Conventional Wisdom Weighs In

Here's some conventional wisdom that's predominant right now: Profit growth has slowed down this year. Nobody argues that profits for the first quarter will be negative or even flat. Indeed, even the most reality-denying permabear will agree that earnings will still be up this first quarter compared to what they were last year for corporate America. But after putting on double-digit growth for a handful of years now, the conventional wisdom has determined that earnings growth for the boom part of this ongoing cycle peaked last year.

Of course, the conventional wisdom has argued that for each of the past few years, even as earnings growth has come in double digits each year. Most bears will argue that earnings and operating margins have to return to some fantastical historical mean. Then you come in this morning and see Citigroup (C - commentary - Cramer's Take) and other companies who figure out more ways to squeeze more earnings growth from this boom part of the ongoing cycle reporting. And the virtuous cycle continues.

The upshot is that if earnings growth is indeed going to come in more than 4%-5% or so this season, there's likely to be some upside in the market, too, as it will have to move to price in such growth.

We're in the thick of it now. I'll be keeping it steady and looking for more individual names to put money to work in on both the long and short side. More in a bit.

At the time of publication, the firm in which Willard is a partner had no positions in the stocks mentioned, although positions can change at any time and without notice.

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At the time of publication, the firm in which Willard is a partner had no positions in the stocks mentioned, although positions can change at any time and without notice.

Cody Willard is the manager of CL Willard Capital Management, LLC. He is a regular guest on Fox News, CNBC and other networks, and he writes a monthly column for the Financial Times. He is also an adjunct professor at Seton Hall University and the author of TheCodyReport.net, a monthly stock market newsletter. Willard appreciates your feedback -- click here to send him an email.