Cummins Engine (CMI) has been beaten down with the rest due to its subprime (err, that's not it)... due to its natural gas (err, that's not it)... well I don't really know why other than it opens on the stock exchange every day and hence should be sold. I continue to like this long term story, and earnings continue to shine through. The is a prototypical stock we want to own as it increasingly avoids America - overseas exposure continues to be very under estimated by the investing community. The stock is up 10% this AM.

Folks at this point about 1/3rd through earnings season, this could be the best our stocks have performed in any earnings season since we launched - we are seeing impressive stuff across the board, even outside the commodity space. But this is the worst our fund has performed in any earnings season since our stocks are not the flavor of the day. Only on Wall Street... only on Wall Street. I shudder to think what would happen if one of our stocks dared to miss if this is how they are treated when they are all smashing earnings estimates. Frankly this is why it is hard for me to get bullish for more than a 48 hour period. If we are not rewarded for standout earnings, than we have to buy the junk of the market. Stuff that only rebounds for a short time before they continue their wayward swirl down to the sink. With our time horizon, it's not in our playbook to do that. So we have to remain patient and eventually stocks are a reflection of earnings. But certainly they are not in the short run. But on a fundamental basis, I am absolutely thrilled with what our companies have been reporting.

• Cummins Inc (CMI), a U.S. maker of engines and power generators, said its earnings in the second quarter rose a better-than-expected 37 percent as strong international sales overshadowed weakness in some key North American markets.
• Cummins reported a second-quarter net profit of $293 million, or $1.49 a share, up from $214 million, or $1.06 a share, in the same period in 2007. Analysts' average profit forecast was $1.23 a share, according to Reuters Estimates. The results included a $6 million charge related to damage to several facilities caused by this summer's flooding in the Midwest.