People will often say anything simply to believe that it's truth. The financial markets are no exception. Case in point: I'm watching television the other night and, as usual, the financial pundits are screaming. It's a bull market, they say. You've got to be in the market now because the next upswing is going to be as big — if not bigger — than the last one. Never mind that the market was heading south, or that corporate earnings jitters and ethical lapses are blanketing stocks with a heavy fog, or that the Pakistan-India conflict is creating an increased climate of fear. With all of this, who in his/her right mind could have confidence or gain clarity about a future bull market?

If anything, the market could be described — as it sometimes has been — as a "stealth bull market." But, what does that mean for those of us at the back of the class? The distinction is this: a bull market is any market in which prices (in this case, stock prices) exhibit a sustained upward trend. A bear market is any market in which prices exhibit a declining trend, particularly for a prolonged period, usually falling by 20 percent or more. Simple enough.

A "stealth bull market," however, is a bit fuzzier. It can show few, if any, market signals of a rising tide. The markets can remain choppy, even flat, and market volume can be relatively low. And the predominant news — company news, in particular — often remains bearish.

What's different in a "stealth bull market" are at least two additional, although often overshadowed, items. First, the economic news — specifically, forward-looking leading economic indicators — is usually positive; it points toward even better times in the future. And, second, specific off-the-radar companies — often companies that do well in good times or bad — show continued company growth and correspondingly stable and upward -trending stock prices.

In this market, we have examples of both. On the economic front, job-loss claims have just slipped below the 400,000 mark for the first time in 2-1/2 months. The 400,000 mark is the benchmark for a lackluster economy. Less than that means things are improving; more than that, things can look grim. Although overall unemployment remains at roughly 6 percent, indicating that corporations may still not be in hiring mode, it appears the worst of the job-loss news may be behind us. Additionally, selective retail data indicates that consumers, while certainly cautious, remain active in the economy. As evidence, Wal-Mart, the world's largest retailer, posted a 6.2 percent increase as strong sales of groceries and household products offset sluggish demand for seasonal merchandise. Analysts had expected only a 4 percent rise.

While manufacturers also look to be picking up steam in terms of output and productivity, perhaps the strongest voice of all confirms that bullishness might finally be an appropriate emotion. Fed Chairman Alan Greenspan had this to say recently: "I suspect the American economy is in an upswing — it's not going to be a dramatic upswing…but events look increasingly positive." That's good enough for me.

What all of this adds up to, in dollars and "sense" and stock picks, is that selective investors who look at the market from a long-term perspective can still find a few good stocks. In fact, if the theory behind a "stealth bull market" holds true, finding such good stable companies when market conditions are fuzzy only improves the possibility of their stock prices rising as the rest of the market's conditions improve. Lord willing...

Two companies might be worth checking out. The first sells something near and dear to our hearts: coffee. Specifically, Peet's Coffee (PEET). It's a no-brainer that, good times or bad, few of us are going to be able to kick our addictions to lattes and mochas.

Starbucks proved coffee could be big business and a blockbuster stock. Peet's Coffee, a staple of coffee lovers on the West Coast, although far smaller than Starbucks, operates under the same proposition. Moreover, with much consolidation in the gourmet food space, a good small ($200 million market cap) profitable company such as Peet's makes an appetizing target.

The basics on Peet's are as follows: Although earnings per share for the past 12 months was $0.23, estimates for this fiscal year are $0.38; sales rose 8 percent in the most recent quarter to $24.5 million, and its price-to-sales ratio of 1.54 (again for the trailing 12 months) looks attractive. Earnings-per-share in the most recent quarter were $0.05, and analysts rate it with four Buys and one Hold. Most importantly, given the jobs discussion above, according to a close friend — the company is hiring, which is always a good sign.

The second company that looks appropriately under, if not off the radar, is Atlantic Coast Airlines, Inc. (ACAI). An airline in this market? One that fits this model — smaller planes, short hops, an out-sourced vendor for several of the larger carriers — yes! Atlantic Coast Airlines is basically a regional airline serving 64 destinations in 28 states in the Eastern and Midwestern United States and Canada, with 760 scheduled non-stop flights system-wide every weekday. While the airline industry has been hit hard since 9/11, shorter routes have rebounded well; good news for ACAI.

The company now operates under its marketing agreements as both a United Express carrier with United Air Lines, Inc. and as a Delta Connection carrier with Delta Air Lines, Inc. And, business is good. For the three months ending 3/31/02, revenues increased 30 percent to $173 million while net income increased 49 percent to $14.3 million. And, while EPS for the trailing 12 months was 85 cents, analysts expect EPS for this fiscal year to rise to $1.21 and, next year, to $1.49. As a result, the Street maintains Four Strong Buys, Two Buys and Two Holds. That's good enough for me.

Although no market, especially a "stealth bull market," has any sure things, appealing opportunities do still exist. And, if they look good now, they will only look better if the remaining conditions for a full-on bull market truly reappear.

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