SHORT INTERESTS: TIPS, TRENDS, OBSERVATIONS

Tricks of the trader

Day traders, grab a notebook. Digital University, a Newport Beach, Calif., start-up that provides courses online, will soon launch a class on the fundamentals of the online trading industry providing “sound money management rules,” according to its course description.

Digital University isn’t accredited, nor does its instructor, David Janti, have a teaching degree. Digital U. founder Victor Vega says the $117 cost of the course — an hour a week for four weeks — is “a small investment to make considering that these people invest thousands online.”

Mark Cortazzo of Macro Consulting Group in Denville, N.J., holds another view. “An online school for day traders? That’s almost crazier than day trading,” the financial adviser says.

Cap gap widest since ’70s

Small-company stocks trailed big-company stocks in the last five years by a greater margin than at any time since 1969-73, according to the Salomon Smith Barney Inc. unit of Citigroup.

The gap is widest on either end of the spectrum. Last year, stocks with a market capitalization of more than $20 billion gained 26% while those below $250 million lost 24%.

But the good news is that in the five years after each of the 10 worst underperforming periods on record, small-caps surpassed large caps — by no less than 25 percentage points a year.

Steep climb for fund vet

Becoming a brewer of tea is “not a typical career move” for a mutual fund executive, admits Seth Goldman, the “TeaEO” and co-founder of Honest Tea Inc. in Bethesda, Md.

Until January he headed marketing at another Bethesda firm — socially conscious Calvert Funds.

He had been searching in vain for a not-too-sweet, “natural drink without a lot of junk in it,” InvestmentNews sister publication Pensions & Investments reports. Both he his Yale business school professor, Barry Nalebuff, found the empty market niche intriguing.

They teamed up to found Honest Tea in February 1998. Friends and family invested the initial $500,000 and Mr. Goldman’s kitchen soon became filled with tea brewing paraphernalia. Mr. Goldman landed his first big sale — a $15,000 order — by walking into the Rockville, Md., regional office of the Whole Foods Market chain with containers of his tea. The firm, now distributing mainly through natural food stores as well as the supermarket chain, has opened a West Coast production facility and is raising $1 million to finance national production and distribution.

Its newest recipe, First Nation, is produced with I’tchik Herbs, a company owned by women and based on a Crow reservation in Montana.