Earnings based on quality a big factor for stocks

Thiagarajan is quick to say that he will surely not be right on all his picks. But his scrutiny of financial statements has served his pension fund customers well recently. A fund that Mellon started last March to reflect his analysis of earnings quality produced gains of 3.5 percent through the end of September. Not bad, considering that the S&P 500 fell 26 percent in the same period.