The Daily Dose: Find Some Inner Peace.

 | Aug 14, 2013 | 9:30 AM EDT  | Comments
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Stock quotes in this article:

jcp

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aapl

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sna

Thank you to the RealMoney faithful for the kind words on my CNBC "Fast Money" appearance Monday evening. It meant a great deal.

As you can see here in my first ever CNBC hit back in 2009.

I have made big-time strides on delivering a story. The prep work is something I take extremely seriously because I am really intense by nature. But I also want to honor what the late, and legendary, Mark Haines once told me off camera: "It's a privilege to do what we do, kid."

Haines was most certainly correct. The words shared in front of a camera that reaches homes worldwide have the power to make a person's life better. In this case, it's to help highlight why a stock could pop, or to lay out the reasons why a stock could lose massive value. The construction of the words is a process I will never approach lightly.

Let's go to more pressing matters: the market. I have this hearty suspicion that investors are getting sidetracked by an overload of buzzy news floating around. Therefore, I ask that you find inner peace today. Let's refocus on the task at hand. That is the researching of stocks on a carefully constructed watch list, developing stock screens or looking for additional ways to be as bearish as I have become on the market short-term. Here is the stone cold truth, folks.

The Bill Ackman/JC Penney (JCP) drama means nothing to your life if you are not holding a position in Macy's (M), or seeking to hold a position in Macy's. At best, the saga is a free education lesson on how extreme, childlike, and unproductive a Gordon Gecko-type investor could become, as well as the role of a company's board.

As for Apple, the Securities and Exchange Commission investigation inquiry-worthy tweet from Carl Icahn is only relevant if you're still holding the stock from its 2012 highs. Or, it's relevant if you are looking to build a position into yearend on an alleged exciting product release plan and subsequent shareholder-friendly actions. If Apple (AAPL)) no longer turns you on as an investment opportunity, who gives a damn about Icahn -- it's a sideshow. The sole reason I care is because a disclosure such as this opens the doors further to regulation of Twitter for financial services pros, which stinks.

To find your inner chi, I say begin with a second quarter earnings season that is not quite concluded. Consider these stats and then ponder their evolution in the current quarter:

  • 66% of FY13 forecasts by S&P 500 companies were below consensus estimates.
  • At present, consensus estimates call for 10.7% average growth in earnings over the next four quarters, more than 3x the rate of the last four quarters (can you say unattainable?).
  • For the first time in eight quarters, sales beats compared to consensus lagged their historical trend in the second quarter. Woops.
  • Is the Great European Stabilization priced into industrial stocks? Industrials, in addition to commodity sensitive cyclicals, boast the most robust earnings expectations going forward.

What I am Digging

Count me as a continued fan boy of Snap-On (SNA) shares. Two things that are keeping me on board: (1) 25% of its business is levered to large-ticket items (think undercar equipment). This area continues to accelerate after having gone depressed during the global macro downturn; and (2) on a persistently-sluggish sales trend in Europe, the company has managed to significantly improve its profit margins from the business. Imagine the earnings power when sales begin to turn the corner in the slightest of manners.

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