You may be surprised to hear that our baby bull is now a year old. That's right, it was one year ago today that the Dow, Nasdaq, and S&P 500 all three bottomed with a whimper.

Since that frightful day and against all odds and expectations, the Dow is up 34%, while the Nasdaq and S&P have climbed 72% and 35%, respectively.

What's it all mean? It means that stock markets go up and stock markets go down -- and that you just don't know where they're headed next. That's why the smartest investors dollar-cost average and stay invested for the long haul.

In today's Motley Fool Take:

Jumpin' Juniper

Continuing this season's positive earnings trend, Juniper(Nasdaq: JNPR) once again showed a profit in the third quarter.

The maker of network gear reported GAAP (generally accepted accounting principles) net income of $7.2 million or $0.02 per share, reversing a loss of $0.24 per share in last year's quarter. Non-GAAP earnings -- excluding one-time charges -- came in at $0.04 per share, beating the analyst estimate of $0.03 per share.

More importantly, investors looked for continued sales growth as an indicator of a possible turnaround in the nightmarish communications industry. Marking the fourth consecutive quarter of growth, net revenues increased 13% to $172.1 million.

And while the company was hesitant in forecasting growth after last quarter's report, this time there are no such qualms.

Yesterday, Juniper forecasted a fifth consecutive quarter of growth, raising its expected Q4 sales estimate to $180 million. Along with $0.05 in non-GAAP earnings, the new expectations trump the analyst estimate of $0.03 in non-GAAP profit on $174 million in sales.

Still, some investors are wary of the stock's triple-digit forward-looking P/E ratio.

Along with the broader rise in the stock market, Juniper shares have quadrupled over the past year in anticipation of a return to growth. The worry is that the stock has gotten ahead of itself, as no substantial recovery has yet been seen in its telecom customer base, such as Verizon(NYSE: VZ) and BellSouth(NYSE: BLS). That said, trying to calculate normalized earnings for Juniper beyond next year is probably a futile task.

But while some might call Juniper expensive relative to Cisco(Nasdaq: CSCO) -- its much bigger rival -- any such direct comparison on a forward P/E basis is probably a little shortsighted. That's because Juniper carries a much smaller earnings base, having just recently turned a profit. In any case, the stock isn't cheap by any measure.

While Juniper's modest results are a positive, we'd be cautious before jumping to conclusions about the telecom carriers. That said, four quarters of consecutive sales growth looks like a trend.

Quote of Note

"Of all the things I've lost, I miss my mind the most. " -- Mark Twain

Martha's Eroding Base

The New York Times today reports that Martha Stewart Living magazine is cutting the number of readers it guarantees its advertisers by 22% -- from 2.3 million to 1.8 million. The declining readership, of course, is tied to Martha's legal trouble and all the bad press it has generated.

There's a silver lining behind the news, however. Though the ad base is being cut, the magazine is actually going to jack up the rate it charges advertisers by 6%. While that may seem counterintuitive, it's a sign the company believes advertisers -- such as General Motors(NYSE: GM), Campbell Soup(NYSE: CPB), and Johnson & Johnson(NYSE: JNJ) -- realize the true value of those core 1.8 million readers.

Despite the uniformly bad press Martha has received since her sale of ImClone(Nasdaq: IMCL) shares became public, David Gardner's Motley Fool Stock Advisor recommendation of Martha Stewart Living Omnimedia(NYSE: MSO) has returned 61% vs. the S&P's 24%. David says he thinks the case against her is rather weak, but "I also believe that the company and its products and its partners and its customer base are in fact a lot bigger and more resilient than a single mortal. And that plays to shareholders' benefit, too."

Of David's 19 monthly picks in the history of the newsletter, 14 are beating the market's return. The average return of all his selections is presently 67.9% vs. 10.1% for the S&P 500, ranking his performance among the very best in the nation. If you're looking to improve your stock-picking skills while having fun along the way, he invites you to take a six-month money-back trial.

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Napster's Back

By Bill Mann (TMF Otter)

With the apparently raucous success of Apple's(Nasdaq: AAPL) iTunes as a backdrop, music file-sharing pioneer Napster came online yesterday in test form. Its scheduled launch is Oct. 29, at which time Napster 2.0, as it's called, will offer its catalog of more than 500,000 songs for downloading at a cost of $1.00 each.

Napster went off the air two years ago, the victim of massive lawsuits from record companies TimeWarner(NYSE: AOL), Sony(NYSE: SNE), and others that accused the company of violating their copyrights by allowing users to trade music for free. Napster's Peter Pan image played well among its audience and spawned right-of-use legal arguments that continue today.

In the end, Napster, which never figured out how to make a single penny off its efforts, couldn't withstand the pressure of mounting legal bills and pulled itself off the air. CD-burning software company Roxio(Nasdaq: ROXI) bought Napster's carcass for a song, and got to work developing a service that allowed for music swapping while not falling afoul of copyrights. In fact, Roxio's proxy offers an interesting tidbit -- the company is nearly 15% owned by two record labels, Sony and Universal. So a couple of record labels have indirect ownership of Napster.

In some ways, Napster went from being the scourge of the music industry to a potential savior. What filled the void left by Napster were such file-sharing companies as Sharman Networks, owner of Kazaa, which has a distributed corporate structure (based in Vanuatu) that makes it functionally untouchable by the long arm of the law. Instead, record companies have elected to go after end users, dropping hundreds of lawsuits on grandmas and the parents of file-swapping children alike, all in an effort to deter people from theft of intellectual property.

My, how times have changed. When last seen, Napster was lead sled dog in a pack of renegades. Now, the file-sharing companies have their own trade association. Napster's re-entry as a for-pay service has bolstered the music industry's hope that it can take customers from Kazaa, Morpheus, BearShare, and other free-download companies. Mike Bebel, Napster's new CEO, put it this way: "Free means you're downloading headaches." Given the preponderance of spyware now used by these organizations and the recording industry's willingness to fight back, he very well may be right.

The hope for Napster and Roxio is that people will view a buck per song as a small price to pay not to sweat being sued by a deep-pocketed and angry plaintiff.

At any rate, record companies have spent the last two years lamenting the loss of the devil they knew. Now Napster's back, and its rebirth is viewed by many in the music industry as a reason to have a glimmer of hope at regaining control of their intellectual property.

Incidentally, while I'd love to like Roxio as an investment, I can't get around the fact that the company granted nearly 8% of its share count in employee options last year and has an automatic escalator to make the lesser of 6% or 2 million shares available for grant each year (at a current share count of 27 million, it will be some time before 2 million becomes "the lesser"). That is an astoundingly high level of dilution for an established company. Add back the cost of these options and Roxio's operating earnings from years past are a mirage -- and its fiscal 2003 loss of $0.51 gets a heck of a lot worse.

I wish 'em luck, but not with my investment dollars. Yes, this is promising going forward, but for whom?

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