I mentioned last month that Old Stars Don’t Lead New Bulls; In light of the recent bloodletting on the Nasdaq, I brought this up on Kudlow & Co. Wednesday evening.
Some people (mostly emailers unable to spell) refuse to believe this. One had the temeritiy to demand some proof.
By coincidence, I just happen to have some. I’m doing a new column on this for RM, and I have been working with the nice folks at the Wilshire Associates. They culled this together from their extensive database. Its a comparison between the market performers from the 10 year period of the 1990s (December 31, 1989 through Decmber 31,1999). We then compared that with the recent period from the 2002 lows (Septmber 30, 2002 through June 21, 2006). The only requirement was a Market cap of > 1billion (as of the ending date).
Here’s the top 20; If anyone is interested, I can upload the full spreadsheet of the top 50, along with a look at market caps.
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click for larger graphic
Note how different the sectors are in the groups representing the leadership for each era . . .
Quick and Dirty (left out the returns listed NA). The top performers of the previous decade averaged an 87% return since Sept. 02, while the S&P returned 51% and the NASDAQ returned 88%. It appears last decades top performers outperformed / equaled the recent bull.
temeritiy? culled this together? its?
better be careful how you label bad emailers big guy.
Nobody’s perfect.
LOL and this is gentle ribbing not an attack.
Enough of those in the world these days.
BR Damn! I forgot to use the sarcasm code! — Its true, its hard to read saracasm in print sometimes.
/-snark//
to think that we get led by a soft drink /juice maker …… no wonder we’re in a BEAR market
i guess there’s life for some fallen dot.com angels — GLW , AKAM …… who knew
Looks like BR called it! In “Housing Leads the Economy Up and Down”, BR laid out the case a falling housing market precedes a decline in consumer spending. And with the numbers released this morning for June, consumer spending is falling. Good call, BR.
http://bigpicture.typepad.com/comments/2006/06/housing_leads_t.html
New market leaders until they are no longer leaders. Mark my word, I will be eating, not drinking, Hansen for lunch. I am waiting for my short entry and going to ride this sugar water maker to its demise.
I’ve seen this story time and time and time and time again. Snapple, Cott, Clearly Canadian and on and on and on. Huge runs only to become delisted or penny stocks or be purchased. In fact, the last option is their only hope. The big boys and girls in this space have legions of chemists and super savvy marketeers to slap a label on a new type of sugar water and push these guys on shelf space and revenue until they start missing their quarterly numbers. The moat is an inch deep. A mojo play that was 50 cents a few years ago. The only question is if there will be enough shares for me to ride this pig down hard. This is a sure thing if I ever saw one.
Damn! I forgot to use the sarcasm code! —
Its true, its hard to read saracasm in print sometimes.
/-snark/ mode is now off
I’m wondering if the big cap techs (chips and telecoms) the bulls have been pumping for a comeback may actually become the leaders again in the next bull.
Back in 2000 when the techs were leading we got a parade of guys who said the small caps would take over the leadership. They were right, but it took a bear market and three years for them to be proven right!
We’ll know when we see the new leader board, I guess.
BDG123
tell us when you short HANS …. want to go along for that ride to the bottom
TIMBERRRRRRRRRR!!!!
If a market falls in the woods, and no permabull pumpers spout off on CNBC, does is make a sound?
• 75% of Market Leaders in each cycle were new companies that incorporated in prior then years, 80% paid no dividends, and earning growth was the driver of market leaders, not dividends.
How about WFMI and CMG? Those are this market’s Boston Chickens.
Have some tacos and bean sprouts with your soda.
BTW: Looks like the greatest winner from the 1980’s/1990s is missing: UNH
Looks like small caps finally break the trend line… long way down. Will they follow the pattern of the homebuilders?
