Earlier this week, I had my first stress test.  I’m not talking about the work, marriage, or children kind, but the good, old fashioned, “hop on a treadmill and stress your heart” kind.  Oh, the joys of turning forty.

Here’s what happened.  A nurse taped a bunch of wires to my chest, put me on a treadmill and then steadily increased both the speed and incline of the treadmill every couple of minutes until I failed to keep up.  At the same time, a doctor and a few expensive machines monitored my pulse, my blood pressure, and my heart rhythm.  While the test cost me a few bucks, I now know for sure that I have a healthy and fit heart.   

Quarterly earnings season is just like a stress test.   Each quarter, companies are forced onto the earnings treadmill and subjected to a litany of tests and fast paced analyst questions.  In the end, investors hope to gain a better understanding of whether or not a company’s outward appearance — it’s stock price — is justified at a specific moment in time by what’s on the inside — it’s fundamentals.

The market was moving at a fast pace heading into earnings season and the treadmill was on a steep incline.  So it might come as no surprise that some stock prices have collapsed after an unsustainable short term pace.   Lance Armstrong was capable of crashing and burning on any given stage of the Tour De France but over the long haul, he still took home Yellow.     

I suspect we will see some backfilling in the markets as the earnings process continues to wind down.  And after a period of necessary rest, I think we’ll regain our footing and settle into a more comfortable pace, finishing the fourth quarter on a positive note.    

Sometimes we need a good stress test just to see how healthy we are.