I laid out a case for Members last night as to why earnings are deceiving as we are hearing a lot from multi-nationals early in earnings season and they get some pretty big benefits from the exchange rate, which is running 14% better than last year. I strongly advise all Members to read my example on YUM brands as well as look over the charts and other stuff I’m not going to bother repeating here.
What I will repeat here is what I said in conclusion, which is:
I look at stuff like this (the Dollar’s effect on earnings) and think "surely I can’t be the only person who sees this" but I can’t find anyone else discussing it. I just don’t see how there can’t be quite a few fund people who know full well that this is all BS but, if so – what is the logic that keeps them playing the game? I guess, like us – they are worried about losing out to inflation so they can’t really stay away but we are currently ignoring a staggering amount of bad news at a complacency level we haven’t seen since 2007 (VIX under 15).