Yesterday, we riffed on the media's blow-by-blow coverage of the holiday retail season. Today, it's the Fed-watchers turn. Without delving into excessive detail, the Federal Reserve did nothing today; used the precise same language to do so; then assured investors it will keep on doing nothing for a "considerable period" of time. Nice work if you can get it.

Of course, what the Fed does and says is no laughing matter. In the short term, it moves markets -- in the long term, it arguably determines the direction of the U.S. and global economies. It shouldn't stop you from investing. Leave gambling on what the Fed will say or do, or how the markets will respond, to the professionals. It's not that they're any better at it -- just that they're not playing with our safety cash.

In today's Motley Fool Take:

Blast From Bubbles Past

If you're a fan of puzzling earnings releases, last night's report from CMGI(Nasdaq: CMGI) may strike your fancy. Early on, the release included bulleted financial metrics, including:

  • "Total Operating Loss, Improved 79%"
  • "Net Income, Up 282%"

How can posting a narrower operating deficit create a situation where profits nearly quadrupled? Well, this is dot-com incubator CMGI we're talking about. As far as rare occurrences go, this is a pretty common sighting.

Nurturing promising investments before cashing out to the likes of Yahoo!(Nasdaq: YHOO) and Time Warner's(NYSE: TWX) AOL for sizeable returns, CMGI has often turned onetime realized gains into fiscal Visine by taking the red out of operating shortcomings.

This time it was Yahoo!'s consumption of sponsored search specialist Overture that helped pad CMGI's October quarter. You can't fault CMGI. Even Coca-Cola(NYSE: KO) has a fizz-filled history of recording gains by flipping bottling operations for sport and profit. Besides, if you're going to establish yourself as a venture capitalist, what better way is there to advertise than by proclaiming your winnings from the quarterly soapbox.

But you can't value CMGI based on these paradoxically frequent onetime accounting events. Anyone that tries to tell you that CMGI has turned the corner of profitability based on last night's showing is jogging down the wrong block. However, the improved operating loss is worth noting. Before a laundry list of charges, the company posted an operating loss of $3.2 million from continuing operations. With a balance sheet flush with nearly $270 million in cash, this company isn't going away anytime soon. But is it going anywhere else?

These aren't the go-go days of the late 1990s when CMGI and fellow incubator Internet Capital Group(Nasdaq: ICGE) were tiptoeing through the tulip bulbs. While the stock's price looks lean, the company's float has put on a little weight. With more than 400 million fully diluted shares right now, CMGI may seem out of favor, but it's at a price tag of roughly $800 million.

Backing out the cash to arrive at the company's enterprise value, it's trading for just a little more than its trailing revenue over the past year. That's reasonable -- on the surface. Now, if only the company would improve its operations to the point that we could gauge it on a proper earnings multiple, too. Then this incubator would really start heating up again.

Discussion Board of the Day: Yahoo!

How did CMGI stake a meaty claim in Yahoo!'s acqusition of Overture? Well, it sold AltaVista to Overture, just before Yahoo! came a-calling. So what do you think of Yahoo! these days? Is it still the portal of choice, or is Google worth fearing? All this and more -- on the Yahoo! discussion board. Only on

Sony's Holiday Rush

An interesting bit of news has come out of Japanese consumer electronics giant Sony(NYSE: SNE) in recent days. In order to hit the stores in time for the Japanese version of the holiday rush, it appears that the first shipments of its semi-next-generation PSX entertainment console will be sold with features significantly scaled back from what the company originally disclosed.

According to a range of reports, the device's hard drive-to-DVD dubbing speed is being cut. It won't play MP3 files or CD-Rs. Perhaps most interestingly, it won't come with a broadband socket that would have allowed users to play the online games currently available to PlayStation 2 users. (Sony says many of the "missing" features will be available for download, presumably using an adapter like the PlayStation 2's, in the future. Some may be built into subsequent shipments.)

The rush to get Japanese stores stocked with the PSX (which will make its U.S. and European debut next year) highlights the pressure the game business is experiencing as it tries to regenerate enthusiasm on the downslope of a hardware cycle. Holiday season reports from retailers Best Buy(NYSE: BBY), Electronics Boutique(Nasdaq: ELBO), and GameStop(NYSE: GME) have all underscored this.

Reports have the PlayStation 3's chip coming out in late 2005. (While the PSX packs loads of new functions into the box, it doesn't advance the PlayStation system itself.) News discussing Microsoft's(Nasdaq: MSFT) second Xbox, rumored to be a multifunction machine in some ways similar to the PSX, is also starting to pick up. But we're still years away from either machine.

Given that, it's easy to understand why Sony would be eager to get PSX into stores -- it needs to put excitement back into the business. I'm inclined to dismiss the machine as an overpriced mishmash, though it will be interesting to see what form the PSX takes when it hits American stores -- and whether we're still taking about the machine in two years.

Quote of Note

"Keep your face to the sunshine and you cannot see the shadow." -- Helen Keller

News Stays Good for TI

Texas Instruments (NYSE: TXN) shares got a small bump in after-hours trading yesterday, after the company raised its fourth-quarter outlook, citing strong demand.

The chipmaker now expects to earn between $0.25 and $0.27 per share for the quarter. Excluding a $0.07 per-share gain from the sale of 32.4 million shares of Micron(NYSE: MU) stock, earnings will come in at $0.18 to $0.20, better than the previous outlook of $0.14 to $0.19 per share.

While wireless continues to drive results, the company confirms it is seeing strong demand "across a broad range" of semiconductor products. As a result, it expects semiconductor revenue between $2.33 billion and $2.44 billion, rather than $2.185 to $2.365 billion.

Overall, total revenue will come in between $2.64 billion and $2.77 billion, up from its previous guidance of $2.49 billion to $2.70 billion.

Management also updated its guidance for other segments. The company now expects sensors and controls revenues of $245 million to $255 million vs. prior expectations of $235 million to $255 million. However, TI lowered the top end of its educational and productivity solutions revenue; the company now expects $70 million to $75 million for the quarter, instead of $70 million to $80 million.

Texas Instruments shares have doubled off their January lows, thanks largely to strong wireless demand. But it's the improving performance across other lines that could support TI at today's prices.

Shameless Plug: Stocks 2004

Of the stocks highlighted by our proud stock analysts in last year's Stocks 2003, Tom Jacobs took the cake with his pick Ligand Pharmaceuticals(Nasdaq: LGND). Return to date: a tad under 140%. Can Tom make it two years running? Who cares? The point is, there are real great treasures inside. Even if you don't invest, Stocks 2004 is just plain good reading. Give it a spin and get in on the action.

More Fool News

For all today's stories, see Today's Headlines.

And Finally...

We certainly hope all are having a good year in the market. After all, it's about time. Envy gets us nowhere, but don't we all wish we were Tom Jacobs? Find out why and how he's Crushing the Market in 2003. As some guy in some movie once said, it's only money, but it's our only money! As Dayana Yochim once said, He Spends, She Spends. Hey, click on that! How else are you going to find out what that means, and why you should care?

Bob Bobala, Robert Brokamp, Paul Elliott, Mathew Emmert, Jeff Fischer, Jeff Hwang, Tom Jacobs, LouAnn Lofton, Alyce Lomax, Bill Mann, Selena Maranjian, Dave Marino-Nachison, Rex Moore, Rick Munarriz, Reggie Santiago, Dayana Yochim