Every year at this time, in sort of an ancient (this is INC.'s third time at it) spring ritual of death and rebirth, the INC. Stock Market Index is reformulated for the coming 12 months. This is a rite made necessary by each May's celebration of a new INC. 100 -- a compilation of the country's fastest-growing (in sales) public companies over the previous five years. Because the INC. Index is designed to be a measure of the collective stock market performance of those companies, the index undergoes readjustment with each new batch. This gives INC. a decided edge over its "competitors," in that fresh, fast-flowing blood is transfused to what otherwise might be an anemic bunch. Nonetheless, it is a change in representation that INC. feels is suited to the mission. The contribution of the fresh group of growers, whose percentage gain has been compared to the same stocks the previous month, is apparent in the 14% rise posted by the INC. Index in March, leapfrogging INC. into a tie for third place in overall gain.

Lest this appear to be merely a self-serving statistical shenanigan, INC. points out that changing an average in midstream, as it were, is hardly unprecedented: Even the octogenarian Dow Jones Industrials gets a dose of Geritol every so often. Chrysler is long gone, for instance, Anaconda has disappeared, and bankrupt Johns Manville was kicked off the Dow list, as was Esmark; recent DJI additions have been sprightlier Merck, IBM, and American Express.

The 50 companies in the new 1982 -- 83 INC. Index (up from 48 last year) are shown above. To be included in the index -- which is calculated as a simple, unweighted percentage change from the previous month -- a company must have been an INC. 100 member for at least two successive years. This is to snuff out flashes in the pan that, perhaps more out of inspired bookkeeping than solid sales growth, happen to land in the INC. 100 in a given year and then fall into obscurity. Another criterion is capitalization: A company must have at least 1,000,000 shares outstanding; with any less an issue tends to fluctuate markedly, causing distortions in the index. Further, a stock must be reasonably active, having a record of daily trading. Otherwise, the spread -- the gap between bid and ask -- is apt to be abnormally large. And some INC. 100 issues don't even trade from month to month, thus possibly detracting from the vigor -- and "averageness" -- of INC.'s average.

There are 22 repeats from last year. Only 2 of them are oils, but with the addition of 7 more oil or oil-related stocks, once again,the INC. Index is comparatively glutted with the slippery (but over the last couple of years, relatively unprofitable) stuff. Oils make up 18% of the index. Twenty-two of the new crop are technology issues, properly reflecting where the hottest growth has been taking place, but a good 56% fewer than the stocks in the Hambrecht & Quist Technology Stock Index, which, as suggested, is solidly technology. Six other issues are in medical areas, reflecting continued fast growth in this industry. That leaves only 12 miscellaneous and markedly diverse companies, including a video-game creator, two women's fashion manufacturers, a manufacturer of industrial tape, consumer electronics stores, and a restaurant chain.

More than any of the other indexes charted in these pages, INC.'s own proprietary average remains a sound measure of the market value of sales growth, wherever it happens to be taking place -- even if in unglamorous corners.