Don't be happy; worry.

The Dow Jones Industrial Average is up 46% since March 9, when the world itself seemed to be coming to an end. In the entire 113-year history of the Dow, only six rebounds have been bigger and faster. But the swiftness and magnitude of this bounce-back aren't reasons to be cheerful; they are reasons to be cautious.

In March, stocks traded as low as 11.7 times their average earnings over the previous 10 years, adjusted for inflation, according to finance professor Robert Shiller of Yale University. That put the market at its lowest valuation since January 1986. Today, however, stocks are selling at 18.4 times Prof. Shiller's measure of earnings. That isn't only up hugely from March but is above the long-term average of 16.3 times earnings.

Robert Rodriguez, chief executive of First Pacific Advisors in Los Angeles, says that in March, investors feared getting crushed in a further decline. Now all they seem afraid of is missing an even greater rally.

Mr. Rodriguez is convinced that the consensus -- economic recovery by early next year at the latest -- is wrong. "People are talking about whether the shape of the recovery will be a 'V' or a 'W' or even a 'square root,' " he says, "but I think we are in what I call a 'caterpillar economy.' It will be up and then down, up and then down. We will be far from normal for a very long period of time. People deploying capital will end up destroying capital."

I am not as worried as Mr. Rodriguez, but it is at times like these, when a rising market sweeps our spirits up with it, that investors need to evaluate their emotions and consider whether their beliefs and actions

GENEVA (AP) -- Airline companies lost more than $6 billion during the first half of the year due to the economic crisis, even as fresh figures showed some signs of recovery in the passenger and freight business, an industry group said Tuesday.

A sample of more than 50 airlines found their losses declined to $2 billion in the second quarter from $4 billion in the first quarter, the International Air Transport Association said, noting that the April-June period is usually a strong one for the industry.

"Since the sample of airlines is incomplete, total industry losses in the first half of 2009 are likely to have been in excess of the reported $6 billion," IATA said.

The Geneva-based group, which represents 230 airlines worldwide, said seat occupancy in international markets stabilized in July -- the first time in over a year -- but added that airlines need to further cut capacity to meet demand.

Freight capacity also still exceeds demand despite an 8.1 percent capacity cut in July, IATA said.

"With excess capacity continuing through Q2 it was not surprising that freight rates were down more than 20 percent over the year," it said.

Overall, the industry outlook remains volatile, IATA said.

Airlines are still adding to their fleet because of long-term orders committed to before the downturn.

NEW YORK (Reuters) - EBay Inc plans to sell a 65 percent stake in its online phone unit Skype for $1.9 billion to private investors including Silver Lake and a venture firm run by the Netscape co-founder Marc Andreessen.

The deal values Skype at $2.75 billion, down from the $3.1 billion the Internet auction house paid for the popular service in 2005.

The group buying Skype includes London-based Index Ventures and the Canada Pension Plan, in addition to Silver Lake and Andreessen's firm Andreessen Horowitz.

The deal leaves to eBay focus on its PayPal electronic payments service as well as its flagship auction service, the company said. It also avoids the risks of a initial public offering eBay had slated for Skype next year.

Susquehanna Financial Group analyst Marianne Wolk said the valuation was at the high end of her expectations.

"It eliminates the risk of the planned IPO and is a better price than many of us expected," Wolk said, adding that the valuation is about 24 times her estimate for Skype's 2009 after-tax earnings contribution to eBay or 4 times her revenue estimate.

John Donahoe, eBay's chief executive, had said in May that a $2 billion valuation would be low for the growing Internet telephone business amid speculation about a potential sale of the company to private