Rick Aristotle Munarriz thinks the housing market is a bit overheated. Dayana Yochim thinks Rick may be right, but that consumers should base their conclusions on their own personal circumstances. Bill Mann doesn't know, but he's fairly certain that somebody, somewhere in the sector is up to no good.

Which reminds us: At least one notable won't likely turn up at this Sunday's open house. This afternoon, Martha Stewart was found guilty on all counts in her widely followed conspiracy and securities fraud trial. Sentencing is set for June.

In today's Motley Fool Take:

Ma rtha, Martha, Martha

By Paul Elliott (TMF Rael)

Back in the day, the mighty Aesop toiled in obscurity, creating stories that not only fascinate the kids but also teach a valuable lesson. That's a lot to ask, even when you get to make the stuff up -- what are the odds that such a story drops from the heavens?

Well, one did today, right along with the other shoe in the Martha Stewart-ImClone Systems(Nasdaq: IMCL) debacle. It's a story of avarice, greed, manipulation, bad manners, and more than anything, irony. Today's big news is that, after having seemingly been granted a reprieve when the most serious charge was dismissed last week, Stewart was found guilty on all remaining counts in her now infamous obstruction of justice case.

Now for the irony, and it gets thick. The nightmare began back in Dec. 2001, when, on hearing from her broker that then-CEO Sam Waksal was selling stock (Waksal himself had heard that bad tidings were a-brewing at the FDA over cancer drug Erbitux), Stewart dumped some middling number of ImClone shares. The price? Somewhere in mid-$50s. The irony? After a harrowing ride to the single digits, ImClone closed today at around $47.50, within a hair of its 52-week highs.

The lesson? Well, there's the obvious "Don't break the law if you don't want to go to jail" (and for heaven's sake, don't tick people off by lying about it afterwards). Then, there's the infinitely more subtle "Don't buy or sell stocks on rumors." See, for Wall Street at least, the irony is just getting started.

If you recall, just last month, shares of ImClone plunged more than 25% one afternoon before the stock was halted on news pending. The halt related, not to the sudden sell-off, but to the FDA's decision on the resubmitted application for our old friend, cancer drug Erbitux. Bad news, right? Wrong. Unbelievably, given the market "pre" action, the drug was okayed. When the stock reopened for after-hours trading, it promptly recouped all the lost ground and then some. Ouch.

We bring this up now because today shares of Martha Stewart Living Omnimedia(NYSE: MSO) soared more than 15% in early trading. Trading, that is, before the stock was halted for, you guessed it, news pending. Out comes the guilty verdict and down goes the stock -- from a midday high of $17 to a close of $10 and change. Much as one hates to say "It serves them right" when livelihoods are involved, you have to wonder what all these people are trading on -- and why.

Don't buy or sell stocks on rumors. After all, if you're trading on reliable, material inside information -- well, you don't want to do that. If you're trading on rumors of dubious origins and accuracy -- well, you don't want to do that either. We'd all prefer that nobody have to go to jail, but talk about a great parable. Thanks, Martha.

Paul Elliott is editor of Tom Gardner's Motely Fool Hidden Gems and owns shares of ImClone (though it wouldn't make it as a Hidden Gems recommendation in a million years). You can email him directly.

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Ti Vo Goes Hyper

By Alyce Lomax (TMF Lomax)

TiVo's (Nasdaq: TIVO) stock hit fast-forward today after it narrowed its quarterly loss, reported rockin' subscriber numbers, and outlined an aggressive plan to capture more of the budding digital video recorder (DVR) market. Investors bid the stock higher, banking on this pivotal time as increased competition shows just how much DVRs are catching on.

Net loss in TiVo's fourth quarter was $12.4 million, or $0.18 per share, compared to a loss of $32.5 million, or $0.56 per share, in the same quarter last year. Without one-time items, that loss would have been $7.9 million, or $0.12 per share. Revenues, clearly benefiting from a holiday season when TiVo was clearly at the top of many lists, revved up 85% to $42.6 million. In the quarter, the company added 330,000 subscriptions.

Perhaps most encouraging is that TiVo's subscriber base now stands at 1.3 million, more than double that of last year.

