DJIA            9110.20   +97.90      (+1.09%) 
 S&P 500         1115.75    +6.06      (+0.55%) 
 Nasdaq          1843.01   +18.06      (+0.99%) 
 Value Line ndx   988.66    +9.24      (+0.94%) 
 30-Year Bond   103 4/32   +11/32  5.90% Yield 
 

HEROES

Eastman Kodak <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: EK)") else Response.Write("(NYSE: EK)") end if %> captured a $3 13/16 gain to $70 13/16 after reporting Q1 earnings of $0.69 per share versus $0.80 (before charges -- EPS after charges was $0.44) a year ago, meeting analysts' expectations. Of course, analysts' expectations weren't exactly high after the company warned analysts in February that the strong dollar and advertising spending for the Winter Olympics would cut EPS by $0.20. Although the company has made some progress in its recovery plan, it lost more market share to archrival Fuji Photo Film Co. during the first quarter -- worldwide consumer film sales fell 14%, while U.S. sales dropped 18%. Its digital imaging business lost $55 million, though that is less than the $130 million it lost in the fourth quarter. To its credit, the company has cut nearly 7% of its workforce in one quarter and is reducing losses. The majority of its commercial imaging businesses reported improved earnings from operations. However, as Kodak Chairman and CEO George Fisher said in the company's press release today, "Clearly, we have a long way to go."

Paper companies soared today on earnings reports, ratings upgrades, and predictions that pulp inventories are below seasonal averages. Pulp inventories in North America and Scandinavia dropped up to 300,000 tons in March from the month before, a Swedish newswire reported based on preliminary numbers. That compares with an average decline of 90,000 tons in the past decade. Meanwhile, International Paper <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: IP)") else Response.Write("(NYSE: IP)") end if %> gained $3 3/8 to $54 3/8 as it reported Q1 earnings of $0.38 a share (before extraordinary items), compared with the First Call mean estimate of $0.27. Weyerhaeuser <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WY)") else Response.Write("(NYSE: WY)") end if %> rose $4 7/16 to $61 13/16 after matching the analysts' mean estimate by announcing Q1 EPS of $0.43, up from $0.22 for the year-earlier period. Boise Cascade <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BCC)") else Response.Write("(NYSE: BCC)") end if %> jumped $2 5/8 to $40 1/16 and Bowater <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BOW)") else Response.Write("(NYSE: BOW)") end if %> added $2 1/2 to $59 after they also reported significant year-on-year improvement in EPS.

Goldman Sachs raised its ratings on a number of paper companies today, putting some on its "recommended list" and designating the rest as either a "trading buy" or "market perform." Analyst Mark Weintraub stated that he expects North American paper prices to increase later this year or early next year, which could more than double 1999 EPS for most companies. Stone Container <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: STO)") else Response.Write("(NYSE: STO)") end if %> rallied $1 5/16 to $13 7/8, Jefferson Smurfit <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: JJSC)") else Response.Write("(Nasdaq: JJSC)") end if %> leapt $1 15/16 to $19 5/8, and Champion International <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CHA)") else Response.Write("(NYSE: CHA)") end if %> added $4 1/8 to $57 15/16. Georgia Pacific <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GP)") else Response.Write("(NYSE: GP)") end if %> rose $4 1/4 to $72 5/16, Rayonier <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RYN)") else Response.Write("(NYSE: RYN)") end if %> climbed $2 1/16 to $49 7/8, and Temple-Inland <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TIN)") else Response.Write("(NYSE: TIN)") end if %> gained $2 11/16 to $64 5/16.

QUICK TAKES: Compaq <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CPQ)") else Response.Write("(NYSE: CPQ)") end if %> ran up $1 13/16 to $26 1/16 in advance of the company's Q1 earnings report before tomorrow's open. Last month, Compaq warned that it expected break-even results with sales of $5.3 billion, the same as the year before, as the company offered discounts to cut distributors' inventory... Seagate Technology <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SEG)") else Response.Write("(NYSE: SEG)") end if %> gained $4 3/16 to $29 on reporting a loss of $0.10 per share before charges. The First Call mean estimate was a loss of $0.09... Entertainment products distributor K-tel International <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: KTEL)") else Response.Write("(Nasdaq: KTEL)") end if %> surged another $6 11/16 to $21 5/8 in the wake of its announcement last Thursday that it will launch its online service, K-tel Express (www.ktel.com), on May 1, offering more than 250,000 music titles.

