The Baby With The Bath Water
by Charles B. Carlson, CFA
Dow Theory Forecasts

It has now come to the point in which Wall Street is throwing the baby out with the bath water.

Exhibit A is Walgreen. The stock got pummeled recently on news that the firm's growth was slightly less than Wall Street had expected.

Of course, it didn't seem to matter that earnings in the latest quarter rose 14%. Or that same-store sales rose 9%. All that mattered was that earnings per share were a penny lighter than expectations.

When Wall Street starts to bombard even companies that are showing double-digit earnings growth, you know it's an ugly market.

You also know, however, that the bottom is probably near. Indeed, the last phase of any bear market is the wholesale dumping of stocks, regardless of their value. That is what we are seeing today - dumping of stocks at any price.

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