people with incredible knowledge, and you can interview them and interact with them."

Next to the computer was a television set, but it was off. And in any case, DiIorio told me, he didn't use it nearly as much as the computer, his essential investing tool. He had accounts with three online brokers--Datek, Ameritrade, and E*Trade. He had an AOL account because he liked the way AOL's portfolios were set up. He had dozens of different links to financial sites, each one chosen for a specific purpose. "It's taken me a long time to get all of this pulled together," he said. I didn't doubt him.

It was hard not to be impressed with his diligence. He put in a couple of hours each evening doing research online, mostly by scrolling through Silicon Investor. He had been a Silicon Investor participant long enough, he said, to have a good feel for who knew what he was talking about and who didn't. He kept particular track of certain screen names because they seemed to have such a wealth of information and such keen analysis. "See this guy?" he said, pointing to the screen name "Ahhaha." "This guy is great." It suddenly dawned on me: Even a guy alone in an office, like DiIorio, had relationships he trusted when it came to his investments. They just happened to be people he knew only through their screen names.

Another thing DiIorio had was discipline. He showed me a list of stocks he was keeping track of: In each case there was the current price, and next to it the price he would buy it at, which was usually considerably lower. Every few weeks he would reevaluate to see whether his buy prices still made sense. "I never, ever chase a stock," he said. "If it gets too rich, I just let it go."

He showed me a list of stocks he was following. They included @Home--"One of my favorites," he said. "I'm a big believer in broadband"--Rambus, the chipmaker; and a local company called American Power Conversion (everybody in Rhode Island seemed to be following American Power Conversion: It was the state's hot stock). There was also a company on his list that wasn't yet publicly traded. It was called Silkroad. He'd gotten interested in it after "Ahhaha" had mentioned it in one of his chat-board missives.

But when I asked DiIorio which stocks he had right now, he gave me a sheepish look. "Actually," he said, "all of my money is tied up right now in one stock." Through a friend of a friend he, his wife, and several other members of his family had been able to get hold of some shares of a recent IPO for a local Internet company called Log On America. I couldn't resist the thought: Even Providence had caught the IPO bug. By now I knew full well that my hometown was as caught up in the stock market as every other city in America. But there was something about this IPO--a hot Internet IPO! Right here in Rhode Island!--that pounded the point home once and for all. The founder of Log On America, David Paolo, holds about 35% of the stock; you will not be surprised to hear that he had CNBC on when I met him. "A nice, positive opening," he told me, glancing at the Log On America share price, which flashed on his computer. "My job here is to increase shareholder value," he said, adding that this was in his best interest since, after all, he was the largest shareholder. "To be 31 years old and worth $50 million," he mused, "that's not such a bad thing."

For DiIorio, however, the Log On America IPO had turned out to be a mixed blessing. Because he'd gotten restricted shares--stock that was not part of the public float--he couldn't sell the stock. To be sure, the stock stood at a little more than $19 a share, nearly twice the IPO price of $10. But last April, when the IPO took place, the stock had gotten as high as $37 a share. It had been slowly declining ever since. DiIorio was worried that the stock would drop further before he'd have a chance to sell his shares. He was frustrated that he couldn't do anything. Grabbing at the IPO--which these days is the Holy Grail for the small investor--had taught him another lesson about the market that he wasn't likely to forget anytime soon.

On my last night in Providence, I sat in on a meeting of a women's investment club. It was held in a pleasant, airy house in one of the city's best neighborhoods. It was a new club, only about four months old, consisting of 11 women, all novice investors, at least in the do-it-yourself sense. (Several of them invested with full-service brokers.) They called themselves the Enterprise Club. Earlier that day one of the women had set up the club's account with Suretrade and made its first stock purchase. The Enterprise Club had bought 20 shares of Jones Pharma, a specialty pharmaceuticals company.

"Our objective here is to double our money in five years," said club president Cindy Donadio. "That means we're looking for stocks that can generate 15% annual growth rates." This, it turns out, is the goal suggested by the National Association of Investment Clubs; these women were trying to invest the way the NAIC suggests. They had NAIC books and worksheets, and they had done their homework for this meeting.

On this night they were discussing financial services companies--a sector they had chosen, as one woman put it, "because of the baby boom and the need to save for retirement." It surprised me at first that they were focusing mainly on full-service brokerage houses like Legg Mason and Paine Webber, but as I heard them discuss these companies, I realized they had seen the same thing I had. People still wanted advice and were willing to pay for it.

Five women at the meeting gave presentations about companies they had been assigned to research. From my perspective the work they had done was heroic. The NAIC worksheet calls for up to ten years' worth of detailed financial data, and putting that together is no easy task. One woman had noticed that Paine Webber stock had taken a big hit in 1994; when she realized she didn't understand why that had happened, she called the investor-relations person at the company and asked pointed questions.

Sometimes the women said things that showed they still had a lot to learn--but that was fine. That's why they were here. The back-and-forth was illuminating, and you could see the learning process taking place. By the end of the evening they had decided to buy 20 shares of T. Rowe Price because the earnings projections they had arrived at suggested that that stock had the best chance of meeting their 15% annual growth target. Having watched them arrive at this decision, I couldn't disagree.

This is what investing has become in America: do-it-yourself, yes, but with the help of like-minded friends. Cautious rather than reckless. The individual investor is rolling up his--or her--sleeves and putting in the hard work it takes to make money in the market. Day traders get most of the publicity, but this picture--11 women teaching themselves how to invest--is far closer to the truth about investing in America. Well, most of the time anyway.

As the meeting was breaking up, a woman named Stacy Paterno, who owned this house and was clearly one of the more knowledgeable investors in the room, piped up. "By the way, there are going to be three big IPOs this week," she said, ticking them off. She herself was intrigued by PurchasePro.com because it had a "business to business" model. "They'll have a lot less in marketing costs and a lot more potential profitability," she said.

"I'm not suggesting this for the club," she quickly added. "Just in case any of you are interested on your own."