ARCO Chemical Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RCM)") else Response.Write("(NYSE: RCM)") end if %> jumped $6 to $54 1/2 after announcing after yesterday's close that its Q1 earnings will exceed the consensus estimate by more than 35%. The company will announce earnings on April 21... Positive sentiment following Yahoo!'s <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: YHOO)") else Response.Write("(Nasdaq: YHOO)") end if %> higher-than-expected Q1 earnings last Thursday continued to lift shares of the Internet content aggregator and its competitors. While Yahoo! inched up $1 7/8 to $114 7/8, Infoseek <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SEEK)") else Response.Write("(Nasdaq: SEEK)") end if %> added $4 1/16 to $25 5/8, Excite <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: XCIT)") else Response.Write("(Nasdaq: XCIT)") end if %> gained $7 1/8 to $76, and Lycos <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: LCOS)") else Response.Write("(Nasdaq: LCOS)") end if %> rose $3 1/8 to $68 5/8. The shares were also boosted by initial coverage by Merrill Lynch, which rated the search engine companies as "long-term buys."

Consumer appliances maker Sunbeam Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SOC)") else Response.Write("(NYSE: SOC)") end if %> added $1 5/8 to $30 after announcing that its subsidiary, The Coleman Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CLN)") else Response.Write("(NYSE: CLN)") end if %>, will close its Cedar City, Utah, sleeping bag facility and the operations will be consolidated into its Lake City, S.C., facility. Sunbeam expects this will save $2.5 million... Green Tree Financial <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GNT)") else Response.Write("(NYSE: GNT)") end if %> rose $1 3/16 to $40 1/16 after Fitch IBCA placed some of the company's securitizations on RatingAlert evolving, removing them from RatingAlert negative, following Conseco's <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CNC)") else Response.Write("(NYSE: CNC)") end if %> proposed acquisition of Green Tree. Conseco gained $2 1/16 to $50 1/16... ABN AMRO initiated coverage of Ciena Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CIEN)") else Response.Write("(Nasdaq: CIEN)") end if %> with a "buy" rating and a price target of $55. It estimates earnings of $1.37 a share for fiscal 1998, and 30% to 35% EPS growth for 1998 and 1999. Ciena gained $5 1/4 to $46 1/2.

Harley-Davidson <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HDI)") else Response.Write("(NYSE: HDI)") end if %> revved up $2 5/8 to finish at $35 1/8 after the motorcycle manufacturer announced that because production is moving ahead of schedule it is raising its target to 148,000 units from 147,000 units projected in January. The company also reported Q1 earnings $0.29, a penny higher than First Call mean estimate... Centennial Cellular <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CYCL)") else Response.Write("(Nasdaq: CYCL)") end if %> jumped $6 1/4 to $31 1/8 after the cellular phone systems company announced it has decided to explore "strategic alternatives" and has retained Donaldson, Lufkin & Jenrette to advise it on such alternatives.

Paine Webber Group <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PWJ)") else Response.Write("(NYSE: PWJ)") end if %> continued climbing, adding $2 11/16 to $48 5/8 after yesterday reporting Q1 EPS of $0.77 versus the First Call mean estimate of $0.67. Donaldson, Lufkin & Jenrette raised its rating on the securities brokerage to "market perform" from "underperform"... Echostar Communications <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DISH)") else Response.Write("(Nasdaq: DISH)") end if %> gained $2 1/16 to $26 after Deutsche Morgan Grenfell raised its rating on the direct broadcast satellite company.

Earnings Movers:

Cooker Restaurant Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CGR)") else Response.Write("(NYSE: CGR)") end if %> up $1 3/16 to $11 1/2; Q1 EPS: $0.23 vs. $0.19 last year; Estimate: $0.23.

Sport Supply Group <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GYM)") else Response.Write("(NYSE: GYM)") end if %> up $1 to $10; Q2 EPS: $0.30 vs. $0.03 (excluding discontinued operations) last year; Estimate: $0.30.

Clayton Homes <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CMH)") else Response.Write("(NYSE: CMH)") end if %> up $1 3/8 to $22 3/8; Q3 EPS: $0.26 vs. $0.22 last year; Estimate: $0.26.

Sanmina Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SANM)") else Response.Write("(Nasdaq: SANM)") end if %> up $8 3/4 to $80 1/4; Q2 EPS: $0.71 vs. $0.47 last year; Estimate: $0.67.

Enron Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ENE)") else Response.Write("(NYSE: ENE)") end if %> up $2 3/4 to $50; Q1 EPS: $0.65 vs. $0.57 last year; Estimate: $0.60.

