Kass: Don't Buy Big-Caps' Big Move Up

Given that foreign exchange gains contributed to nearly 40% of the upside revenue surprise in the first quarter, to what degree did foreign exchange translation contribute to first-quarter earnings surprises?

Unfortunately, many companies don't spell out the boost. But in light of the fact that (1) the share of internationally based profits is rising and (2) that the effective tax rate for non-U.S. generated earnings is lower than the domestic corporate tax rate, there is reason to suspect that the foreign exchange translation of profits could have provided an even larger percentage contribution than it did to first-quarter year-over-year sales growth.

For now, earnings quality (especially in a background of such a pronounced market ramp) seems to be something less than a mildly interesting statistic to most investors.

Although the U.S. dollar hit another low last week, no one even's considering the impact if the dollar eventually rallies. Nor are many other concerns being considered -- such as non-U.S. central banks' tightening aimed at slowing economic growth -- as the crowds continue to outsmart the remnant.