I thought I would post some silliness from the past. I remember in the early 90s the hot new beverage in the supermarkets were Clearly Canadian. The stock was a screamer. In fact, during its mojo days, I rode the pig for a while. Today, CC is listed on the bulletin board. But, look. The volume since mid 2005 has exploded. People are enamored with Jones Soda, Hansen and…….that brought the retards back into Clearly Canadian in a big way. If this isn’t froth, I don’t know what is.
http://tinyurl.com/h6kfv
ameritrade crashed about an hour ago and still seems to be down. when i called in to place my order through a broker they said they could not transfer me w/o my acct # and they could not look up my account # from my user name because there systems crashed as well. do i have any legal action with this if the mkt moves against my account?
ask the investors at Refco. their money was tied up for months.
refco went bankrupt. not quite the same situation bdg123
its not from a business standpoint. but, you were asking from a legal recourse standpoint. if refco clients couldn’t get at their money for months and they went bankrupt, wouldn’t you think they would have some legal options? but, yet, they didn’t. my point is you likely have little recourse. the only thing that happened was an outage. you signed statements when you opened your account and as much as ameritrade has problems, i’m sure there was a cya in there.
must be fun being a retail broker/money manager this week !!!! yikes —- I’m looking for another 500 points on DJIA next week , gets to interesting FIB confluence
THE NIGHT BEFORE WHACKMAS (with apologies to Clement Clarke Moore)
Twas the night before whackage and all through the house, not a permabull was sleeping, ignorant louses.
The bulls were all long, and hardly aware, that lurking in wait was the big bad bear.
The rubes were all nestled, snug in their beds, while visions of the IPOs danced in their heads.
And portfolios with Google, and Cody’s large caps
were just settling down for the proverbial dirt nap.
When out on the floor arose such a clatter, the permabull pundits said “PEs don’t matter”.
Away to the bloomberg I flew in a flash, and loaded up my charts, happy to be in cash.
With CNBC did my HDTV glow ,Gave the lustre of mid-day to objects below.
When what to my wondering eyes should appear, but a pumper clown, and his 8 bull seers.
With a little old shill, so full of shit, I wondered for a moment “who is this dick?”
More rapid than eagles his coursers they came, and Kudlow ranted and raved and called themy by name.
On Cramer, on Laffer, on Ronald, on dipshits. The market is leaking and the pump needs fixin.
Looks to me like we hit bottom about two hours ago. At least for this week. All the traders gone home – me too.
I made a bit on HANS today (long side) – it printed a “buy me” formation about 11:30 or so. Got a buck and change and out. Made my week – thanks shorts – let’s do it again sometime.
I try not to predict because I suck at it but the market has gone from overbought to seriously oversold this week and I wouldn’t be surprised to see a bit of a recovery next. But maybe not – what do I know – nada – just like the rest of ya.
Have a good weekend – everyone
Thanks Pete. Not one I can read to my kids, until they are much much older.
John 1:50
good thing you don’t predict …. cause you don’t know …
“nada” as you said ……. chimp
Any online account holder should have multiple ways of getting an execution — (add schwab and etrade) as well as including a reliable offline BD . . .
How can I get the list of the top 50?
We still have the big bad middle of the hurricane season coming up.
First Half of 2006 Is Warmest on Record
Jul 14 1:06 PM US/Eastern
WASHINGTON
The first half of the year was the warmest on record for the United States.
The government reported Friday that the average temperature for the 48 contiguous United States from January through June was 51.8 degrees Fahrenheit, or 3.4 degrees above average for the 20th century.
That made it the warmest such period since recordkeeping began in the National Climatic Data Center reported.
No state was cooler than average and five states _ Texas, Oklahoma, Kansas, Nebraska, and Missouri _ experienced record warmth for the period.
I, too, would like to see the list of the top fifty. Could you please post it online or would you prefer to email it?
Liked (still do) your columns on RM, but like BigPicture even better. Thanks for sharing your insights.
Not to be a jerk, because I like this blog a lot. But this chart shows that the leaders in one market, do not lead the next, but (unlike the heading of this post) it does NOT explain WHY that is true. It points out that is is not true, but it does not get to the “why’ behind it.
no critical questions allowed on this blog Jason
Because, Jason, their spectacular growth eventually slows and their market caps swell. Eventually, their product or service attracts other entrants (competition) and ONLY after a large move of the stock does the rest of the world discover it and fall in love with it and over own it as institutions begin the process of unwinding while the bids remain.
The Times they are a changing—or maybe we’re just waking up to reality
I’ve never been a fan of “what’s hot, what’s not” lists. However CNN money has a very interesting article about how the Jack Welch business dogma may be working its way over to the “not” list.
Now I will admit that Welch has probably f…
I laughed so hard I cried Pete. Just remember that “Free-market captalism is the quickest path to posterity” (when you are trading with zero-regulation slave states like China)