Vitesse Semiconductor <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: VTSS)") else Response.Write("(Nasdaq: VTSS)") end if %> up $3 7/8 to $55 5/8; Q2 EPS: $0.31 vs. $0.20 last year; Estimate: $0.29.

Apex PC Solutions <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: APEX)") else Response.Write("(Nasdaq: APEX)") end if %> up $2 1/8 to $30; Q1 EPS: $0.24 vs. $0.18 (before charges) last year; Estimate: $0.17.

Advanced Fibre Communications <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AFCI)") else Response.Write("(Nasdaq: AFCI)") end if %> up $4 5/8 to $42 1/4; Q1 EPS: $0.15 vs. $0.06 last year; Estimate: $0.14.

GOATS

Furniture retailer Ethan Allen Interiors <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ETH)") else Response.Write("(NYSE: ETH)") end if %> slipped $5 7/16 to $56 11/16 after reporting fiscal Q3 EPS (before charges) of $0.64 versus $0.44 a year ago, which was ahead of the I/B/E/S mean estimate of $0.62. Including an $800,000 charge stemming from the redemption of $52.4 million of its senior notes lowers the company's earnings to $0.61 per share. Given the housing boom the country is currently experiencing, the results were unexpected. With 30-year fixed-rate mortgages just barely north of 7% and new homes going up at the highest rate in more than a decade, the economic environment seemingly could not be any better for Ethan Allen. Instead, the company just barely beat analysts' Q3 earnings estimates after walloping expectations by an average of almost 20% over the five previous quarters.

Cytyc Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CYTC)") else Response.Write("(Nasdaq: CYTC)") end if %> fell $8 3/8 to $15 7/8 after saying it expects to report a Q1 loss of between $0.36 and $0.38 per share due to delays by health insurers in implementing the new billing code assigned to the firm's ThinPrep product, which is used to screen women for cervical cancer. The Street had been expecting an $0.11 per share loss in the quarter. Because of the problem, reimbursements have been delayed for Cytyc customers, which cut into revenues due to a hesitant reordering climate. Revenues are expected to come in at $8 million, roughly double sales in the same period a year ago but 34% less than the company's Q4 revenues of $10.7 million. While the billing code glitch has hampered sales, the efficacy and value of ThinPrep has not been questioned. The challenge for the company continues to stem from its ability to convince doctors and train lab techs to engage in the procedure. Cytyc is not alone in dealing with this kind of risk, though, as two of its rivals, AutoCyte Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ACYT)") else Response.Write("(Nasdaq: ACYT)") end if %> and NeoPath Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: NPTH)") else Response.Write("(Nasdaq: NPTH)") end if %>, have similar economics.

QUICK CUTS: Drugmaker Pfizer Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PFE)") else Response.Write("(NYSE: PFE)") end if %> dropped $2 1/16 to $99 1/16 despite reporting Q3 EPS of $0.53, which was in line with the Street estimate for the quarter... Commercial banking titan Chase Manhattan <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CMB)") else Response.Write("(NYSE: CMB)") end if %> slid $3 5/8 to $142 3/4 on rumors it is shopping around for a brokerage firm, possibly Bear Stearns <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BSC)") else Response.Write("(NYSE: BSC)") end if %>... Stewart & Stevenson Services <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SSSS)") else Response.Write("(Nasdaq: SSSS)") end if %> tanked $2 3/4 to $23 3/8 after Hanifen, Imhoff cut its fiscal 1998 earnings estimate for the supplier of Army vehicles to $1.38 from $1.50 per share... Wound treatment programs operator Curative Health Services <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CURE)") else Response.Write("(Nasdaq: CURE)") end if %> slipped $1 5/16 to $34 7/8 after the FDA released a letter that directed the company to stop selling its not-yet-approved Procuren treatment, according to Bloomberg News.

Consumer healthcare products giant Johnson & Johnson <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: JNJ)") else Response.Write("(NYSE: JNJ)") end if %> fell $1 3/16 to $72 9/16 after reporting fiscal Q1 EPS of $0.73, in line with the First Call mean estimate. However, revenues from the firm's medical devices and consumer products declined compared to the same period a year ago... Investment bank and brokerage firm Merrill Lynch <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MER)") else Response.Write("(NYSE: MER)") end if %> dropped $2 5/16 to $96 11/16 after the firm's CEO said the combination of Citicorp <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CCI)") else Response.Write("(NYSE: CCI)") end if %> and Travelers Group <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TRV)") else Response.Write("(NYSE: TRV)") end if %> will be a threat to the company "over the long term." Merrill Lynch intends to stay independent and is not for sale, he added... Telecommunications software developer Lightbridge Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: LTBG)") else Response.Write("(Nasdaq: LTBG)") end if %> was burned for $3 3/4 to $14 5/8 after saying fiscal Q1 EPS will come in at around $0.01, missing the First Call mean estimate of $0.06.

