Here we sit today with big cap stocks now lower in price than they were four years ago. The numbers don't lie. The Dow Jones Industrial Average is well below its 2000 high. In fact, the DOW is down about 200 points this year, and it's starting to look like another down year for stocks (as I predicted in my forecast at the beginning of this year).

Investors who placed their money in big-cap mutual funds and took the "sit and wait" approach have lost money four years' running. The bottom line is that $1,000 invested in the DOW stocks in 2000, in the biggest companies in the world, is worth less than that amount today.

My purpose in these PROFIT CONFIDENTIAL e-mails is not

to be continuously bearish. I'd rather be bullish. My purpose in these commentaries is to weed through all the economic data that is released daily to find the real direction of the economy since our investments are so easily affected by the changing financial environment around us.

By nature, I'm very skeptical about the analysis of economic and stock market news because I believe the majority of analysts that cover the markets are either working on different channels (is the purpose of Wall Street firms not to sell stock?) or simply not trained to analyze the data correctly.

Friday's news release by GE is a case in point. Market goers follow GE because its diverse businesses are a great indicator of the economy. GE is a huge, well-managed conglomerate. It's still the world's biggest public company in terms of market cap, worth about $340 billion. Company sales last year were $134 billion.

So when GE came out on Friday and said its net income grew by 3%, and CEO Jeff Immelt was quoted as saying, "This is the best economy we've seen in years," the market yawned. Why? I'll tell you why. Because, despite the lowest interest rates in 46 years, despite an increasing money supply, despite reports of job growth earlier this year, despite the analysts telling us the economy is doing so well Greenspan "has to" raise interest rates to cool the economy, GE's earnings are telling us profit growth in this economy just isn't there.

Yes, GE reported a 3% increase in net income. But a closer look at GE's earnings reveals GE's provision for income taxes fell in the second quarter of 2004 compared to the second quarter of 2003. If we look strictly at net earnings before income taxes, we see GE's earnings before taxes actually fell 5.4%.

The reality is simple: The biggest market cap company in the world, through its pre-tax earnings, is telling us that, despite the best monetary conditions in decades, it made more money in the second quarter of 2003 than it did in 2004. This supports my general observation that this economy is doing much worse than the analysts and media would have us otherwise believe.