by Maggie Mahar
mergers of, 221–22
momentum investing and, 209–16, 218, 294, 301–3
one-stop shopping for, 164
quarterly reports, 163–64
ranking services, 220–22
TIPS trading by, 383
value funds, 23, 176, 203–16
See also fund managers
Nasdaq, 17, 30, 50, 86, 209, 250, 295, 324, 364
crack and implosion of, 308, 317, 338
extreme climbs and losses, 28, 283, 324, 325
peak in March 2000, xx, 318
percentage gain in 2003, 387
National Association of Securities Dealers, 347, 352
National Bureau of Economic Research, 362
National Center for Employee Ownership, 135, 136
National Medical Enterprises, 126
National Presto Industries, 43
natural resources, 372–75, 377, 396
NBC, 67. See also CNBC
NBC News, 67
Neff, John, 187
nest eggs. See savings
Netscape Communications, 97, 100–101
Neuberger & Berman, 312
Neuhausen, Benjamin, 135
Neumann, John von, 379
New Economy, 87–88, 239–65, 279, 280, 330
flaw in theory of, 258
media on, 167, 254
myths of, 32
success symbols of, 18
technology and, 25
thinness of, 256
Newsweek, 22, 166, 170, 171, 200, 263
New York City Teacher’s Retirement Fund, 110
New Yorker, 37, 91, 241
New York Post, 11, 299
New York Stock Exchange, 30, 352, 405n.33
advance/decline ratio, 192, 315
Clinton and, 248–49
CNBC broadcasts from, 153, 155
crash of 1987 and, 66
New York Stock Exchange
on individual investor numbers, 58, 107
1960s market and, 37, 40
shares trading record, 47
short selling and, 54
stock highs, 11–12
top-performing stock, 243
Yippie protests at, 37
New York Times, xix, xx, 20, 41, 61, 63, 162, 164, 181, 183–84, 256, 293, 298, 346, 413n.21
blue-chip favorites, 210
on Dow’s 10,000 high, 300–301
financial reporting, 169
“Nifty Fifty” stocks, 40–43, 45, 210, 224, 234, 302, 327, 354
in late 1990s, 302–3, 305, 406n.18
Nikkei, 215, 263, 355
Nixon, Richard, 88, 89, 155, 390
Noble, George, 272–73
Nocera, Joseph, 66, 414–15n.35
Norris, Floyd, 183–84, 343–44
Norton, Leslie P., 443n.27
Now (PBS series), 352
NYSE. See New York Stock Exchange
Oakes, Brian, 200
Oakmark Equity & Income Fund, 22–23, 215, 217
Objectivist Newsletter, 90
Odyssey Partners, 283
oil consumption, 374
oil investments, 45, 354, 355, 374, 375, 396
oil prices, 316, 373
oil wealth, 372
older investors, 334
Old Money vs. New Money, 43, 381–82 “One-Decision” stocks, 41, 302
O’Neill, Paul, 14–15
one-time expenses, 273–75, 479
online trading, 18–19, 21, 182, 257, 295, 338
OPEC, 316, 373
operating earnings, 257–58, 273–75, 363
Oppenheimer. See CIBC Oppenheimer options market, 282–83
Oracle, 28, 205, 210, 281
nonexercised stock options, 145, 277, 428n.42
stock performance, 259
Orange County (Calif.) bankruptcy, 20
overvaluation, xx–xxi, 13, 55, 62, 171–72, 262
bear market beginnings and, 326
Blodget’s concerns about, xxi, 347, 350
crash of 1987 and, 67, 69, 71
Dudack’s concerns about, 305, 306–7
Greenspan’s concerns about, 92, 247, 248
Internet stocks and, xxi, 26, 297
late 1998 market and, 287, 303
momentum and, 202, 203–16, 234, 235, 244, 307
share buybacks and, 133
2004 bubble potential and, 389
Oxford Health, 270
Pacific Tel, 112
PaineWebber, 71, 73, 74
Kerschner and, 96, 120, 305, 313
Warburg merger, 312–13
Parker, Richard, 435n.53
Pascal, Blaise, 212
Pauli, Wolfgang, 165
PBGH Growth Fund, 205
PBS, 30, 71, 304, 307–12
PCS GP, 276
Pearlstein, Steven, 270
Pelican Fund, 113
Pension Benefit Guaranty Corp., 110
pension funds. See retirement plans People’s Market, 17–32, 49, 73
