INDEX:

I. Market News: Record Number 69 For DJIA
II. Heroes: Waters, Cadence, BayBanks, Datastream, Bausch & Lomb
III. Goats: Cin. Micro, Nokia, Int'l Flavors, EqualNet, Amer. Freight
IV. Investment Perspective: Toward a More Foolish Community
V. Calendar: Thursday's Economic Events

MARKET CLOSE

DJIA: 5216.47, up 41.55 (RECORD)
S&P 500: 621.33, up 2.55 (RECORD)
NASDAQ: 1055.72, up 3.65

MARKET NEWS

On very heavy volume, apparently in anticipation of Friday's "Triple Witching" expiration, Blue Chip stocks piled on another new record today. Fools aren't much concerned about options, so today's action is nothing more than a short-term blip for a long-term investor, but this is the kind of year a Beating the Dow investor dreams about. If you aren't familiar with the strategy yet, visit our Dow Area in the Fool's School. Beating the Dow---the bedrock and benchmark for all Foolish portfolios.

HEROES

Hot on the heels of an upgrade of its debt by Standard & Poors, Alex. Brown placed Waters Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:WAT)") else Response.Write("(NYSE:WAT)") end if %> on its "strong buy" list, pushing the shares up $1 1/8 to close at $16 1/4. Waters Corp. is the leading provider of HPLC instruments which are used in a myriad of industries to separate compounds where large volumes are involved. Although the industry has matured, the company is generating stable cash flow as its profit margin has increased to from 11% to 20% because of restructuring.

Cadence Design <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:CDN)") else Response.Write("(NYSE:CDN)") end if %> leapt ahead $2 to close at $38 5/8 the day after it torpedoed the shares of its competitor, Avant! <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:AVNT)") else Response.Write("(NASDAQ:AVNT)") end if %>. Cadence announced a much-publicized lawsuit over the alleged theft of some "code," software lingo for a small part of a program. With a long-term growth rate of 17.7% and 24% growth estimated for next year, shares of Cadence appear a little expensive. The perception is that if Cadence can hurt Avant! it can maintain its dominance in the semiconductor design software industry, a small field where the only real competition comes from Actel Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:ACTL)") else Response.Write("(NASDAQ:ACTL)") end if %>, Epic Design <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:EPIC)") else Response.Write("(NASDAQ:EPIC)") end if %>, IKOS Systems <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:IKOS)") else Response.Write("(NASDAQ:IKOS)") end if %> and Synopys <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:SNPS)") else Response.Write("(NASDAQ:SNPS)") end if %>. Avant! closed up $1/8 to $17 1/8 after yesterday's implosion.

Sue us for not first mentioning the high-profile merger between Bank of Boston <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:BKB)") else Response.Write("(NYSE:BKB)") end if %> and BayBanks <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:BBNK)") else Response.Write("(NYSE:BBNK)") end if %>. Sure, it involved a cool $2 billion in stock, but with Bank of Boston closing down 3.8% at $43 5/8 and BayBanks only popping up 8.8% to $92 1/2, there were bigger moves out there today. Bank of Boston reported to analysts today that its 1997 net would be 5-6% higher as a result of the massive merger of the two New England powerhouse banks. Prudential raised its rating on Bank of Boston shortly after the analyst conference. The deal went through at 2.2 times BayBank's book value---a little pricey, perhaps, but not extremely so considering some other deals that have been completed in recent weeks. Bank of Boston will take a fourth-quarter charge and issue 2.2 shares of its stock for every share of its cross-town rival. The price has not quite reached the $96 buyout level since approval by state and federal regulators is still necessary for the deal to go through.

Datastream <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:DSTM)") else Response.Write("(NASDAQ:DSTM)") end if %> boosted its shares by $2 3/4, pushing the share price up to $18 3/4, by putting out a press release that bluntly stated, "The fundamental business is fine." Simply running through the numbers, the company highlighted its solid growth, with revenues in November up 124% over the previous year. Datastream makes software for maintenance and facility management with a 42% market share. In unrelated software news, VMARK <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:VMRK)") else Response.Write("(NASDAQ:VMRK)") end if %> shares rose $1 to $7 after it announced its new Star Office product. VMARK has been hit hard recently over lousy third-quarter profits and a baleful projection for the fourth quarter as well.

Shares of Bausch & Lomb <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:BOL)") else Response.Write("(NYSE:BOL)") end if %> benefited today, rising $2 5/8 to $39 3/4 on brisk volume when CEO Daniel Gill announced that he is going to retire. Gill will depart on December 31st and the Street could barely contain its jubilation. Shareholder discontent is perceived as the key reason for Gill's departure, and institutions are pressuring the Board of Directors do to "something" about the recent lackluster results. Gill's announcement came right after the Board meeting on Tuesday. Investors hope that without Gill the contact lens giant can regain lost market share and reclaim its historic growth rate.

GOATS

A similar CEO resignation did nothing to help the shares of Cincinnati Microwave <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:CNMW)") else Response.Write("(NASDAQ:CNMW)") end if %>, which fell $1 9/16 to $4 7/16 after the company "revised" fourth-quarter estimates downward. Ouch. The company expects a loss now when previously it thought it could make a profit. Cost overruns in cordless telephones and softness in the radar detector market have sealed its doom. Hard to believe the shares were above $20 in the last year. Quaker Chemical <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:QCHM)") else Response.Write("(NASDAQ:QCHM)") end if %> was another stocks struck by lowered expectations, knocking the shares down $3 3/8 to $12 1/8.

