EFFICIENT MARKET WORKS STRANGELY

It’s a funny world out there: Fidelity Investments reported revenue up 15% in 1998, but earnings down 17%; Charles Schwab Corp. announced its quarterly profit had more than doubled, even better than predicted, and its stock fell 15%.

J.P. Morgan & Co. more than doubled its earnings to $3.01 a share from $1.15, surprising analysts everywhere. Its non-.com stock sailed right along, even gaining a couple of percentage points.

Donaldson Lufkin & Jenrette Inc., despite a big push into cybertrading, saw its profits drop 9% in the first quarter on flat revenues.

Fidelity’s top line was up almost a billion bucks to $6.77 billion, but the take-home was down to $445.7 million from $535.6 million. A spokeswoman said a bunch of the money went to prepare computer systems for 2000 and to improve the Internet trading system, which averaged 54,000 trades a day last year.

“We haven’t had the service outages some of our competitors have,” she observed.

Schwab, undeterred by more than its share of such outages this year, reported a record 192,000 online trades Monday and averaged 160,000 a day in the winter quarter.

It also reported a $142.9 million bottom line, up from $68 million and is looking for 1,000 new employees to help handle all the new customers. Its stock has soared 50% or so in the past couple of weeks so a 15% hit is practically a love tap.

Dough’s up

* Goldman Sachs Group LP upped the ante for its initial public offering early next month, amending its filing with the Securities and Exchange Commission to show that it hopes to raise as much as $3.8 billion in selling 14.8% of Wall Street’s last big partnership. The asking price climbs to $45 to $55 a share, up five smackers a pop. And 69 million pops are available.

For big boss Henry Paulson, it means his 4.13 million shares would be valued at $227 million – but he can’t do anything about selling them until the third anniversary of the IPO.

What it means for co-chairman-in-name-only Jon S. Corzine is unknown. The filing said he’ll quit the firm for good just before the IPO goes to market, rather than afterward as he’d previously announced. His handshake, however, is expected to be more than golden.

Dash of cold water

* That one-tune prophet, Warren Buffett, is at it again, telling the British Broadcasting Corp. that U.S. stocks are “too expensive for me in virtually all cases.”

Continued Mr. Berkshire Hathaway, “I would not advise somebody in the U.S. that came into some money right now to rush right into the equity market.”

Another voice of doom was raised by Laurence Meyer, the Federal Reserve Board governor who worries about inflation by keeping an eye on the unemployment rate. He told the U.S. Chamber of Commerce it’s so low at 4.2% that it may be time to start thinking about the appropriateness of the possibility of meeting to talk about the possible necessity of – shhhh – raising interest rates.

Grasso seems always

greener at Nasdaq

* The Big Board can’t wait to get even bigger, says its chairman, Richard Grasso, so it’s working

on a plan to start trading Nasdaq stocks – such as Microsoft and Intel – as well as its own listings for institutional investors.

Mr. Grasso said the New York Stock Exchange is on the verge of a deal with four electronic networks to create a sort of five musketeers arrangement – where a trade on one would be a trade on all – in an effort to increase liquidity and

decrease costs.

The four webs are Reuters Instinet, Bloomberg LP’s Tradebook, Brass Utility LLC (or Brut) and Strike Technologies LLC. The latter two number Wall Street’s biggest investment houses among their

investors.

Mr. Grasso says he sees no trouble in getting SEC approval for the arrangement, which he hopes to have up and running before the leaves fall.