What a way to start off the first bull market of the new millennium. Even though the Standard & Poor's 500 index has risen 18 percent from its post-September 11 low and the economy is again moving ahead, this two-steps-forward, one-step-back rally is hardly hypnotizing investors into thinking they've time-traveled back to the glory days of the late '90s.

Every trading day is an adventure for edgy investors. If it isn't a surprise profit warning (as happened last week with IBM's earnings-shortfall shocker), then it's carnage in the Middle East and spiking oil prices. You know you're living in strange times when Warren Buffett starts analyzing the financial risks of "nuclear detonation" in his folksy annual letter to Berkshire Hathaway shareholders.

Zigzag. Wall Street's proverbial wall of worry has morphed into a slippery slope. At this pace, it may be awhile before stocks make up all the ground lost to the bear market--especially for shares of tech firms. While the S&P and Dow industrials are at least in the same area code as their previous peaks, you'd need the Hubble to find the Nasdaq's previous record. The tech index must nearly triple in value to hit the peak of 5049 it reached in March 2000.

But here's a really scary thought. Some market historians have compared the current rally to bulls of the past. And they think this one is definitely retro, babe. "It might be happening for different reasons, but the results of this bull might be the same as in the 1970s," says James Paulsen, chief investment officer at Wells Capital Management.

Now that's a bummer. See, doing it '70s style may make for a funky, primary-color fashion statement--but not necessarily for a profitable portfolio. The Me Decade isn't exactly remembered as the golden age of Wall Street. Market performance back then brings to mind the title of one of the period's classic films, Apocalypse Now. The S&P 500 notched a meager 5.9 percent average annual return for the 10-year period (compared with 17.6 percent for the '80s and 18.2 percent in the '90s), including the horrific 1973-74 bear market, during which the S&P plunged 45 percent. And those paltry returns don't take into account the era's acidic 7.4 percent inflation rate. Veteran investors recall the decade as one in which it was nearly impossible to persuade anyone under 35 to buy a stock. "I think it is quite likely that looking back . . . we will have gone through a long period of stagnation and a flat market, like in the '70s," says Ralph Wanger, chief investment officer at Liberty Wanger Asset Management in Chicago and a '70s survivor.

No bargains. Why might the '00s come to look like the '70s? The problem today isn't inflation and skyrocketing interest rates as it was three decades ago--though Middle East turmoil and rising gas prices have a familiar feel to them. The bull's greatest impediment this time around is that stocks are still expensive on a historical basis. When this rally began in September, the market was trading at 34 times the prior-year earnings per share of the S&P 500, according to InvesTech Research in Whitefish, Mont. That's the highest starting price/earnings ratio of any of the 10 bull markets since World War II. The 1980s and 1990s bulls started with P/Es of 14. The only way the P/E can come back down to Earth is for the earnings part of the equation to soar.

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