NEW YORK (Real Money) -- Is it the Warren Buffett halo, the recognition that all isn't so bad in the world that's driving stocks today? Is it the percolation through the market that perhaps the dollar has topped and we are through with the earnings cuts? Or is it that we've got a huge amount of interest in high-growth stocks buoyed by positive news flow?
I think it's a bit of all three -- Buffett, dollar top and high-growth affection -- that have resulted in this move up, the best back-to-back days since February, at least for the moment.
Here's Monday session in an understandable context.
In homage to the weekend's event, though, perhaps it's worth it to ask first why it's worth the effort to try to figure out the intricacies of a given session's action? I know that the Oracle of Omaha disdains the day-to-day obsession with how stocks move. I can see, therefore, how even creating a narrative that weaves the day's action into some sort of sense can be viewed as antithetical to the common-sense continuum that Buffett offered. As he told everyone who would listen, he likes to buy shares in companies that he knows and likes and he likes to buy them at his prices.
I applaud his reasoning. I also endorse his long-standing view that if you can't do the homework, you should buy index funds to have exposure to the progress of American business. That said, though, I know way too many fortunes that were made in similar but less spectacular ways by people who put things into context and invested accordingly and used the context to get those prices that even Buffett admits he likes.
If Buffett wants to take advantage of what the market gives you in order to add to his holdings at his prices, there's an imperative to know the whys and wherefores of a given day's activity if only to understand why you get those bargains and opportunities.
That's why I think any attempt to make sense of an individual session creates value. It's a response to what I regard as an unmet need, the need to help people who are going to buy stocks with their extra income after they put their money into the mutual funds and their 401(k)s.
I get daily support for the job I do, whether it be a sweet tweet of gratitude or something more heartwarming, like the kid who stopped us while the Mad Money team was having a celebratory margarita after our San Francisco shows, telling us that our multiyear insistence on owning Apple (AAPL), not trading it, has more than put him through school, it has made him wealthy.
It comes from the grateful Waste Management (WM) driver who rolled down the window this afternoon when I pulled into CNBC and thanked me for helping him buy a couple of stocks that have worked. It stems from the 11-year-old who was visiting at TheStreet.com who says I got him interested in the market and asked me to sign a copy of Get Rich Carefully for his birthday.
I like that. It's the reason why I do what I do in every part of my day, including this daily, multiday blog.
With that said, what did occur Monday? I think that Warren's reassurances that all is well made you feel good about owning stocks. The stock market rallied big on Friday and we could carry over with that rally, in part, because Buffett embodies the idea that stock investing is a good thing even as stocks can and do go down. I know that sounds simplistic, but I have to admit that a periodic admission from the Greatest Investor on Earth that stocks, even his stocks, go down, is a referendum about the need to take pain with the gain.
Monday's morning rally could be credited, to some degree, to the Buffett meeting halo. The dissipation of that halo by mid-morning was as annual as the Berkshire Hathaway (BRK.A) (BRK.B) event itself.
The sea change I keep alluding to, the one based on a belief that the dollar has peaked, continues to power the big multinationals, which remain among the best performers.
That's healthy. I believe the dollar's fizzling and that while there will be moments where it can be ascendant again, like a strong payroll number if we get one this Friday, the wind may soon be at the back of companies that have seen their earnings reduced by a levitating greenback. Keep track of companies like Cisco (CSCO) to see if this trend is for real. I mention Cisco because its long-term CEO, John Chambers, stepped up to executive chairman today to make room for popular favorite Chuck Robbins as CEO.
Cisco has a huge international business and, believe me, that stock would have taken a hit if it weren't for Cisco rapidly become the de facto tech stock to invest in if the dollar really has peaked. Same with McDonald's (MCD), where a new CEO basically said, "We are doing a bad job," yet the stock barely got hit. McDonald's will do better regardless of its fare if the dollar has indeed seen its high, given how much business this company has overseas. You can include the heavily international PVH (PVH), the clothing company, as another stock of a company investors are warming up to as a weak-dollar idea.
I like the halo, I love the dollar-top story, but how about that third leg of the session's rally, the high-growth love affair that was rekindled on Friday? It's based on news. Biotech's been spurred once again by the stock of a company that is selling at 10 times earnings, Gilead (GILD), which reported last week. I think investors are getting more comfortable with the huge earnings power this company has from its hepatitis C cure. Talk about a halo that has extended throughout the group.
Another part is being fueled by a furious rally in Cognizant (CTSH), a consultant company with a strong franchise in digital know-how, which reported a blistering quarter Monday.
Taser (TASR) jumped again based on a popular belief that one antidote to deadly force could be the stun gun's universal adoption. We've loved this one forever. Reit buy, as they say on the Street.
Then there is the "worst may be over" portion of the market. I see three of these: the casinos where Wynn's (WYNN) vaulting gigantically on a 38% decrease in Macau gambling, which, as ugly as that is, was indeed expected. There's the bounce-back in hyper-growth infotainment king Harman (HAR), which had a convoluted quarter, heavily hurt by a strong dollar, but I thought was well explained in an appearance by the CEO, Dinesh Paliwal, on last week's Mad Money.
Same thing for Buffalo Wild Wings (BWLD), which bounced back from last week's drubbing because Tyson (TSN), the huge chicken producer, said wings could be coming down in price. The big move up in wing prices of late decked BWLD when it reported. I like it where people extrapolate news from one company and marry it with another.
But if you want to know what's got people riveted, it's Tesla (TSLA), which reports this week and has been on a real tear ever since the buzz began about the ancillary battery business. It's a good thing to end on Tesla, as it is perhaps the most anti-Buffett stock I have ever seen.
Remember, Buffett likes to buy value. If you buy shares in Tesla, you are in the anti-Buffett camp and you need to know that. Tesla reports Wednesday and it's become one of the greatest battlegrounds I have ever seen as CEO Elon Musk seems to have as many enemies as friends and the stock's part of the Musk war. Someone's going to be a genius come Wednesday, and I remain distinctly on the sidelines, not a view, just an observation.
Editor's Note: This article was originally published at 2:01 p.m. EDT on Real Money on May 4.