The Week in Review -- September 24, 1999

The Markets

  9/17 Close 9/24 Close Change %Change
DJIA 10,804.27 10,279.33 -524.94 -4.86
S&P 500 1,335.42 1,277.36 -58.06 -4.35
Nasdaq 2,869.63 2,740.41 -129.22 -4.50

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Shrieks and Yawns
by Jerry Thomas (TMF Cheeze)

Greetings, Fools.

We say it so many times I sometimes get tired of hearing it: Market downturns, however unpleasant they may seem, are trivial events to the true long-term investor. Whatever shrieks of panic you heard in the week just past, they came squarely from the corner of the market timer, the speculator, and the short-termer. Meanwhile, Fools everywhere were snoozing, their alarm clocks set, as always, to At-Least-Five-Years-From-Now. As for me, I imagine my own net worth contracted this week. I can't be sure, because I didn't bother to look. Now, if you don't mind, I'm going to roll over and catch a few more zzzzzs. Wake me if something important happens.

Sleep seemed to be an appropriate thing to do this week. Maybe that's why I liked David Gardner's Rule Breaker report on Wednesday. While stock prices were falling around him, Dave found it more interesting to talk about whether he should wear socks in bed on cold autumn nights. Leave it to a Fool to so studiously ignore the shifting vicissitudes of the market in favor of matters more immediately human.

David's theme was change -- specifically, the change of season -- but if I might broaden that idea a bit, perhaps I can enlarge the thought to include a change of perception. David and brother Tom appeared as co-hosts for three hours on CNBC's morning "Squawk Box" program last Monday, and I must say they looked comfortable there, wearing their provocative Motley caps. It was a moment to relish, especially when David -- very politely -- asked an analyst, who had just spent several minutes predicting the next few months' market moves, if such predictions were even possible. The response was as polite as it was equivocal, but even then I could not help applauding inwardly at the quiet audacity of the question. With a single interrogative, the world grew one inch more Foolish.

The market declined. Folly advanced. It was an up week, overall.

Here's this week's Pithy Quote: "There's such an overvaluation of tech stocks it's absurd. And I'd put our company's stock in that category." The fellow who said that was one Steve Ballmer, President of Microsoft (Nasdaq: MSFT), who promptly saw the value of his own shares of that company drop by something more than a billion dollars. Gee, and the dumbest thing I did all week was wear plaid pants with a striped shirt. Now I don't feel so bad.

Ballmer's few syllables perhaps accounted for much of the decline in equities this week, although -- who knows? -- maybe the market was looking for any old excuse to take a breather. But never mind my speculation; go read the commentary from Brian Graney (TMF Panic) and Matt Richey (TMF Verve), who put Ballmer's remarks in perspective with a measure of clarity that was hard to find this week.

You can also find good reading in Wednesday's Fool Plate Special by Warren Gump (TMF Gump). This week the Department of Justice unleashed a new assault on the tobacco industry, and Warren's consideration of it comes solidly from an investor's perspective -- an angle that is curiously absent from most coverage of such events.

If there's any must-read this week, it comes, not surprisingly, from Louis Corrigan (TMF Seymor). Louis has always been one stand-out Fool, and I've always been able to count on him to make my own work easy -- whenever I need to find a worthy item to promote in these weekly Notes, all I've had to do is look for the Corrigan byline and I'd have a paragraph that would write itself. Alas, Louis has announced that he is leaving the Fool for a position at Aesop Capital, where he can employ the principles honed in his four years as a Fool more directly. Thursday's Fool Plate Special is Louis's farewell message, and it sums up the years he spent here and his wishes for the future of the Fool.

I can salute Louis all I want, but in truth, his work is his own best tribute. Look at some of his most provocative writing, a consideration of Alan Abelson, the famously pessimistic Barron's lead columnist who is carefully critiqued this week in Louis's two-part special. Then in Wednesday's Fool on the Hill commentary, Louis asks the question, "Is Online Trading Dangerous to Your Wealth?" Here Louis examines a UC-Davis study indicating that frequent stock trading tends to (surprise, surprise) reduce most investors' overall performance. With any luck, these three pieces will help those of us who will be suffering the pangs of Corrigan withdrawal.

We all wish Louis well in his new life. Meanwhile, begin taking the steps necessary to form a new addiction. Try Monday's Rule Breaker, by Selena Maranjian (TMF Selena). Here Selena considers the contradictions we all must face as investors: Is investing easy? Or difficult? Should you be willing to pay a premium for a quality stock? Or be determined to wait for a more obvious value? Perhaps the real value comes in being willing to ask such questions than in finding any clear-cut answer.

If you want a clear-cut answer to the grand question of investing, maybe you should cap off your weekend with a read of Thursday's Rule Maker report by Rob Landley. "I've been out of touch for about three weeks during the long and drawn-out process of moving from Texas to New Jersey," writes Rob. "I haven't followed any stock-related news. Nor have I quoted a single one of my holdings. I haven't even read my e-mail." In a week I imagine all too many investors would like to forget, Rob explains the steps he took that brought him to the place where he can invest with such peace of mind.

Investing that lets you sleep at night. I like the sound of that.

Until next week,



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