I think the great market timer Bob Prechter had it right when he said that the stock market is a huge mirror reflecting what is going on in our society.  Some of the correlations are obvious: the Roaring '20s; the depressed '30s; the war-torn '40s, and the carefree '60s.  In the '70s, with the Nixon impeachment hearings and the subsequent fall of Saigon, America just didn't feel good about itself, and you could read it as clearly in the sickening 19-month slide of the Dow as in the headlines of The New York Times. Today as the remaining superpower, America is in love with its own stocks. This too shall pass, but it has been wonderful to feel good about our country and get rich at the same time.
 
        But there seem to be more complicated correlations as well.  I am thinking now about how the stock market reflects how we as a society process information.  Before the mid-1960s, stockbrokers and their analysts were pretty much the only source of individualized information about the investment markets, and not surprisingly, investing in anything but savings bonds was was regarded as rich man's game. (typically, women didn't get to play).
 
        Then along came a new channe of information: mutual fund salespeople who were not governed by the same culture or watched as closely by their firms.  This more grassroots outreach by the investment industry brought in millions of new investors- certainly a great step forward in the democratization of investing.  But the downside was that these novice investors had to learn the hard way how to separate hype from truth.  As a flood of new money washed into the system during the go-go years of the late '60s, and fund-of-fund hucksters brought in hundreds of greater fools, stock valuations rose to ridiculous heights. In 1972 and 1973, when the trend finally played itself out and there were no more new investors to keep the bidding up, the hucksters were suddenly exposed, and the market went into a long tailspin.

       I think something like that is happening now, but on a much broader scale. In fact, I think the current U.S. stock market mania- with demonstrably ridiculous overvaluations in the technology sector and merely strange overvaluations in multinationals- may be the first early warning sign of a major fault line in American society.

        Until about the middle of the 1980s, virtually every fact that you and I received and processed came from one of two sources: the mass media (including radio, television, newspapers, and magazines) or by word of mouth.

        This information aristocracy was (is) paternal, condescending, often antidemocratic in the sense that it decides what the rest of us should know, but at least it is governed by a fairly rigid code of ethics.
 
        This is certainly a dramatic shift in the way American (and world) society operates, and yet we haven't read it. I think that's because we in the jouranlistic profession live with that raw mass of information on a daily basis, and we kind of take for granted that it's all guilty until proven innocent.  But it seems clear, as I look at today's stock market, that most people don't have that kind of perception.  Many of these new online investors, who get their investment information from visitors at the Motley Fool Web, are getting their first taste of information in the raw, and they haven't yet developed the ability to filter it.

        The online investor has yet to develop the necessary skills to properly process -and act upon-the flood of data on the Internet.

        I think we are moving toward a new kind of society, where everybody will have to have the skills of a journalist; that is, they will have to filter, judge, and otherwise boil down all this stuff on their own, and ultimately yank a bit of sense out of the chaos that is thrown in their direction.  But what interests me now is the interim period, where those skills have not yet been developed. It is an opportunity not unlike the era that gave us the likes of Robert Vesco and Bernie Cornfield, where people can buy a small obscurce stock, spread messages all over the chatrooms about its upside potential, and then sell into the sudden uptick in the demand they've created. Essentially, we live in an era when it is possible to create your own greater fools.

        The other thing to remember about these eras is how the bastions of reason tend to crumble just when the greatest number of people are leaning on them.  The mutual funds of the 1960s abandoned with obscene speed their rigorous value orientation in favor of hot stocks while the analysts and the press began to tell the public that the "nifty fifty" stocks were underpriced at 50 times earnings. Today, every financial planner is hearing from wholesalers and other emissaries from the mutual fund world a message that is intended to be reassuring-but which has exactly the opposite effect: Our fund manager isn't going to stick with that old-fashioned asset allocation methodology now that the rules have changed. He's adapting to the market; you can reassure your clients of that.

        The new theory is that a fund has to participate in the hot sectors if its manager wants to post competitive returns. The result, of course, is not unlike when you pour gasoline on a fire; more assets flood in where there is already too much money chasing too few stocks.  Thus misinformation becomes justification for irrational behavior.  In the Scriptures there are injunctions about building your house on sand; this is more like building office buildings on air.

        So (to get to the point at last), the stock market tells me that rank-and-file investors are processing information in dysfunctional ways.  Some of the processing skills of a journalist will have to be developed by, well, just about everybody in this age of desktop publishing and global chat rooms.  When the current mania comes to its inevitable conclusion, just as the ones did in the 1920s and the 1960s, people everywhere will learn the hard way that they need this new skill because certain comfortable safeguards have been bypassed.

        Second, I think you should have a service, right there on your Web page, that talks about investing principles and serves as that missing bastion of reason when the world is going insane around you.

        My last column collected clips from the small handful of journalists who are fighting this battle. Use their statistics and borrow their phraseology-crediting, of course, the source and not republishing the articles word-for-word. When you write about the Tulip Bulb mania in Holland, post the text on your Web site for others to read, or send it as attachment to the new friends you've made at the Motley Fool. Share material among yourselves, create joint sites, and invite investors into your own Internet coffee rooms.

        Yes, this is a a lot of work, and saving the world from itself is a tough job. But some-
body is going to have to do it, and it looks as if, like it or not, you and your professional fpeers are elected- if not by history, then by the markets themselves.

        When the stock market mania ends,financial planners will be in position to assume the role of information filter for their clients