There are a couple of ways to spot changes in earnings. You can start at the bottom – visiting stores, watching cash registers, counting transactions. (Of course, you have to do this at more than one store and at more than one time.) Then when you see something is flying off the shelves at a pace that isn’t reflected by the earnings estimates, buy the stock of whomever makes it.
If you don’t have time to sit in a store and watch the register, you can try to anticipate spending cycles. The airlines have an incredibly predictable spending cycle. When you see Boeing getting lots of orders, you buy the stocks of Boeing’s suppliers: Fairchild , BEA Systems, Honeywell. Then as soon as analysts start loving these stocks, get out.
The same goes for semiconductors. These companies like to raise money to buy equipment when they’re doing well. So when this happens, load up on their suppliers: Applied Material, KLA-Tencor, Kullicke & Soffa, Novellus. Telephone companies are no different, so follow the same strategy – buy their suppliers then bail when the analysts get onboard.