Digital subscriber line (DSL) telecommunications products company PairGain Technologies <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PAIR)") else Response.Write("(Nasdaq: PAIR)") end if %> declined $2 15/16 to $20 15/16 after reporting fiscal Q1 EPS of $0.16, a penny higher than a year ago but a penny below the Zacks mean estimate... Power conversion systems maker Vicor Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: VICR)") else Response.Write("(Nasdaq: VICR)") end if %> was zapped $1 3/4 to $25 3/4 after reporting fiscal Q1 EPS of $0.12, which was short of the analysts' mean estimate of $0.16 for the quarter... Shaving products, batteries, and personal care products company Gillette Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: G)") else Response.Write("(NYSE: G)") end if %> was nicked for $4 1/8 to $120 1/4 after introducing its new triple-blade shaving system, called the Mach3. The company said it will spend $70 million in fiscal 1998 and $130 million in fiscal 1999 to promote the new razor.

Dental and medical radiographic imaging systems developer Schick Technologies <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SCHK)") else Response.Write("(Nasdaq: SCHK)") end if %> slid $2 to $23 1/8 after saying a delay in an order from a key supplier prevented the firm from shipping $2 million to $3 million of orders in Q4, which will constrain revenues for the quarter to between $12 million and $13 million... American Physician Partners <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: APPM)") else Response.Write("(Nasdaq: APPM)") end if %> lost $7/8 to $9 3/8 after Salomon Smith Barney downgraded the shares of the diagnostic imaging centers management company to "buy" from "outperform"... Academic enhancement software developer Advantage Learning System <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ALSI)") else Response.Write("(Nasdaq: ALSI)") end if %> slumped $1 3/4 to $37 after being downgraded to "buy" from "strong buy" at Piper Jaffray.

FOOL ON THE HILL
An Investment Opinion
by Dale Wettlaufer

Markets & Media

The media is at it again. While looking through the latest edition of Fortune (the superbly useful Fortune 500 issue), I ran into an article titled, "How Scary is this Market, Really?" The article posits that the bull market should be "dead, buried, and decomposed" using traditional measures of a security's value. That it isn't, the authors opine, is due to one of two things: We are in a mania-driven market, a la Japan in the 1980s, or the traditional measures of value are dead.

How about a simple "We don't know what will happen" and "We can't boil down something this complex into an either/or conclusion"? That doesn't make for snappy copy, but it probably reflects the truth, at least for investors that believe that the world is chaotic and can't be neatly organized into either/or. The valuations on a market index such as the S&P 500 are the result of hundreds and thousands of variables, some more important than others.

The charts offered by the article's authors show four valuation measures: P/E, price-to-cash flow, price-to-book, and price-to-sales. Only one set of parameters is given for the data set, though. According to some unknown data set, the parameters of overvaluation and undervaluation present the market as undervalued or fully valued on a forward-P/E basis until about 1992, at which point the P/E goes parabolic, from nearly fully valued to overvalued by about 80%. On a price-to-cash flow basis, the market reaches an overvalued state earlier on the graphic but doesn't go hyper until the last two years or so. On this basis, the data shows the market at more than 100% overvalued. Over the last two couple years, to the best of my ability to discern from the somewhat cartoonish presentation of the data's timeline, the price-to-sales and price-to-book also went hyperbolic in the last couple years and are now both in the 150% overvalued range. Will it all end badly? Are we buying into a new era?

The straw man presented here is the "bull'" argument: companies are priced at higher multiples because profits will grow faster and more sustainably than in the past. This straw man argument doesn't take into account a number of factors. The first factor is that "price" isn't the number that an investor should use when looking at multiples to earnings. Looking at just the capitalized equity value of a company without adjusting for cash and debt on the books leaves out two very important parts of the valuation question that are considered in mergers and acquisitions. If a company has a capitalized equity value of $100 million and has excess cash of $100 million that can be taken out of the business as well as no debt, then the effective price to an acquirer is zero. The P/E might be 20 if the company has net income of $5 million, but if I can acquire the company at $100 million and pay myself a special dividend of $100 million immediately after the acquisition closes, the effective price to me is nil. That's why taking on debt can work as an effective takeover deterrent, and that's why LBO people look for sources of liquidity, such as cash hoards, understated real estate holdings, or over-funded pension plans, in takeover targets.

