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COVER STORY

Riding the Boom, by Grainger David, page 58
One of the more striking phenomena of recent years has been the reemergence of the real estate speculator. Inevitable comparisons to the stock market bubble of the late 1990s would seem to indicate the housing boom will soon be over, which is what analysts, experts, and even magazines (including FORTUNE) have been saying for two years—except it hasn't turned out that way. To find out why, FORTUNE spent more than a month interviewing dozens of real estate speculators (who prefer to be called "real estate investors"). The result? A look at how they alight on a hot market, gorge themselves on property until prices get out of control, then depart for yet another promising town. "Many of them acknowledge that they are part of a bubble and that a correction is coming," says writer Grainger David. "But they believe it won't hit their market—or that if it does, they'll be able to get out in time."

Will Wall Street Ever Trust Time Warner?, by Stephanie Mehta, page 76
Three years ago, when Dick Parsons became CEO of what was then known as AOL Time Warner, the company was reeling from the worst merger in business history. Since then, Parsons has accomplished pretty much everything he said he would: he has slashed corporate debt nearly in half, stabilized AOL, settled two federal investigations, and is set to buy a chunk of Adelphia's cable assets. And yet, reports Stephanie Mehta, Parsons has a major credibility issue on his hands. He's still struggling to convince investors that Time Warner has put its considerable troubles behind it and is now poised to grow. In his first interview since he announced the Adelphia deal, Parsons laid out his plans for the future of the company and for boosting shareholder value. One surprise: The possibility that AOL might be spun off the division as a separate stock.

Charles Schwab's Big Challenge, by Betsy Morris, page 88
When David Pottruck was asked to step down as CEO of Charles Schwab—its namesake founder would return as CEO—so ended one of the stranger succession stories in recent memory: not the all-too-common kind in which a founder can't let go and sabotages his protégé, but rather a case in which everybody tried to do the right thing but somehow got it all wrong. So too began the latest chapter in the death-defying story of Charles Schwab, the man and the company. In short order Schwab has put the company back in fighting shape, and his renewed vigor has probably been one catalyst for recent moves towards industry consolidation. But as Betsy Morris reports, it will take a lot more top-line growth to make the company a darling of Wall Street again. That is Chuck Schwab's next challenge.

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DEPARTMENTS
In FIRST: Terminal Illness With United's pension bailout in the works, the turbulence is just beginning for competitors. On the Radar Billionaire Glazer's big score in soccer. A New CEO's Rx for What Ails Merck Richard Clark may be the right prescription for the embattled drugmaker. GM: Kirk Could Be on to Something Both Ford and GM had their credit rating downgraded, but a smoother road lies ahead for GM—which may be why Kerkorian upped his stake. Question Authority Adidas CEO Herber Hainer. This Just In The quest for eternal flight. Brainstorm The amazing rise of the do-it-yourself economy. In COLUMNISTS: Street Life The games insurance companies love to play. Politics What does AARP's Bill Novelli want this time? Value Driven Nuclear power gets an image rehab. In INVESTING: Power Plays The low-voltage utility sector suddenly has plenty of juice. Gorging on Buybacks Corporations are repurchasing shares at a record rate. Here's how to profit. The Risky Rewards of AIG Morgan Stanley analyst Bill Wilt thinks the insurer is primed for a (modest) comeback. In BUSINESS LIFE: Homeward Bound A survival guide for twentysomethings who move back home (and their parents). Gadgets Gizmos for grads. Workplace How telecommuters can stay connected.

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For further information please contact:
Susan Brown
212-522-0133
susan_brown@timeinc.com

Amy Mahfouz
212-522-2134
amy_mahfouz@timeinc.com

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