The Market Hears What It Wants to Hear

 | Oct 26, 2011 | 6:27 PM EDT
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Sometimes the market is so infuriating. When the market makes its mind up that something's wrong or is about to go wrong, when it thinks that a company is dissembling or clueless, it just doesn't matter what is said.

Such was the case with Norfolk Southern (NSC) not that long ago when its stock was in free fall when a couple of coal companies had screwed up and preannounced bad numbers.

It didn't matter that Norfolk Southern at a conference the day after the screw-ups presented numbers that were up to the minute, showing how great the coal-car loadings were. It didn't matter that NSC basically assured you that business in September was off the charts. All that mattered was that Walter Energy (WLT) said that it saw earnings for the next quarter at one-third of what it had told people earlier. That caused NSC to drop almost 10 points in two days!

Now we see the real numbers, which were exactly what NSC said they would be. No, maybe a little better. And the stock is screaming higher after hours.

Infuriating. Admittedly, if Germany had stalked out of the talks or if France said, "Forget it, take a hike, Greece," then NSC would be at $65 instead of $72, where it is trading after hours.

But they didn't, and a huge gain has been made. The moral? How about trust a company like Norfolk Southern, which is as conservative as a company could be and better run than just about any other out there?

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