Oct. 25 (Bloomberg) -- October holds a reputation in the stock market as a month of violent declines.

In October 1987 history repeated itself. The S&P 500 collapsed 22 percent that month.

Other Octobers were also bad. The S&P declined 8.9 percent in October 1930, 14 percent in October 1932, 10 percent in October 1937, and 9.2 percent in October 1978.

On average, October isn't the worst month; September is. However, the history of violent declines in October is too dramatic to ignore. That's why most years, investors walk on eggs during Halloween month.

This month through yesterday, the S&P is down 2.3 percent including dividends, unpleasant but not dire. In the month's first 16 trading sessions, stocks declined in 10 and rose in six.

And yet, certain stocks have had their own private crashes.

Among the 2,399 U.S.-traded stocks with a market value of $500 million or more, 58 have fallen 20 percent or more through Oct. 21.

As a whole, the energy sector within the S&P 500 had fallen almost 14 percent through Oct. 21. On Oct. 19, the Energy Department reported an unexpected increase in U.S. inventories of gasoline.

That was the psychological spark for selling in a group that had experienced a tremendous run. Since the end of 2003, the energy sector of the S&P had risen 61 percent, while the S&P as a whole had risen 9.5 percent.

Will energy stocks pass the leadership baton to other groups? I know many intelligent people who think so. If they are talking about the next three to nine months, I have no real quarrel.

Looking ahead three to five years, I believe that investors who stick with energy will be glad. Remember that old saying about land, ``they ain't making any more of the stuff.'' It seems to me that's equally true of oil, gas and coal.

I prefer oil to coal, because it seems to me that oil stocks are cheaper. And I prefer natural gas to both, because I believe the U.S. has a shortage, and natural gas is expensive to ship to the U.S. from other parts of the world.

Among the S&P's 139 industry groups, 36 have risen in the month through Oct. 21, and 103 have fallen.

Airlines have done best, up 7.1 percent as energy prices eased. Jet fuel is made from oil, and fuel is one of the largest costs for airlines, running 33 percent or more of total costs at some carriers.

Continental Airlines Inc. (CAL), the fifth-largest U.S. carrier, has done especially well, up 23 percent. The Houston- based company posted a third-quarter profit of $61 million as it raised fares to compensate for higher fuel prices.

RealNetworks Inc. (RNWK) has risen 44 percent this month. The Seattle-based company sells songs and music software over the Internet. On Oct. 11 it reached a settlement with Microsoft Corp. (MSFT) and will be paid $750 million.

Guess? Inc. (GES), the Los Angeles-based company that makes Guess jeans, is up 23 percent based on a sales surge in September.

The big up-and-down moves by individual companies are a reminder that what matters most in investing isn't how the stock market does. It's how your individual stocks do.

As for the chance of a crash in the last few trading days of October, I think they are remote. A crash is usually a ``selling climax,'' the culmination of days or weeks in which investors first turn more pessimistic, then -- as prices decline -- finally panic.

In 1929, declines of 3.2 percent to 5.9 percent occurred on three of the five days preceding the crash. In 1987, declines of 2.3 percent to 5.2 percent occurred on three consecutive days before the crash.

The absence of a crash shouldn't be interpreted as an ``all clear'' signal. The Dow Jones Industrial Average, which stands at 10,385, hasn't closed below 10,000 this year. I wouldn't be surprised to see the Dow touch the totemic 10,000 line this year, as it has for six years running from 1999 through 2004.

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