Optimism as the Smoke Clears

 | Feb 11, 2014 | 3:25 PM EST  | Comments
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Stock quotes in this article:

ba

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mmm

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utx

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aa

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aapl

It's good to see some stocks come back that really didn't disappoint, but were simply conservative in guidance. Two that I follow, 3M (MMM) and Boeing (BA), were scalded when they offered tempered views of things and people believed that the worst was about to happen.

Instead, these are just typical examples of the management style of really good executives who want to use the earnings call to guide for the worst if the worst occurs and then otherwise things could be terrific.

At a time when you can hear that China's slowing, that our employment gains are minimal, that Latin America and India seem on edge and that the emerging markets are teetering, do you feel like coming out and saying that things looks great for your big industrial company that needs exports to most of these countries to make the numbers? Who would be so insane as to say that?

United Technologies (UTX) hinted as such, but only after it had already guided down. Alcoa (AA) talked about this, but said things could go right or wrong. Honeywell (HON) had a story pretty much without caveats, but it has some really good secular trends going for it.

But 3M and Boeing are squarely in the sights of the markets that are most on edge, so what's the point of raving about them?

Believe me, this is not an uncommon problem. For example, shouldn't Apple (AAPL)  have warned people on the previous conference call to this one about all of the pitfalls ahead? Would that have eliminated the debacle, even as the debacle allowed the company to truly buy stock at the right price?

Now, the amazing thing, of course, is the view that the world's situation has changed for the better since the forecasts. Obviously it hasn't. But Boeing has since talked about some very big contract wins and 3M was good to begin with and there really wasn't anything other than an ephemeral warning.

Now the smoke is clearing and people are circling back to what's really been trashed. Candidly, I didn't believe the optimism could transpire so quickly. But the three-fold combination of a steady, hang-in Yellen, a later date for Obamacare and an apparent possibility of a debt agreement are bring a happy-days-are-here-again perspective that is infecting all!

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