Hot Times in Old D.C.

Yes, we just endured the big blow here in the Washington, D.C., region, and we're still cleaning up. There's plenty more cleaning up going on for people invested in Washington-based companies.

The Washington Post Co. (NYSE: WPO  ) and Bloomberg track 227 publicly traded companies with headquarters or large presences in the D.C. metropolitan area. These range in size from the massive Marriott (NYSE: MAR  ) and Bank of America (NYSE: BAC  ) down to such tiny companies as Xybernaut (Nasdaq: XYBR  ) and SpaceHab (Nasdaq: SPAB  ) .

With the exception of their D.C. operations, these companies have little in common. What they show as a group, though, is just how widespread the current rally in the stock markets is. Year-to-date, there are 32 companies whose share prices have more than doubled, with the leaders including World Airways (Nasdaq: WLDA  ) , XM Satellite Radio (Nasdaq: XMSR  ) , and Primus Telecommunications (Nasdaq: PRTL  ) . For its part, Primus has increased more than 800% over the last 12 months, benefiting from its decisions in 2001 and 2002 to buy back debt on the open market.

What I found unbelievable in this list was not only that more than 15% of all the companies had doubled year-to-date, but also that over the last six months, eight out of 227 companies had stock price declines at all, led by Versar (AMEX: VSR  ) , a hazardous waste site management company. Other losers include scandal-ridden Freddie Mac (NYSE: FRE  ) and The Washington Post Co. Every other company in the list was up over this time period.

Frankly, this terrifies me. Even in the bubble of 1999, the stock market rise was the result of the meteoric performance of less than 25% of all stocks. That everything is going up shows -- to my mind -- that investors may not have shown much discrimination in a rush to get back in. We can only hope that companies' performances can match the renewed hope shown by investors.

Here in Washington, it's not just the rain-swollen Potomac that's rising apace.