Yahoo! (Nasdaq: YHOO) reports second-quarter earnings after the bell today. (We'll have our Take tomorrow morning.)

In a mixed market this afternoon, one commentator suggested that investors would look to the Internet bellwether for "cues on whether to start buying again." While Yahoo!'s earnings may be noteworthy for companies struggling to make a buck via Internet revenues and advertising, we hardly think the rest of the investing world should hinge their decisions on the company's results. If you're investing in paper and health care, what do you care what Yahoo! does?

Don't get caught up in this "ready, set, go" mentality as earnings season begins.

In today's Motley Fool Take:

Microsoft's Out of Options

Beginning in September, Microsoft(Nasdaq: MSFT) will grant its employees awards of actual stock in lieu of options. Well done, Mr. Softy.

As a source of motivation, stock options are overrated. Perhaps they offer an incentive to stick around until fully vested, but options rarely enhance performance -- even less so when they are woefully out of money. Realistically, how many employees even remember their respective strike prices?

What's worse, far too many companies, when faced with a plunging stock, go ahead and adjust their strike prices downward (the dreaded "repricing") or replace existing grants altogether with lower-priced options. To what effect? The only certainty is that shareholders wind up with the short end of the stick with unexpected dilution of an already devalued investment.

You could argue that granting workers actual shares of stock fosters a situation where a company's stock could potentially sink to pennies and the employees still come out ahead. Maybe, but the expense of restricted stock grants is recognized up front and at least they work to motivate and retain workers. Can the same really be said about options?

Microsoft was set to expense stock options in fiscal 2004 anyway, but this is still a gutsy move. Hopefully, other companies in the option-heavy tech space will follow Mr. Softy's example. Who knows? Maybe the "option pass" will become the play to call in the corporate huddle.

Discussion Board of the Day: Microsoft

Do you think that Microsoft is right to roll out its Stock Awards program? Is the company simply buying time until it does something with its $46 billion cash hoard? All this and more -- in the Microsoft discussion board. Only on

Bulls See What They Want

Sometimes investors see what they want to see. A case in point is today's up-and-down trading in Cisco Systems(Nasdaq: CSCO).

The networking king jumped more than 4% in early trading after a Dutch newspaper reported that CEO John Chambers expects an IT market recovery within two to four months. For Nasdaq apologists, this was just the pronouncement they'd been waiting for. Tech bulls stampeded into Cisco, riding the stock to a new 52-week high of $19.55.

By noon, however, the stock was back below $19 after a Cisco spokesperson cautioned that Chambers' comments had been misinterpreted. Apparently, what he actually said was that companies will renew their IT spending two to four months after their businesses turn up (no comment on when that might be). This is essentially what Chambers has been saying for several quarters.

Somehow, on this great-news-turned-no-news, Cisco managed a nearly 1% gain on the day. Investors apparently have no qualms paying 32 times expected 2003 earnings and 29 times guesstimated 2004 earnings. Again, sometimes investors just see what they want to see.

Quote of Note

"Let not the sands of time get in your lunch." -- National Lampoon, "Deteriorata"

Buy Buffett on eBay

Pull out your pocketbooks, people. Your dream of dining alongside Berkshire Hathaway(NYSE: BRK.A) head Warren Buffett could finally become a reality.

Watch Warren butter his roll. Watch him sip on a Coke(NYSE: KO). See him scarf down a tasty lunch at one of New York City's fabulous restaurants. And while you're at it, glean knowledge from his amazing brain about value investing and other titillating topics.

Via eBay(Nasdaq: EBAY), a lunch with Buffett is up for grabs. You can take along seven of your closest buds, too, should you pony up the winning bid. All proceeds will go to the Glide Foundation, a San Francisco-based charity, which provides all sorts of services to needy people. Another lunch with Buffett, this one in San Francisco, is being offered up at a live Thursday night auction in the city by the Bay.

The honor and pleasure of eating with the Oracle of Omaha won't come cheap, though. As of last check, the highest bid on eBay is up to $27,000. Whew! You best hurry, too. The auction closes tomorrow at midnight eastern time.

In the quirky world of eBay, though, there are usually substitutes, and this auction is no different. Instead of shelling out twenty large, you could instead have lunch with Warren Buffett's self-proclaimed "evil twin." That one's going for $7.50.

Or how about just having lunch with this person instead of Warren Buffett for $50? He/she is offering to meet anywhere, at any time, in Manhattan, and will donate proceeds to a New Jersey soup kitchen.

If you don't have an extra $30,000 sitting around for a lunch date, or the idea of paying to eat with two Buffett substitutes isn't your thing, then consider learning about deep value another way, with Tom Gardner's Motley Fool Hidden Gems newsletter. It focuses specifically on sussing out solid but overlooked companies at bargain prices.

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Quick Takes

Altria (NYSE: MO) was hammered by more than 8% after a Morgan Stanley analyst raised concerns about the company's legal exposure (as if that's news). Nevertheless, the research note was enough to ignite fears that its Philip Morris USA unit could be forced to post a potentially bankrupting bond in a lawsuit over "light" cigarettes.

Intel (Nasdaq: INTC) extended its recent gains with another 1.8% push to a new 52-week high. Today's move was propelled by a raised price target at UBS (from $26 to $29). The real news of note here is that Intel is now trading at a heady 38 times estimated 2003 earnings and 29 times estimated 2004 earnings.

Capital One (NYSE: COF) showed its financial ingenuity today with the first-ever fixed-rate credit card. By invitation only, certain credit-worthy customers will be invited to qualify for a 4.99% fixed-rate, no-annual-fee card. That's 4.99% fixed forever, not just an introductory period. Pretty nifty offer, although it didn't help the stock, which closed down about 1%.

And Finally...

Today on

Bob Bobala, Robert Brokamp, Paul Elliott, Mathew Emmert, Jeff Fischer, Tom Jacobs, LouAnn Lofton, Bill Mann, Selena Maranjian, Rex Moore, Rick Munarriz, Matt Richey, Reggie Santiago, Kate Southerland, Dayana Yochim