A Market of Selective Forgiveness

 | May 07, 2014 | 2:31 PM EDT
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The pressure on these momentum managers is as bad as it was in the spring of 2000. Not only are they getting crushed in their bailiwick, they are watching the old-fashioned portion of the S&P 500 levitate higher, even if the earnings aren't that strong.

Think of like this. What were the companies that stand out for reporting true disappointments? I would say AT&T (T), Kellogg (K), Exxon Mobil (XOM) and General Mills (GIS). They are all screaming higher. How did the industrials do? If they are in aerospace, they are soaring. If they are old tech, they are still doing pretty darned good -- think Oracle (ORCL).

Plus there is incredible forgiveness. There was lots of commentary about how 3M (MMM) missed. But it has since gone higher. Visa (V) did miss, and it's ripping now.

But if you blew out the very metric that brought you to lofty heights as Facebook (FB), ServiceNow (NOW), Yelp (YELP), Concur Technologies (CNQR) and Tableau Software (DATA) have, you are getting slaughtered. If you even mildly disappoint on those high-growth metrics, think FireEye (FEYE), you are taken to the woodshed, locked in and soaked with gasoline, with a lit match thrown in.

Oh, and If you are a high-multiple, old-line growth stock like Whole Foods (WFM) and you guide down, you might as well be known as the organic food software-as-a-service play with some cloud thrown in -- the ultimate punishment.

It's not in the self-fulfilling phase. You have to sell what you can of the Amazons (AMZN) and buy what you can of PepsiCo (PEP), hoping that the company pulls a Mondelez (MDLZ). You have to sacrifice your core growth principles -- if you ever really had them, because you may have been a chart-based fellow traveler -- and buy the same boring stuff that saved your butt in 2000.

History is repeating itself. It's just that people don't remember it right. 

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