Quality leaves a trail of accomplishment. Somehow– we must believe — it’s possible to tell companies that will do well and fly right from those that won’t. That’s the only rational reason to choose stocks. So smart investors look for key information—the bits that predict where to find the winners.

Earnings season is crawling toward us again. There’s little reason to expect cheering news this quarter. But US companies may be looking at much better numbers fairly soon. The consensus is there’s more trouble to come. But Lynn Carpenter says we can expect a turnaround mid-2009.

Financial news on the economy speeds toward us with black and white sureness. No subtleties, no grays or maybes come with the sharp, short announcements in the popular press: initial unemployment claims rose precisely so much last week. Producer prices fell exactly a certain percent last quarter.

Want to have some fun with the latest news? Go to the government’s housing price databank and get a much clearer picture of the situation than the headlines will give you. Today’s headlines are blaring that home prices just recorded their biggest drop ever—minus 4.8% this past quarter. Oh woe, oh woe. In the gloom, reports barely mention that a few states are showing some mild improvements in prices.

Lynn Carpenter at Investor’s Daily Edge says that for every super-smart investor there are several spontaenous and irrational money-chasers. Some of the biggest risk takers are Sovereign Wealth Funds (SWF), state-owned funds that hold an estimated $3 trillion in assets worldwide. These funds have little transparency and no clear long-term objectives, but can show investors where money is flowing in the market.