Spitzer investigation and, 351, 352
stock option hearings and, 124, 127–34
Sunbeam and, 180, 181
Securities Industry Association surveys, 334
Seidman, Bill, 21, 88–89, 90, 93–94, 142
semiconductor industry, 257–59
Senate Banking Committee, 147–48
Senate Subcommittee on Securities, 123, 124, 131–42, 343
September 11 (2001) attack, 311, 351
SGGDX (gold fund), 444n.35
S.G. Warburg. See UBS Warburg share buybacks, 51, 132–36, 177–78, 277–79, 416–17n.20, 425–26nn.28, 29
shareholder suits, 146–49, 229
share prices. See stock prices
Shearson Lehman, 62, 74, 82, 128, 240, 413n.18
Sheehan, Fred, 165
Shelby, Richard, 131, 132, 140–41, 142, 343
Shiebler, William, 222, 223
Shiller, Robert, 68–69, 245, 246–47, 423n.49
Short History of Financial Euphoria, A (Galbraith), xxii, 12
short selling, 54, 55–58, 65, 91, 196, 278
process of, 55
research value from, 178, 181
short-term interest rates. See interest rates
Shulman, David, 245, 246
Siegel, Jeremy, 42, 360, 406n.18
Siegel, Laurence, 225–26
Silicon Graphics, 429n.42
Silicon Valley. See technology stocks
Simmons, Rick, 9–10
Skilling, Jeffrey, 157–58
Sloan, Allan, 170–73, 193–201, 263–64, 315, 322, 346, 457n.7
small-appliance industry, 179, 190
small-cap markets, 205, 305, 408n.25
Smart Money, 167, 168, 222, 305
Smilen, Ken, 7
Smith, Adam, 373
Smith Barney. See Salomon Smith Barney
Smithers & Co., 453n.18
Social Security Trust Fund, 31, 117
inflation-adjusted benefits, 109, 396
proposed investment in stocks, 249, 263–65
as safety net, 119, 265
SoGen International Fund, 212, 213–16
Solotar, Joan, 456n.15
Soros, George, 189, 281, 366, 374
Sosnoff, Martin, 447n.32
Southeast Asia, 259, 355, 377
Sperry & Hutchinson, 43
Spitzer, Eliot, xx–xxi, 349–52
Sprint, 276
Squawk Box (CNBC program), 17, 30, 155–58, 180, 304, 310, 432–33n.22
Stamenson, Michael, 20
Standard & Poor’s 500, 3, 46, 50, 54, 58, 72, 117, 125, 209, 210, 232, 286–87, 289, 295, 300, 364, 401n.20
AOL addition to, 23, 296
bear market’s beginning, 317
bond performance compared with, 231
buy-and-hold strategy and, 45
earnings report (1994), 14
fund managers’ picks and, 23–24, 301–3
indexed mutual funds, 20, 333
inflation and, 109
mutual funds’ pacing with, 210, 227–28
negative inflation-adjusted capital gains, 6
operating earnings reports, 257–58, 271, 273, 275, 363
overvaluation and, 305, 389
real return (1971–81), 163
641 percent rise (1948–68), 405n.1
“strong” and “weak” cycles (1882–99), 4–5 26 percent rise (2003), 387
upward climb of (1995–98), 26
Yahoo! addition to, 296
Stanley, David Kim, 288 “Stewart” (Ameritrade commercial), 18
Stewart, James, 76
Stewart, Thomas, 278
stock market crashes. See under crash
stock market cycles. See market cycles
stock options, 52–53, 110, 123–49, 197, 243
CEOs as primary recipients, 276, 278
Cisco and, 207
congressional hearings on, 123–43, 343
as corporate tax shelter, 125, 138, 276–77
costs to shareholders, 132–36
as earnings inflation means, 273, 276–79, 389
stock options
outstanding shares, 145, 276, 277, 428–29n.42
profits and, 276–79, 280, 343
share buybacks and, 132–36, 278, 425–26n.29
theory behind, 278
valuation of, 427–28n.36
value of nonexercised (list), 145, 428–29n.42
stock prices
analysts’ impact on, xvii, xviii–xxi
annual real returns, 5–6
bond comparison, 231, 356, 357–59, 359, 367
