Take, for instance, the amount of margin debt -- or borrowed money used to buy stock. After falling nearly 10% in April, when the stock market nosedived, the amount of margin debt eased only 4% in May, according to figures released last week by the New York Stock Exchange.

That surprised some analysts, who predicted a drop of as much as 20% in margin debt. Their theory was that small investors, many of whom faced big losses in their stock portfolios during the market's decline, would pull back, reducing margin debt either as a result of margin calls -- demands to put up more cash to back the loans -- or nervousness.

They were wrong. And that suggests that the speculation rampant in the markets earlier this year may not have died out, says Steven Galbraith, an analyst with Sanford C. Bernstein & Co.

-- (The Wall Street Journal)