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A No-Justice Market

Now, you may think that is impossible -- but that, again, has been the pattern with Caterpillar. Like FedEx before it, people can't stay away from this high-quality company because, alas, it is high-quality, and best-of-breed always attracts buyers. Sorry -- it will be bought, not sold here, because it has already been humbled.

Caterpillar has now declined about 3% vs. the market's plus 9% gain. Because of that, no one of any significance will downgrade it after this hammering.

Deere? Here's the premier farm-equipment stock that has been hit with multiple downgrades because of a slide in the price of corn. It now sells at 10x earnings. After the decline, it's barely up for the year.

So now the potential sellers are thinking it's down enough already. The buyers are thinking, What happens to this coiled spring if corn goes up? It will be bought because of that potential upside.

Oracle, finally, is a little like FedEx. It had run into the quarter and came into Wednesday's session up 7% for the year. But this high-quality company will be selling at 11x next year's earnings by the end of the day, with lots of cash -- $33.4 billion -- as well as a huge buyback that included the repurchase of 61 million shares, with $10 billion bought in the last year. It also has a new product cycle that starts this quarter. The expectations had been ratcheted down, and people are going to give Ellison, Hurd and Safra the benefit of the doubt here. A couple of downgrades today, a few more tomorrow and that's about it. Again, invoking the two-day-decline rule of FedEx, it should probably be bought Monday.

Now, I know all of this seems pie in the sky. These are four companies that really blew it. If there were any intellectual honesty to it, these companies would go down and then stay down, if not continue to drift even lower, given the circumstances.

But -- and this is the real but -- that's not been what the market's been doing to damaged stocks. There's been a tremendous benefit of the doubt being given to higher-quality companies that have been put on sale, as FedEx showed from the Lazarus-like run from the September-to-October debacle.

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