Good trend: Indiana's public companies are doing well, overall, in a challenging environment.

• Author: Patton, Mark
• Position: Indiana Public 100 - Brief Article

We've come to the end of the second year of one of the worst bear markets ever seen in U.S. stocks. By any measurement, the magnitude of losses incurred by investors the past couple of years competes with that of the '73-'74 correction. And in some pockets of the market--the obvious being technology and communications--the losses rival that of the 1929 crash and the Great Depression that followed.

Just as there have been pockets of weakness in the market, there have been pockets of strength, and many Indiana stocks have provided that bright spot for investors. Consider that the Inside Indiana Stock Index, which tracks the performance of all Indiana stocks, is up nearly 15 percent year-to-date while all of the major market indexes are down. This strength continues the trend of 2001, when the index surged more than 18 percent.

This all sounds good today, but what must be remembered is the disappointment that had been felt during the late '90s when Indiana stocks lagged behind the rest of the market. This was a time when tech stocks surged and Indiana was without any major tech leaders. Sometimes in the market the turtle wins the race.

During the past year, several national headlines dominated the attention of investors at one time or another. The impact of these headlines, starting with the first recession in more than a decade, was certainly felt by Indiana investors. It wasn't until late in 2001 that the U.S. government officially reported we were in the midst of a recession that actually began much earlier in the year, but investors in stocks such as Columbus-based Cummins did not have to wait so long for this news.

Cummins is a classic example of an economically cyclical company that began showing signs of the slowing economy in the second half of 2000, six to nine months prior to the start of the recession. Revenue at this multibillion-dollar organization has fallen more than a billion dollars, or just under 20 percent, and the bottom line has been marked with red ink instead of black.

With Indiana's large manufacturing economy, Cummins is certainly not the only company facing the challenge of a slowdown. This list unfortunately includes several companies such as Lafayette's Wabash National, Elkhart-based electronics manufacturer CTS Corp. and Delphi-based Chromcraft Revington, all with year-over-year revenues falling double digits.

A story our country will never forget is September 11th. The impact of the events on this day were felt...