Upon Further Review

 | Oct 24, 2012 | 11:31 AM EDT
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We have the snap view and then we have the "Upon Further Review" view, and I think the latter is beginning to show itself in this earnings season.

Take Wells Fargo (WFC). When it reported its so-called disappointment, Wall Street reacted violently and sold the stock down hard.

The taint of the quarter, which revolved around expenses and net interest margin disappointments, seems to have no end because, unlike in football, there is no instant booth review.

If you parsed that conference call, however, you know that this Wells Fargo quarter was all about taking market share and writing the most mortgages and grabbing the most checking accounts. They are now 33% of the mortgage market -- not bad when you look at today's mortgage numbers -- and 40% of the servicing business, which, right now, isn't that good but could boom once the legal issues clear up. Those legal issues go away the moment housing prices rise and, from the looks of things, that moment is here.

So what happens next? The company knows that it delivered on its own metrics, so it announced a whopping increase in its buyback to $6.9 billion. Then, today, Warren Buffett tells Becky Quick on CNBC that he bought a billion dollars more of the stock, where he is already a gigantic holder.

Now the stock has stabilized and is set to go higher.

We saw something similar happen with FedEx (FDX) where, initially, all hope was lost. The stock's since had a terrific move higher.

There's a lag to this. Wells Fargo reported in the first week of earnings season. Now people are circling back to it. FedEx had a similar conversion before earnings season.

Now I am coming back to ask which other earnings judgments on the field could be reversed by booth review, and I think that the most likely will be IBM (IBM) and General Electric (GE). IBM because it will be back in buying hard and people know there is a new product cycle, and GE because only health care was a real issue. Remember both companies reiterated their guidance, which is what really drives stocks higher, ultimately.

I am not saying that everything is resurrected. Ellen Kullman's credibility as a CEO crashed and crashed hard when DuPont (DD) reported. I can't imagine a turn there any time soon. And some revisions are taking forever: witness Costco (COST), which just caught a bid today.

Remember, most calls don't need to be reviewed. But the downbeat ones that crashed stocks? In each case, that's like the notion of being able to review the last two minutes without a coach throwing the red challenge flag.

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