This stock market is hot, hot, hot, but broad-based it's not. Advances are concentrated in a handful of sectors, particularly big techs, banks, and drugs. This is largely the result of radical misinterpretations of the impact of Southeast Asia on the US economy overall and on particular sectors. Analysts, confronted with a crisis, kept "painting inside the lines" in projecting results, thinking that the sky was falling, pushing stocks way below where they should have been last fall..

Sneak attacks, in the form of takeovers and reorganizations, are pumping up oils and drugs as well. And mellow interest rates are helping financial stocks. The Fed is on hold as the Goldilocks economy stands poised between inflationary pressures from a tight labor market and robust spending and the big wet Southeast Asia blanket, at least according to Alan Greenspan. So what does all this tell us? As we said last fall, opportunity is created out of chaos. And the herd is often wrong. The mass opinion of analysts, as well as the individual opinions of would-be gurus-of-the-week, often miss the mark entirely. If you run with Chicken Little, you'll lose your head.


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