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A Fox News Alert -- For Yesterday's News

Reported by Judy - January 7, 2006

What type of event deserves a "Fox News Alert"? Apparently, any event, even if it's yesterday's news.

"Bulls and Bears" opened its show on Saturday (January 7, 2006) with a Fox News Alert on the Dow zeroing in on 11,000. The market's close at 10,959 on Friday was so old that I already had read it in my morning paper by the time "Bulls and Bears" was aired. Who in the world is so interested in financial news that they watch "Bulls and Bears" would still be unaware of that?

The purpose of this "Fox News Alert" was not so much to inform as to excite -- to stoke enthusiasm for a rising stock market so that investors will remain in a buying mood come Monday.

The panel of "experts" all predicted the Dow will break through 11,000 next week. Gary B. Smith of Exemplar Capital did so without bothering to explain why he had changed his mind from last week, when he predicted a down January.

Bob Froelich, author of Investment Megatrends, predicted the Dow "absolutely, positively" would hit 11,000 next week because of the news that the Federal Reserve Board is through raising interest rates, and that the Dow would hit 13,500 during 2006.

Even Pat Dorsey, of morningstar.com, seemed bullish, expecting the Dow to be close to 12,000 during 2006. He cautioned investors that growth in earnings will be slower in 2006 than in 2005 and that they should not "make investment decisions by looking in the rearview mirror."

Tobin Smith, of Changewave Research, then uttered one of those "inadvertant truths" that Fox News personalities sometimes cannot help: "The market does not follow the economy. ... The economy is just going to be good, but the stock market is going to be better." In other words, when the bulls on "Bulls and Bears" are roaring about how great things are, they may be talking about their own pocketbooks rather than the paychecks of workers.

Gary B. Smith agreed with Tobin Smith that investors will be pouring money into the stock market regardless of earnings because many small investors don't care about earnings. "They care about missing the next big move (in the stock market). It's going to be bubble mania, which would be fantastic for me, all over again," he said.

The only fly in the ointment, according to the panel, might be oil prices.

One refreshing thing about the show -- nobody mentioned George Bush or attempted to tie the stock market to anything George Bush did last week.

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