brand names and, 28, 209, 210, 301
buybacks and, 51, 132–36, 425–26n.29
buy low/sell high approach, 43–44, 204
call options and, 138–39
CNBC reports and, 156
demand-driven, 12, 15, 21, 23, 41, 122, 154, 234
dividends and, 378–81
earning misrepresentations and, 270–75
earnings estimates and, 165, 182, 206
efficient market theory and, 68–69, 282
experienced vs. amateur traders and, 24, 108–13
gambling mentality and, 30, 112, 115
GDP growth and, 214
at Great Bull Market beginning, 49
in Great Bull Market’s first phase, 59, 62
hot mutual funds and, 23–24
index funds and, 209
inflation and, 45, 49, 109, 322, 396, 408n.25
inflation/”real returns” relationship, 407–8n.23
insider trading and, 75, 318–19
interest rate cuts and, 86, 93, 286, 328
IPO effects on, 25, 100
late 1998 surge, 286–87
liquidity effects on, 74, 77
long-term returns, 356, 359, 361, 363–64, 423n.49
margin requirements and, 244, 251, 322, 460n.13
market cycles, 2, 3–16, 173–74, 215, 249
market leaders, 23–24, 289, 301–3
market rebound (2003–04) and, 388–89, 393
media effects on, 164, 168
momentum investing and, 202, 203–16, 228, 301
“Nifty Fifty” demand and, 41, 43, 406n.18
paper gains, 393
performance (1961–81), 35–47
plebiscite analogy for, 20–21
productivity revolution and, 32
projections, 264–65, 364
put options and, 279, 281–82
return percentages, 5–6
short selling and, 54, 55–56
stock options and, 124, 125, 132, 139, 145
takeovers and, 51, 53, 54, 75, 76
timing and, 7, 35–44, 173–74, 192, 215
2003 percentage gains, 387
value investor and, 43, 204, 212–16
See also Dow Jones Industrial Average; Nasdaq; overvaluation; Standard & Poor’s 500
stocks
age/incomes of purchasers, 45–46, 114, 115, 333–34, 477–78
Asian crisis, 259–60
basic difference between bonds and, 423n.49
“dating but not marrying,” 390
democratization of, 19, 20–21, 30, 31, 108, 299
financial euphoria and, 18–19
impossibility of return projections, 265
mid-1990s true believers in, 167–71
predicted death of market for, 45–46
purchase impetus (1990s), 115, 430n.3
real asset investments and, 354
retirement plan purchases of, 23, 31, 104–5
Social Security investment proposal, 249, 263–65
Strangfeld, John, 10
Strategic Fund, 313–14
Street Seep (CNN program), 11
Strumpf, Linda, 241
“sucker” rallies, 366, 390
Sunbeam, 157, 178–81, 189–90, 270
SunGard Institutional Brokerage, 4–5, 341, 388
Sun Microsystems, 28, 205, 259, 302
Sunrise Securities Corp., 404n.33
Sununu, John, 94
Supermarkets General, 74
Swisher, Kara, 194, 198
takeovers. See mergers and acquisitions
Taleb, Nassim Nicholas, 188, 189, 283–84, 285, 368, 369
tax cut, 328, 329, 392
tax-deferred plans, 104, 105, 118
tax-exempt bonds, 59, 62
taxpayers, 75, 94
tax shelters, 125, 138, 276–77
technological advances
as bull market impetus, 14, 32, 280
consumer vs. investor benefit, 25–26
“innovative” financing, 281–82
productivity and, 255–58
value assessment difficulty, 256
technology stocks, 25–27, 50–51
bear market prospect, 327
excess capacity and, 258–62, 329
fund managers’ picks, 218–19
hedge funds, 281
independent analysts on, 182
individual investors and, 106, 121, 234, 338
insider selling of, 319–21
March 2000 downward slide, 324–25
Meeker and, 97, 98, 349
momentum funds and, 204, 205, 214, 301
as 1990s “Religion Stock,” 303
overvaluation of, 133, 303, 305, 306–7
