Last month, I flipped on CNBC's Squawk Box and was greeted by the headline "Lehman Ups PeopleSoft (Nasdaq: PSFT) Saying Karma Is Good."

Karma is good?

Being an individual investor who frequents discount brokerages, I was unable to get my hands on the Lehman Brothers research report upgrading PeopleSoft from "neutral" to "outperform" based, in part, on its karma. The report may have been a reaction to the March 1999 Forbes magazine article about PeopleSoft's problems entitled "Bad Karma."

Even so, since when do analysts evaluate stocks metaphysically?

Merriam-Webster defines karma as "the force generated by a person's actions, held in Hinduism and Buddhism to perpetuate transmigration and, in its ethical consequences, to determine the nature of the person's next existence." To physicists, every action has an equal and opposite reaction; to Christians, you reap what you sow; and to everyone else, what goes around, comes around.

As people try to make sense of the inexplicable short-term gyrations of the market, karma seems as good an explanation as any. Last month, an analyst from Canaccord Capital Corp. blamed bad karma for Johnson & Johnson (NYSE: JNJ) terminating its agreements with Genetronics Biomedical (AMEX: GEB). James Cramer of TheStreet.com has been caught several times blaming bad karma for negative occurrences to stocks.

Now, with the massive downgrades and negativity surrounding Rule Breaker Amazon.com (Nasdaq: AMZN), it doesn't surprise me to find bad karma as the newest persiflage describing Amazon's perceived demise. In June, when Amazon dropped 20% due to negative comments made by Morgan Stanley's Mary Meeker, the lead to an article in The Standard entitled "Jeff Bezos' Lesson in Hinduism" was "If karma is a boomerang, then Amazon.com just got whacked."

Katherine Hobson of TheStreet.com wrote in an article entitled "E-Tailing: The Karmic Battle Rages On" that resentment from classic retailers "seems to have built up a massive karma deficit for e-tailers."

What's a company to do when the metaphysical forces of the universe seem to be arrayed against it? Perhaps Amazon needs a good CKO -- Chief Karmic Officer. Where does one recruit a cosmic executive who creates good karma? In The Wall Street Journal or a yoga ashram?

I see the invisible hand of a CKO in yesterday's announced alliance to make peace and profits with bricks-and-mortar competitor Toys "R" Us (NYSE: TOY). The two companies are creating a co-branded online toy and video game store, as well as a co-branded online baby products store. In this 10-year strategic alliance, Amazon will be compensated through periodic fixed payments, per-unit payments, and a single-digit percentage of revenue. In addition, Amazon will receive warrants entitling it to buy 5% of Toysrus.com.

The purpose of this harmonic pact is to take advantage of each entity's operating efficiencies, a certain step in the conscious creation of -- what else? -- good karma. Toys "R" Us will buy and manage inventory. Amazon.com will handle site development, order fulfillment, and customer service, and will house all the inventory in its U.S. distribution centers.

Considering that Amazon.com is one of the top 50 brands in the world, and Toys "R" Us ranked fifth in Media Metrix's list of the top 25 e-commerce sites during the last holiday season (Amazon ranked first), the new arrangement should create a powerhouse that benefits both companies, all consumers, and the entire cosmos.

The bottom line about good karma? If a company abides by the rules necessary to create it, the company will ultimately be successful. Of course, there'll be struggles along the way. But, according to Paul Larson in an interview he did with Tom Gardner, Jeff Bezos is recreating himself to focus more on gross profit dollars and overall profitability these days, surely creating both good profits and good karma for the future. Right now, however, the company is feeling the same pressures of being unloved that most Internet companies have succumbed to this year.

As any Chief Karmic Officer worth his curry knows, the five steps to creating good business karma aren't all that difficult:

  • Do what you say you're going to do.
  • Have integrity in your business dealings.
  • Provide excellent customer service. (The customer is always right, and if she isn't, she'll bring bad karma to the doorstep of your corporate offices.)
  • Be honest and ethical.
  • Don't run misleading ads.

If a business abides by these rules, good karma should follow.

As for this summer, well, it hasn't been looking all that rosy. That comes as no surprise to a website called Instant Karma. There, I discovered the following words of astrological wisdom: "The New Moon of July 30, 2000 at 10:24:36 PM in Leo reiterates and deepens the themes of the July Full Moon.... Several different astrological techniques, including two planets at 'crisis' degrees that are associated with money, point to a real probability of some major upsets within financial institutions. This is NOT the time to gamble with the stock market -- larger forces are at play."

Have a great weekend and, as the recently deceased Sir Alec Guinness might have said, "May the Force of good karma be with you."

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