Speaking of pension plans, accounting for post-retirement health benefits changed in the year 1991, just as the price-to-book value ratio in the article climbs into the overvalued range. (Whatever that means, again, I don't know because the writers don't give any parameters for their data). With pronouncement 115 of the Financial Accounting Standards Board, corporations had to switch their post-retirement health benefits accounting from an expense-as-you-go basis to an accrual basis, which loaded down balance sheets with a bunch of new liabilities that weren't there, on an accounting basis, in prior periods. Though the obligation always existed, it wasn't on the books before FAS 115. Once it did go on a corporation's books, the price-to-book ratio went nuts. GM, for instance, took a $50 per-share hit to its book value, as did a number of old-line industrial companies with future health benefits to be accounted for. In the S&P 500 index, which contains a ton of such companies of this sort, that changed the price-to-book value ratio drastically while the economic value of a company, and thus its price, didn't change.

FAS 121, another such accounting pronouncement, mandated the writedown of capital assets when future cash flows to be realized from those assets were determined to be less than the carrying value of those assets. Economically, the market can figure out efficiently, over the medium and long terms, whether asset values are valid. On a Generally Accepted Accounting Principles (GAAP) basis, though, price-to-book can change literally overnight.

An important component in the way corporations are priced is the interest rate environment. The charts proffered by Fortune encompass the years 1978 to 1998. The low point in stock valuations is found in approximately 1980, or just prior to the 20-year peak in interest rates, as measured by the 10-year Treasury note. The low point in interest rates, not coincidentally, was touched in 1993, just before the Fed accidentally engineered a bond market crash -- and was being approached again in March of this year. In other words, if we turned the P/E ratio upside down, it would match the 20-year trend in interest rates. Or, if you turned the P/E plot upside down, it would match the 20-year trend of interest rates. (I would also recommend checking out www.yardeni.com on the correlation of earnings/price ratio -- yes, earnings-to-price -- as well as this specific chart: http://www.yardeni.com/public/stkvalu.pdf).

So, why pick on the stock market? Why not pick on those insane bond investors. It's all going to end badly! Those crazy bond investors should be stopped! Since a business is a cash machine, a bond with variable coupons, it stands to reason that the net present value of future coupon payments, or earnings, should go up, even if the trend of those earning isn't enhanced by lower interest rates today. However, we do know that lower interest rates today do, if anything, enhance the cash flows available to business in future periods.

So, there is a reflexivity between interest rates and cash flows in addition to the traditional competition for investment dollars that is played out between stocks and bonds. As prices for bonds go up, which is the same as saying yields are dropping, the prices of stocks go up, as well.

I could go on about the absurdity of comparing 1978 with 1998, seeing as how the Cold War is over, the world market is so much larger now, and prices are in check. That much should be obvious to anyone paying attention to the macroeconomy. The point is, investors should invest in individual businesses. There is always opportunity in the market if you're not investing billions of dollars, which is necessarily hard to move and which necessitates more investment ideas to come from a smaller universe of potential investments.

Looking at the market with an non-defined data set and asking the rhetorical question, "How scary is this market?" is somewhat of a time-waster. The market can do very poorly while individual companies outperform all other asset classes. Sure, valuation indicators are high right now and sure, it's natural to wonder about that. But backing it up with a data set of dubious value, totally ignoring important considerations such as interest rates in the way financial assets are priced, looking at the quantity of aggregate earnings and only paying lip service to the quality of aggregate earnings, and not even looking at the fact that the S&P 500 as a whole is constructed of much different sorts of companies in 1998, among other factors, all vitiate the argument that Fortune puts forth.

CONFERENCE CALLS

Please see the Motley Fool's Conference Calls page for call information and links to synopses.

WE DELIVER - Get The Evening News delivered
to your e-mailbox every evening!

ANOTHER FOOLISH THING

See something moving a stock that we didn't cover?
E-mail the Fool News Team
and we will start working on the story.
Unfortunately, we cannot answer every e-mail
or respond to individual questions.

Yi-Hsin Chang (TMF Puck), a Fool
Brian Graney (TMF Panic), Fool Two
Alex Schay (TMF Nexus6), Fool, too
Dale Wettlaufer (TMF Ralegh), Final Fool
Contributing Writers

Brian Bauer (TMF Hoops), another Fool
Jennifer Silber (TMF Amused), Fool at last
Editing