Our so-called junk rally has been unusually kind to financial fare, with the likes of Goldman Sachs (NYSE: GS), Morgan Stanley (NYSE: MS), and Credit Suisse (NYSE: CS), for example, sporting triple-digit returns year to date.

Never mind the still-fragile state of the economy, not to mention those toxic assets we used to hear so much about: They remain toxic. Nonetheless, a deeply bought-into belief that happy days are here again has led to yet another spiked punch bowl -- and with the lampshade only recently fastened back on the lamp and the glass-cleaner barely dry on the copy machine, too.

Indeed, over the past three months alone, the Financial SPDR (XLF) -- an exchange-traded fund whose top holdings include the power trio above as well as fellow big boys Citigroup (NYSE: C) and Capital One (NYSE: COF) -- has risen by nearly 25%.

Party on, Wayne
Yes indeed: The market is drunk yet again, and it's not just financials that are partying hard.

Sirius XM Radio is another triple-digit gainer on the year despite its 0-for-10 free cash flow record over the past decade.And while Freeport-McMoRan Copper & Gold  is, admittedly, a sturdy operator, its fortunes (or misfortunes, as the case may be) are tethered to the mercurial demand for commodities. When the current gold fever breaks, a stock price that's increased by more than 200% this year is going to strike some folks as fool's gold.  

What goes up ...
Parties are fun while they last, but no one Fool should be the last to leave. Investing ain't Sunday school, it's true, but fundamentals (and, um, fundamentalist investors) will eventually trump a "technical" rally, a rise powered in large measure by the fact that money has begun flowing back into equity mutual funds and that money managers don't get paid to sit on cash.

To snip the title from a favorite Fool commentary, the bottom line is this: Danger, horror, get out! Unlike that must-read write-up, though, no irony is required here. Now really isa great time to cash out of clunkers and trade up to tougher stuff, vehicles poised to provide greater mileage over the long haul.

Two for the road
Johnson & Johnson (NYSE: JNJ), for example, is still trading with a below-market P/E despite rock-solid profitability and deep-pocketed financial health.

Meanwhile, fellow health-care sector dweller Medtronic (NYSE: MDT) looks intriguing, too, with concerns about coming -- eventually! – health-care cost controls more than priced in. In the near- to mid-term, those controls don't appear likely to have much bite. And the emerging reform legislation seems poised to dramatically increase what is, in the broadest sense, Medtronic's customer base: the insured.  

Art and science
No matter what data swirls around it, though, free cash flow (FCF) is my mainstay metric. Add up the cash a company has taken in from operations, subtract its capital expenditures, and voila: FCF, the lifeblood of any going concern that aims to remaina going concern.

The science of analyzing FCF involves assessing the present value of a company's future cash flows. And then the art kicks in; determining whether a stock's current price is right in light of the return you require given its risk and how wide your margin of safety must be.

That latter phrase refers to the gap between a company's stock price and your estimate of its intrinsic value. And that's where I'm currently stuck with both Johnson & Johnson and Medtronic. Attractive in fundamental terms though they are, both currently trade above my buy-below price -- and therefore outside my margin of safety. Continued...