One of the legends of college football retired at the end of this past season. After 56 years and close to 400 victories, Florida State's Bobby Bowden decided it was enough. His gridiron accomplishments and charming personality will long be remembered. Beyond that, he leaves us with a new word, one that, well, just seems to fit the times - Dadgummit!

Dadgummit, solid earnings growth is largely being ignored so far in 2010... The vast majority of companies we follow exceeded analysts' expectations in the most recent quarter, many by a wide margin, yet the subsequent stock price reactions were driven primarily by forward looking guidance. In other words, the market remains in an elevated state of anxiety about the future direction of the economy, and rightly so. Stock prices represent what investors collectively think is going to happen, and when analysts, economists, politicians, and talking heads are all in a state of confusion, as they appear to be, then relatively strong earnings growth can be ignored. And that is exactly what is taking place in the market at the present time.

So what moves the market out of this quagmire of skepticism and frustration? Can corporations deliver on the 27% earnings growth forecasted for 2010? And if so, when will stock prices move higher reflecting this spectacular earnings performance? Tough questions...

There are two potential catalysts for the market in the near term. First, any improvement in the jobs data would bolster investor confidence in the sustainability of the economic recovery. Second, the announcement of a large merger could spark M&A activity which would likely bolster the market as well.

Meanwhile, frustration with our political leaders continues to grow... There was a short but profound quote in The Wall Street Journal by Sen. Charles Grassley, "People wanted President Obama to change Washington, not change America." Or as Stefan Stern writes in the Financial Times, "It's the timidity, it's the smallness of our politics that's holding us back right now - the idea that there are some problems that are just too big to handle, and if you just ignore them sooner or later they'll go away... "So I say this to you guys, that America is desperate for leadership. I absolutely feel it everywhere I go. They are longing for direction and they want to believe again."

But, what exactly do we believe in? Another tough question...

Through the real estate meltdown, individuals have learned the painful lesson that one cannot live beyond their means indefinitely. So, with this deleveraging mindset permeating our society from the bottom up, the message back to the politicians in Washington is - Dadgummit, hold on a second! We don't want reform or new legislation, or even entitlement programs that we can't afford. Don't burden us with a $1.3 trillion and growing deficit. That was the message from Massachusetts. Are our politicians listening? The last tough question, at least for today...

Back in August of last year, I wrote the following in "Battle Lines" the Forty-Seventh Edition of Willingdon Views, "...while we are clearly moving in the direction of more government involvement in virtually all aspects of life, there will come a time when we reverse course and wish the government would simply leave us alone."

Perhaps we are at that point, or at least we are getting awfully close, which brings us to the ideal political environment known as gridlock. A rebalancing of power after mid-term elections this fall might eliminate all remaining momentum from the Obama administration and its wealth-redistribution agenda. If this shift in fact occurs, it would likely be very positive for business, the economy, and the markets.

Back to earnings... Generally speaking, corporations have done an excellent job cutting costs and downsizing to cope with the recent recession. As top-line sales have started to improve, the impact on margins and bottom-line earnings has been powerful. This lean and mean corporate profile is what makes 25% + earnings growth achievable despite a relatively weak overall recovery. Eventually, stock prices will reflect the trend in earnings growth.

In the meantime, we continue to see evidence that industry-leading companies are picking up market share and solidifying their advantages vs. their peer group. The characteristics we focus on when identifying target companies has remained relatively constant, and includes: low debt, solid cash flow, innovative product flow, and disciplined management.

One closing thought... Washington, dadgummit, do no harm. We are determined to live within our means and so should you.