PepsiCo, 145, 195, 428n.42
P/E ratio. See price/earnings ratio Perry, Donald, 261
Pfeiffer, Eckhard, 145, 428n.42
Pfizer, 210, 277, 287, 302, 327, 387, 388
Phelps Dodge, 206
Philippines, 355, 377
Phillips, Don, 15, 219, 220–21, 438n.30
Phillips, Susan M., 255
Picciotto, Robert, 62
Piece of the Action, A (Nocera), 66, 414–15n.35
Pilgrim, Gary, 205, 208–9
Pimco, 119, 330, 371, 374, 377
Piper Jaffray, 71
Pitt, Harvey, 352
Pittman, Bob, 199, 200, 201
Pixelon, 288
Polaroid, 41, 42, 210, 302
popular wisdom. See conventional wisdom Porter, Barry, 320
portfolio insurance, 68
portfolio managers. See fund managers Postlewaithe, Jennifer, 105–6, 108, 114, 121, 337–39
Powers, William, 168, 169
Prechter, Robert, 369, 412n.9
preferred stock, 381
presidential election of 2004, 395, 396
press. See media
Preston, Michele, 98
price/earnings ratio, 69, 70, 85, 191, 406n.18
blue-chip favorites, 210
earnings misrepresentation, 270
emerging markets, 377
large-cap stocks, 226
as long-term returns guide, 363–64
1990s “Nifty Fifty” and, 302–3
projected 2004 earnings and, 389
Priceline.com, 288
prices
commodities, 372–74
deflation threat and, 260
excess capacity and, 25, 258, 259, 261, 278
See also inflation; stock prices
Primerica, 125
Private Securities Litigation Reform Act of 1995, 146, 148
probability vs. certainty, 283–85, 369
Procket Networks, 321
Procter & Gamble, 46, 195, 425n.24
Prodigy, 194–95
productivity, 32, 251, 254–65
economist definition of, 255
excess capacity, 258–62, 329
overestimates of, 256–57
profits
AOL accounting and, 201, 202, 306
deflation and, 260
dividends and, 379, 380
lowness of, 329, 362
momentum funds and, 205
operating earnings and, 273–74
productivity and, 256–58
“reported” earnings and, 145, 271–75, 280, 389
stock option effects on, 276–79, 280, 343
profit-sharing plans, 103
Providian Financial, 26, 27, 178
Prudent Bear Fund, 178
Prudential, xviii, 8–12, 96, 291, 307
Prudential Bache, 74
Public Citizen, 147
Putnam Investments, xx, 222, 223, 320
put options, 279, 281–82
Quantum, 280, 374–75
quarterly earning
s reports, 163–65, 170, 274, 433n.32
analysts’ raised estimates, 62, 206–7, 262
buybacks and, 277
Quattrone, Frank, 97–100, 325–26, 341
Quayle, Matt, 161
Quest, 28
Quinn, Jane Bryant, 22
Qwest, 319
Radner, Gilda, 280
Rand, Ayn, 90, 91
randomness, 284
rational market. See efficient market theory Raychem, 127
Razzouk, William, 197–98, 199
Reagan, Ronald, 91, 128, 155
real assets investment, 354, 375, 376
real estate investment, 31, 45, 116, 341, 354, 372, 376, 404–5n.33
conventional wisdom on, 191
drop in market, 116
rise in value, 392–93
stockholdings as greater than, 430–31n.5
use value and, 376
See also mortgage rates; REITs
real interest rates, 410nn.12, 13
“RealMoney” website, 184
“real returns,” 395
recession of 1990–91, 48, 73, 85, 86, 93, 95, 96, 116, 232, 409n.1
recession of 2001, 326, 392
Redback Networks, 321
Red Hat, 107, 335
Reebok International, 145, 428n.42
Reed, John, 127
Regan, Don, 39
Reichardt, Carl, 429n.42
REITs, 59, 381
Rekenthaler, John, 226
“Religion Stocks.” See “Nifty Fifty” stocks
Republicans, 19, 91, 128, 131, 143, 333, 392–96, 418n.45
research, 177–92
Amazon.com price forecast and, 290
brokerage deregulation effects on, 182
independent, 71, 177–84, 189–91
investment banking influence on, 10, 184
long-term past performance and, 186
mutual fund reports, 185–89