A Motley Fool Stock Advisor pick, TiVo shook things up recently when it announced its voyeuristic, though anonymous, tendencies -- then announced a deal with Nielsen to track TV watching habits. In the company's conference call (transcript courtesy of CCBN StreetEvents), management said it continues to grow its advertising business, signing on heavyweights like Coca-Cola(NYSE: KO).

TiVo said it plans $50 million in subscription acquisition spending over the next year, aiming to more than double subs to 3 million by the end of the fiscal year. It aims to reach sustained profitability by the end of next year. In addition, it boasted $143 million in cash, its highest amount in three years.

While there is a lot to be excited about, this just may be the proving ground. The economy seems to be improving, and many consumers are ready to have some fun again. Services like TiVo, XM Satellite Radio(Nasdaq: XMSR) and Sirius(Nasdaq: SIRI), and Netflix(Nasdaq: NFLX) are gaining traction as more people sign on and spread the word.

However, cable operators have certainly seen the future in DVRs, and companies like Comcast(Nasdaq: CMCSA)offer similar services, hoping to capture people through convenience and ignorance to the TiVo brand.

TiVo's least expensive model is now available for $149 (including a $50 rebate), another aggressive move to bring more curious consumers into the fold. And TiVo plans for a return to television advertising have hit the news, what many people consider a key move in getting the brand into living rooms.

As much as certain threats still loom -- whether the company can withstand competition and ramp up more widespread adoption, and how privacy concerns stack up -- TiVo's making the right moves at a crucial time.

Alyce Lomax does not own shares of any of the companies mentioned.

Di scussion Board of the Day: Parents and Expecting Parents

Are you a kid at heart or do you need some help picking out the perfect toys? What are the best playthings for babies and toddlers? What do you need to know about choking hazards? All this and more -- in the Parents and Expecting Parents discussion board. Only on Fool.com.

Intel Insomnia

By Tim Beyers

Intel (Nasdaq: INTC) announced after the bell yesterday that it expects to book between $8 billion and $8.2 billion in revenue for the first quarter, narrowing its previously reported range of $7.9 billion to $8.5 billion. The revised numbers lower the midpoint of Intel's guidance, from $8.2 billion to $8.1 billion. Investors weren't happy with the news, sending its shares down by almost 2% in morning trading.

According to published reports, Intel CFO Andy Bryant has suggested that rising inventories among PC manufacturers and weaker-than-expected demand in Japan and throughout Asia were responsible for the shortfall. Intel also said its first quarter is seasonally weak.

Should shareholders be worried? Probably not. Even with its revised guidance, Intel will grow revenue 20%, in line with global semiconductor sales. (Intel booked $6.75 billion in revenue during last year's first quarter.) The company also closed 2003 with more than $13 billion in cash and an authorization to buy back more than 400 million of its outstanding shares, which should keep per-stub earnings on the rise.

That's not to say Intel doesn't face difficulties. After I wrote about Intel's unprecedented move to follow rival Advanced Micro Devices(NYSE: AMD) into the market for combination 32-bit/64-bit chips, my inbox was flooded with mail from Intel doomsayers.

The best argument came from a reader who pointed out that Intel is far from dominant in supplying chips for lower-end 64-bit servers, where competition comes from AMD's Opteron chip, Sun Microsystems'(Nasdaq: SUNW) SPARC, and the PowerPC G5 from Apple Computer(Nasdaq: AAPL) and IBM(NYSE: IBM). And then there are the published reports that Intel's Itanium 64-bit chip -- co-created with Hewlett-Packard(NYSE: HPQ) -- has fallen far short of expectations.

Former Fool Tom Jacobs used to say that every investor's portfolio should contain a good mix of "sleep at night" stocks -- large, dominant companies that are likely to offer some modest growth. I used to consider Intel a model "sleeper" stock. Now I'm not so sure.

With competition heating up and now revised guidance, Intel investors may find themselves with a slight case of insomnia.

Motley Fool contributor Tim Beyers wonders if there's a chip for curing insomnia. He could have used it last night. Tim has no stake in any companies mentioned here.


ote of Note

"If you were plowing a field, which would you rather use? Two strong oxen or 1024 chickens?" -- Seymour Cray, the father of supercomputing

Mo re on Fool.com Today

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