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8:30 AM Friday, July 15, 2005: Paperwork and more paperwork. Harry's new rule: The broader your allocation, the more your paperwork and the more time you spend pushing it around. That's my excuse (and Bank of America's idiocy-- see below) for today's uninspiring (but funny) column.

As you know, I've been feeling more positive about the market. Earnings are quietly rising. And stocks are quietly rising. My allocation to equities is also quietly rising. Today's USA Today explains:

Rally breathes new life into aging bull:

NEW YORK — The stock market, all but forgotten amid investors' current fascination with real estate, has quietly rallied to its highest level in four years.

The Standard & Poor's 500 index closed Thursday at 1226.50 — its best finish since July 3, 2001 — injecting new life into an aging bull market that began in October 2002.

Notching a fresh high in the current bull is significant because it gives a psychological boost to investors, confirms that the multiyear uptrend is intact and has the potential to draw more dollars to stocks. "Making a new high is an important milestone," says Ken Tower, chief market strategist at CyberTrader.

Adds money manager Gary Kaltbaum of Kaltbaum & Associates: "Whenever you have a major stock index breaking out, you are dealing with a lot of stocks, and that is good news."

The broad advance also extends to rebounding tech stocks and shares of smaller companies, which have been leading the market for years. Thursday, the Nasdaq composite hit a 2005 high, and the Russell 2000, a small-stock index, finished close to an all-time high.

A bevy of economic indicators that are stock-market friendly has fueled the rally. The second-quarter-earnings season is off to a better-than-expected start. June retail sales came in strong. Inflation at the consumer level is virtually non-existent. Overall economic growth appears more robust than analysts expected. And interest rates on long-term Treasury notes are hovering around 4%.

All of those plusses have come as a surprise to skeptical investors, says James Paulsen, chief investment strategist at Wells Capital Management.

"All year long, we have been waiting for the economy, consumers and profits to roll over and die," Paulsen says. "But none of that happened."

The S&P is still 19.7% below its March 2000 peak, and the debate now is whether its hitting a four-year high will spark buying or result in a fresh bout of selling from investors who view this as a market top rather than a new up phase.

Optimists such as Paulsen think the ingredients are in place for more gains. He's sticking with his year-end-price target of 1325 for the S&P 500 — an 8% gain from current levels. With interest rates relatively low and earnings power still strong, stocks could benefit from an expansion in price-to-earnings multiples.

Another expected boost for stocks is greater participation from professional fund managers, "shifting from a defensive position to a neutral if not an aggressive" stance, Tower says. But even he doesn't expect a massive rally in stocks, but rather incremental gains. "For someone to buy stocks at new highs, they have to be pretty confident of what's ahead of us," Tower adds.

Another negative for stocks: The current bull market is 2.8 years old, which is two months longer than the median, says James Stack, president of InvesTech Research. "It doesn't mean the bull is ending next week, but it does suggest we are in the latter third of the bull."

Bank of America truly sucks. I can't believe how quickly Bank of America (BAC) is destroying Fleet Bank, my old bank which BAC bought. In the old days, I'd call my friendly Fleet bank manager of 20 years and he'd wire money out for me. A one-page fax and a quick phone conversation. Now I have to be physically at a BAC branch, wait interminably, be given the third degree and grovel for a wire transfer -- for which privilege I get charged an arm and a leg. BAC moved my bank manager and left his assistant, who bemoaned the new Bank of America regime with one sweet sentence, "If you had a business up here, I'd come work for you."

Don't open email attachments: That's how you get viruses. From Computerworld magazine: "On an average day, one in every 33 email messages is infected with a virus."

Birds in the tree are worth how much in the ...
Little Johnny is in school and the teacher is discussing math. She asks the class: "If there are three birds on a telephone wire and you shoot one how many birds are left?"

Little Johnny knows and holds up his hand and the teacher calls on him.

Teacher: "How many birds are left?"

Johnny: "None."

Teacher: "Well, how did you get that?"

Johnny: "When you shoot one all the rest fly away."

Teacher: "Johnny, that's the wrong answer, the correct answer is two. But I like the way you think!"

Johnny is upset because he knows his answer is right so he decides to quiz his teacher.

Johnny: "Okay, if there are three women sitting on a park bench all eating a popsicles. One woman is licking her popsicle, one is sucking on her popsicle and one is biting her popsicle. Which one is married?"

The teacher is now turning red as she ponders her response: "The one sucking on her popsicle?"

Johnny: "No, the one wearing a wedding ring. But I like the way you think."

What they do in Romania:
My father was born there. But he never told me about this:

Recent column highlights:
+ All turned on by biotech. Click here.
+ Steve Jobs Commencement Address. The text is available: Click here. The full audio is available. Click here.
+ The March of the Penguins, an exquisite movie. Click here.
+ When to sell your stocks. Click here.

Harry Newton

This column is about my personal search for the perfect investment. I don't give investment advice. For that you have to be registered with regulatory authorities, which I am not. I am a reporter and an investor. I make my daily column -- Monday through Friday -- freely available for three reasons: Writing is good for sorting things out in my brain. Second, the column is research for a book I'm writing called "In Search of the Perfect Investment." Third, I encourage my readers to send me their ideas, concerns and experiences. That way we can all learn together. My email address is . You can't click on my email address. You have to re-type it . This protects me from software scanning the Internet for email addresses to spam. I have no role in choosing the Google ads. Thus I cannot endorse any, though some look mighty interesting. If you click on a link, Google may send me money. That money will help pay Claire's law school tuition. Read more about Google AdSense, click here and here.
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