Q: What is the greatest danger to a large-cap value portfolio like that? What would you hate to see in 2003?

A: My biggest fear is the housing market. There has been a lot of easy money in housing and housing turning down would be a major detriment overall. Japan has 11 straight years where housing has been declining. If someone’s house goes down in value, it really cuts down spending. I would say the general level of indebtedness, if that leads to a downturn in housing, could have a huge ripple effect. If the money is really easy, you have to run away. All these bubbles have occurred because of too much easy money. A lot of people buy houses for the wrong reasons. But that’s a general macro worry.

Q: If that happens, what will be the mechanism by which large caps will be affected?

A: Again, it’s hard to generalize but you have to look at each company and at their pensions, if they have a deficit or surplus, and you have to break it down. There are sectors that look really good in the large cap. There are so many different situations and companies that are at 10-year lows versus o