Pundits Say The Darndest Things

Upshot: The media didn't just cover Tuesday's sell-off. It promoted it.

Calling the Plays or Running Them? Eyeballed by the Net, CNNfn, and, above all, CNBC, Tuesday's selling got real-time commentary that, almost before the fact, pegged it as "a sell-off" or something like one.

Go Deep and Throw Long: On cue, stock fans rushed the field. Trouble is, markets work better at allocating capital and setting prices when investors make their decisions independently.

Quote: "[I]t's a recipe for increased volatility. So huge price swings are probably with us to stay."

Upshot: Tracking stocks are yet another corporate dodge.

What They Teach You in School: Stocks tied to the value of a particular part of a business let investors buy into only what they like.

What It All Really Means: Trackers are a popular trick for companies to goose up share price and convince investors that things are better than they seem.

We're Not Seeing Any Hands Out There: If no one knows what tracking stocks are, "why not get rid of them and let companies do a better job of explaining their true value to investors?"

Upshot: So wisdom says stocks dip when their lockup period expires? This market could give a hoot.

Watch Out for Averages: Stock prices typically fall 10 percent to 15 percent in the days immediately surrounding a lockup expiration date.

Forget Physics: But trying to take advantage of the "lockup effect" can easily backfire. Shares of CareInsite, a Web-based medical supply company, jumped $5 a share, from $72 to $77.50, on Dec. 12, the day its lockup expired. Commerce One saw its price climb $57 the day before its lockup expired on Dec. 28.

Quote: "[N]othing in this abnormal market can be expected to function normally, all the time - not even the laws of supply and demand.

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