shortcomings of brokerage, 182–84, 295, 345–46, 349–52
short selling and, 55, 56, 178, 181
tips vs., 189, 190
as women’s Wall Street slot, 242
See also analysts
retail sector, 257
retirement plans, 4, 51, 224
baby boomer financial fears and, 117–18, 173, 211
cautious stock 1982 investments for, 51
dazzling growth of, 18
federal insurance pool, 102
individual investments as, 15, 18, 21, 23–24, 28, 31, 59, 103–4, 184–85, 334
media how-to articles on, 119–20, 305
Social Security safety net, 119, 265
traditional pension vs. new model, 102–3, 109–11, 340
unrealistic earnings assumptions for, 389
worker-coverage percentages, 419n.6
See also 401(k) plans; IRAs
Rhea, Robert, 430n.3
Richard Russell’s Dow Theory Letter, 3, 4, 7, 27, 63, 154–55, 182, 316, 370, 481n.3
“sell” signal (1987), 63
Richebächer, Kurt, 362, 380
risk
anxiety as motivator of, 116
awareness of, 106, 384
bear market management of, 366, 368–71
buy-and-hold strategy and, 359–60
Dow Theory and, 370
faded fears of, 77, 329
Federal Reserve intervention and, 92
fund manager picks and, 188, 225–35
market cycles and, 173–74
probability-certainty confusion and, 283–85
retirement saving and, 118–19
returns and, 76
small investors’ motivations for, 118, 211
stock options and, 127
stock vs. bonds, 423n.49
TIPS as free from, 384
for value investor, 213
Rite Aid, 44, 280
Rivlin, Alice, 248
RJR Nabisco, 74
Roach, Stephen, 244, 251, 263, 330
Rogers, Jim, 374–75, 413n.18
Rohatyn, Felix, 76
Rolling Stone, 195
Rosenberg, Joseph, 265
Rubin, Robert, 82, 248–49, 376
Rubino, Kathy, 289
Rukeyser, Louis, 189, 307–12, 313, 341–42, 438n.30
Rukeyser Report, 189 “rule of 72,” 381
Russell, Richard, 35, 46–47, 163, 190, 371, 375
alternative investments and, 396
bear market and, 315, 316, 342, 365, 366, 370
on compound interest, 381–82
crash of 1987 warning, 63, 77
Dow Theory and, 3, 4, 7, 27, 63, 182, 370
on gold market, 377
on long-term returns of 2003 stock purchases, 363–64
on market feeding frenzy, 153–55, 171
on mid-1990s bull market, 191–92, 228–29
on 2004 new bubble, 388
on wealthy investor’s approach, 381–82
Russia, 357, 372, 377
bond payment default, 282, 283, 284
Rutenberg, Jim, 433n.32, 434n.39
S&Ls, 59, 74–75, 93, 147
federal bailout, 94
S&P 500. See Standard & Poor’s 500 Safe Harbor Provision of 1995, 146–49
Saldich, Robert, 127
Salomon Brothers, 98, 136–37, 245, 246, 82.
See also Grubman, Jack
Salomon Smith Barney, 246, 285
San Francisco Exchange, 64
Santoli, Michael, 206, 207
Sarbanes-Oxley Act of 2002, 343, 390
Sauerwein, James, 22, 107, 111, 335–36
Saurwein, Shirley, 106–8, 114, 121, 335–36
savings
capital spending and, 378
compounding, 381
inflation effects on, 47
inflation/investment relationship, 49
invested in stock funds, 31, 104–7, 114–21, 154, 204, 297, 391
losses in stock market, 27–28, 31, 334, 336–39
low interest rates and, 104, 114, 115, 116, 391
See also retirement plans
savings and loans. See S&Ls
Scanlon, John, 320
Scharfer, Paul, 341, 404–5n.33
Schilit, Howard, 442n.10
Scholes, Myron, 427n.36
Schwab. See Charles Schwab
Schwed, Fred, 436n.60
Schwert, G. William, 452n.19
Scient, 319
Scott Paper, 145, 429n.42
Scudder, Stevens & Clark, 279, 280, 287
Sea-Land, 44
Securities and Exchange Commission, 30, 75, 91, 143, 144, 148, 229
AOL earnings disputed by, 202, 457–58n.7
Bond’s kickbacks complaint by, 312
congressional freeze on budget of, 147
momentum funds and, 205
operating earnings filing with, 275
