While most sell-siders across all industries say investor sentiment is bullish on 2010, the recent stock market action says something completely different. Maybe they are not looking at the performance disparity between the basics and AMZN or AAPL or whatever other darling might be out there. True enough, while commodity and basic industries were shellacked over the past weeks, the stalwarts holding up the major indices and ETFs were OK (relatively). If investor sentiment is determined by the extent marginal selling affects AMZN or AAPL investor sentiment is indeed not that bad. When AMZN and AAPL hit the skids, look out below.

I don’t subscribe to this idea. Individual names are tanking. This season sell-siders are modeling the low end or below mgmt guidance. A dude I walk my dog with – he is in real estate and has an undergrad econ degree – says “year on year comps peak in 2Q or 3Q, so I think we have issues in the middle of this year.”

This is incredible to me. The argument is made with no regard to valuation and thus is a hat tip to momo as a sole determinant for an investment idea. On one hand I think the whole macro y/y comp bit is interesting but not a compelling investment thesis by itself – I always pick stocks and not these absurd ETF thingies, so what do I care about y/y macro comps when the economy is crawling out of the deepest hole in 100yrs? On the other, if everyone thinks this, I need to respect this. It only pays to be contrarian just before the tide shifts, not when the tide has just turned.

In the end, this year will be all about stock selection and not macro analysis. I understand this is not an original statement. Whatever, no one seems to be paying attention to it. It is a sobering thought to think of all the folks who lost jobs over the past few years and that maybe – maybe! – half will find jobs again. This country needs to get a good grip on the shaft that steady-state GDP growth will be closer to 2% than 4% going forward and that ~2% interest rates in America are better longer term models than 4%. It is all horrific indeed. blah blah blah. It does not mean some listed companies will not exhibit abnormally high growth rates.

My point is to keep in mind that right now all research shops and even the common man is focused on this whole y/y comp business. Go pick a company that will exhibit better y/y comps. Analyst estimates are very likely too low…once again.