More concern over the maturing cellular phone market in North America hit the big names in the industry. Nokia <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:NOK\A)") else Response.Write("(NYSE:NOK\A)") end if %> was hit the worst, losing $4 1/8 to close at $46 1/4. The Finnish telecommunications giant stated today that it would require "several thousand" new staff in 1996, suggesting that overhead costs were going to be higher. Dean Witter slammed Motorola <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:MOT)") else Response.Write("(NYSE:MOT)") end if %>, removing the semiconductor/cellular phone monster from its focus list, inciting a sell-off that took the stock down $1 3/8 to $60. The cellular phone concern Ericsson <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:ERICY)") else Response.Write("(NASDAQ:ERICY)") end if %> lost $7/8 to "finnish" at $20 3/4. Yeah, it's Swedish, but give us a point for trying!

International Flavors & Fragrances <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:IFF)") else Response.Write("(NYSE:IFF)") end if %> reported to beleaguered investors today that lower-than-expected fragrance sales will cause 1995 earnings to grow only 10% or 11% above 1994's level. The Street thought the news stunk and the stock lost $3 to close at $51 1/2 as a result. The company told the Street to expect fourth-quarter earnings in the $0.35- to $0.37-a-share range instead of the $0.42 that had been previously forecast. The first half of 1996 is not anticipated to be much better, as the slow retail demand on top of "strong" comparisons will make life difficult for International Flavors. International Flavors is a global fragrance and flavor company, creating scents and tastes found in thousands of consumer products.

EqualNet's <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:ENET)") else Response.Write("(NASDAQ:ENET)") end if %> was halted today so the company could report to investors that the second quarter was going to be. . . you guessed it. . . lower than expected. The shares lost a whopping $8 1/2 to close at $9 3/4. The problems are delays in activation of new customers and the inability to deal with the problem. As a result, investors were told to expect earnings of $0.04 a share instead of the $0.20 analysts had been looking for. CEO Zane Russell added to the bad news that EqualNet has had a "record number of orders for our service," which does not help if they cannot meet demand. EqualNet is a nationwide long distance company that offers discounted phone service to small and medium sized businesses.

American Freightways <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:AFWY)") else Response.Write("(NASDAQ:AFWY)") end if %> upped its rates and killed its stock today, with the shares trading $1 11/16 lower to $10 13/16. The company will lose $0.10 to $0.12 a share in the fourth quarter, in spite of the hiked rates, because of lower shipments. The company blames flagging consumer demand on the heels of a strong 1994, which caused all of the capacity that it added to sit idle for a year. With constant operational costs per shipment, smaller shipments have also led to lower profits. The company originally thought it would make $0.06 to $0.10 a share in the fourth quarter. Fat chance.

INVESTING PERSPECTIVE: Ad Hominem Attacks Just Ain't Foolish

Continued antipathy towards SoundView Financial analyst Rick Whittington out on the message boards makes him an easy favorite for "Most Hated Wall Street Denizen of the Year," although Fidelity Magellan manager Jeff Vinik has garnered quite a few votes as well recently. Almost daily attacks, retorts, polemics and assorted negative comments fill the message boards of most technology-related stocks on the message boards, casting a black pall across what otherwise is the brightest investment resource in cyberspace.

Readers at this point should take heart and know that this is not another rambling attempt to bash these two gentleman or even some imagined score; rather, it is a cry for some constancy and decency out on the stock boards. I wrote an article a few weeks back on what an analyst is and why he or she makes changes in their ratings. A lot of comments, some from Fools and some from non-Fools, have been directed at whether or not analysts cut ratings because they somehow "know" the stock will go down, thus allowing their firm to buy shares at a discount---talking the stock down and then buying it on the cheap. The opposite common critique, talking a stock up while selling it is what Jeff Vinik has been accused of recently. I maintain that both of these fail to deal with the complex and ever-changing world of investing.

It is common to see a comment along the lines of "that darned analyst, he downgraded *my* stock. Where does he get off?" This gut reaction, which is common whenever someone disagrees with our own opinion, too often turns into rambling vitriol that invariably fails to say anything about the company, its financial outlook, the industry it operates in and what challenges its management might currently be facing.

The spirit of the Fool is both a serious and a light one, open to other opinions. Rather than reacting with venom when an analyst disagrees or hypothesizing how the analyst's firm might be making money by "playing" the flip-side of his or her comments, trying to find out "why" the analyst said what he did and what his rating system "really" means might be more helpful. Analysts typically downgrade stocks when the next 6-12 months look like rough sledding, in spite of the fact that companies deal with much longer time horizons. The reason why they do this is the institutional and retail demand for immediate results, not great performance over the next year, five years, twenty years. Understanding that the time frame may be completely different between us and the Street, for instance, might explain why the Street is making negative comments about a stock that we like a lot.

Please, let's all be Foolish and restrained on the boards. As in any debate, no one says you have to agree with everything you read, but a lot more analysis and far fewer personal attacks will go a long way toward making the individual investors who comprise this forum look like thoughtful and informative correspondents and not just a pack of reactionary and irrelevant market participants. The world watches these boards; let's try to raise the bar rather than sink in a miasma of accusations and attacks.

CALENDAR: Thursday's Economic Events

---Initial Unemployment Claims (8:30)
---November Consumer Price Index (8:30)
---November Industrial Production (9:15)
---November Capacity Utilization (9:15)
---November Real Earnings (10:00)
---November Atlanta Federal Reserve Bank Economic Survey (10:00)
---October Business Inventories (10:00)
---Weekly Money Supply Statistics (4:30)

Don't forget to play the FoolBowl Blowout before the college bowl season kicks off tomorrow evening.

Byline: Randy Befumo (MF Templar)