put options and, 279, 281
Quattrone and, 98–99, 325–26
stock options and, 131, 133, 134, 139, 142, 243
value investor approach to, 213
Vinik and, 226, 227, 229, 230
zero capital costs and, 361
See also Internet stocks
Teitelbaum, Richard, 119–20
telecom sector, 257, 273, 319–21
television. See media; specific outlets
Templeton, John, 187, 232
Templeton Funds, 232, 439n.32
Texas Instruments, 41, 259
Textron, 340
Thailand, 355, 377
TheStreet.Com, 154, 159, 162, 166, 184
Third Avenue Value Fund, 176
Thiruvadanthai, Srinivas, 273
Thomas, Lee R., III, 377–78
Thomas, Michael M., 413n.18
Thompson, Morley, 57
Thurow, Lester, 136
TIAA-CREF, 105, 111, 112, 427n.36
Tice, David, 24, 25, 177–81, 182, 261, 315, 342, 375
AOL stock and, 196, 458n.7
on mutual fund overlap, 302
Sunbeam analysis, 178–81, 189–90
Time (magazine), 170, 201, 289
Time Warner, 28, 210, 305–6, 387. See also AOL Time Warner
TIPS, 374, 383–84, 422n.44, 469n.62
disadvantages of, 396
tobacco industry, 30, 144
Tobias, Andrew, 7
Tolleson, John, 429n.42
trade deficit, 394–95, 396
traders, 64–67, 82, 96, 341
Transitron and National General, 40
commission-free purchase, 358
foreign investments in, 394
golden period, 359
interest rates, 52, 93, 118–19, 391
long-term, 59, 227
as poor investment in 2003, 371
returns on, 76, 85, 118–19, 173–74, 231, 356, 357–60, 359, 367, 423n.49
thirty-year, 118–19, 423n.49
three-month, 85
Treasury bills, 224
Treasury Inflation-Protected Securities. See TIPS
Treasury paper, 252
Trebek, Alex, 161
T. Rowe Price, 112, 196
Truell, Peter, 298
Tucci, Jim, 334, 339
Tully, Daniel, 429n.42
TWA, 178
Tweedy, Browne Company, 212
Twentieth Century Vista, 209
Tyco, 26, 178, 308, 343
UAL Corporation, 75–76
UBS Global Equity Fund, 314
UBS PaineWebber, 312–14
UBS Warburg, 228, 229, 262, 304, 327, 346
unemployment. See downsizing and layoffs
United Airlines, 75–76
United Healthcare, 145, 428n.42
USAA Aggressive Growth Fund, 167–68
USA Today, 198, 298–99
U.S. News & World Report, 26
U.S. Surgical, 126
U.S. Truck Lines, 43
UT, 26, 27
Utkus, Stephen, 337
Vagelos, Roy, 429n.42
value, xx–xxi, 13, 19–22, 62, 234
as book minus liabilities, 69
bubble prediction (2004) and, 389
buy-and-hold strategy and, 7, 22–24, 42
corporate real assets, 52–53
fund managers and, 219
generational approach to, 13, 28, 37, 306
“intrinsic” concept, 21, 213, 216
momentum investing vs., 202, 203–16, 228
price/earnings ratio and, 69, 70, 406n.18
productivity factors, 255–56
rarity and, 378
real world vs. perceived outcomes, 19–20, 42, 406n.18
short selling and, 54
stock options and, 125, 427–28n.36
See also overvaluation
value funds, 23, 176
momentum funds vs., 203–16
value investors, 43, 55, 63, 87, 137, 204
market cycles and, 214, 215, 327, 354–55, 363
as market timers, 192, 213, 215
2003–04 rebound and, 389, 390
Value Line Investment Survey, 106, 185
Vanguard, 264, 334, 336, 340, 439n.32, 448n.40
Vanguard Center for Retirement Research, 337
Vanguard Inflation-Protected Securities Fund, 383
Van Wagoner, Garrett, 204, 205, 209
“vapor money,” 208
variable rate loans, 393
Vaulx, Charles de, 216
vendor financing, 272–73, 280
venture capital, 99
Veritas, 302
Vinik, Jeff, 226–31, 232, 308, 341
Vinik Partners, 231
virtual revenues, 272, 276, 280
Volcker, Paul, 91–92, 408n.30
Waddell & Reed Financial, 308