2011 Markets: Lots of Motion, Nothing to Show For It
Here we are, the final session for equity markets in Europe and the United States. As has been my habit forever, I take this week off to recharge (though it has not worked out that way). I feel comfortable doing this is because whatever happens this week is rarely of much consequence; markets tend towards a modest upward bias, with terribly light volume. The action is effervescent, gains or losses are easily reversed when volume comes back in.
This year, we have seen enormous swings, lots of volatility. Yet with the last session of the year about to begin, markets are essentially unchanged YTD:
S&P500:
December 31 2010 close: 1257.64
Yesterday’s close: 1,263.02
52-wk High 1,370.58
52-wk Low 1,074.77
Total Range (based on 2010 year end): 23.5%
YTD performance: 0.43%Nasdaq Composite
December 31 2010 close: 2652.87
Yesterday’s close: 2613.74
52-wk High 2,887.75
52-wk Low 2,298.89
Total Range (based on 2010 year end): 22.20%
YTD performance: -1.48%Dow Jones
December 31 2010 close: 11,577.51
Yesterday’s close: 12,287.04
52-wk High 12,928.50
52-wk Low 10,362.30
Total Range (based on 2010 year end): 22.17%
YTD performance: 6.13%
I will update these with year end data next week
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December 30th, 2011 at 8:49 am
ok .. “enormous swings, lots of volatility. Yet …. essentially unchanged YTD” .. sooo who owns more of the corporatations now then ? thats what matters in my O
on one hand I favor corporate stocks going out of existance:
> to keep “the air” in the room for bonds – always an upfront trade in any environment (without stocks) & more level playing field with less oversight needed (less cops)
> to allow corporations to perform without traders removing “the air” in the room for them
> to allow interest rates to normalize in the room without corporate stocks promises (granted or denied) ie: offshore profits, outsourse jobs, skim deductables for pov, topdog pay, dividends (or not)
on the other hand in a world without stocks:
> the mechanism to fund the good TBTF* corporations big deal projects
> the mechanism to fund the kickback seekers via this system now in control (sort of in control)
I picture it as a black hole between two star systems – the eddy current of the tides
… then again I think it’s what we want – less blahness and more gamesmanship
* – Fail, Fight, Form a successful prosecution on bad deeds (@ viable costs in the rules of capitalism)
December 30th, 2011 at 9:41 am
here’s a list of charts that might help the market to go higher in the next year.
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID4816747
December 30th, 2011 at 9:43 am
Here’s something that had lots of motion and will show up on our western shores very soon:
http://www.washingtonsblog.com/2011/12/japanese-debris-to-hit-america.html
from the end of the article (and video):
“Note 1: In terms of the debris, people should not worry that all of the debris is radioactive. I am sure that a much smaller percentage is.
However, if even one-half of one percent of the debris is radioactive, that could still bring substantial amounts of radiation to some shore areas on the West Coast of North America. In other words, people should keep their kids away from picking up debris on the beach unless it has first been tested with a geiger counter.
Note 2: In addition to radioactive debris, MIT says that seawater which is itself radioactive may begin hitting the West Coast within 5 years.”
Stay tuned.
December 30th, 2011 at 9:45 am
PLEASE PLEASE PLEASE update this AND ALSO the total number of points travelled for the s&p 500.
There was a graph in early December showing the index travelled almost 5,000 points to be up in total only 13.
Awesome stuff!!
December 30th, 2011 at 9:48 am
The USD is also about where it started at the beginning of the year.
Gold began the year at just under $1,400/oz., and looks to finish at around $1,550, or so (even after getting slammed over the last half of the year).
Meanwhile, the National debt stood at $14,025,215,218,708.52 on 12/31/10, and is currently $15,088,441,787,407.62 — an increase of $1,063,226,568,699.10.
http://www.treasurydirect.gov/NP/NPGateway
Consumer debt continues to rise:
http://www.federalreserve.gov/releases/g19/current/
Gasoline was $3.07 on 01/03/11, and will finish the year at about $3.26.
https://web.pricelock.com/index.php?c=learn&m=commentary&gclid=CPil_ZyBqq0CFUOo4AodBFaLmQ
It’s difficult to find hard data, but empirical evidence would suggest that, for the year, incomes are down, unemployment is up (more than reflected in the “official” numbers), RRE is down for the count, housing rents and cost of staple goods are up.
Looks like clear sailing from here on out.
December 30th, 2011 at 10:03 am
Another consistency…
Through November, investors withdrew a net $65 billion from stock funds. That exceeds the full-year total of 2010, when they pulled a net $49 billion from stock funds. Investing has taken a more conservative turn since the financial crisis of 2008, with money consistently flowing out of stock funds, and bond funds continuing to attract new cash.
http://www.csmonitor.com/Business/Latest-News-Wires/2011/1215/Equity-mutual-funds-Investors-pull-money-out
December 30th, 2011 at 10:19 am
plus ça change, plus c’est la même chose
the can kicking continued on both sides of the Atlantic with the pace of can kicking picking up a bit in the euro zone with the ECB and the other alphabet soup lenders of least resort playing the game like singles hitters while Team Ben Shalom favors swinging from the heels with massive QEs (apparently the big Euro banks don’t have the same stranglehold on their central govs that the TBTF have on US).
Stocks are about the same, home prices, mortgage rates and unemployment (maybe) are all slightly lower.
The fuses on the Euro and RE bombs continue to smolder and we’re probably only some CPA firm forced writedowns on non performing mortgages away from a blast on this side. The Euro bomb has lots of smoldering fuses. I think the CPA firms will be coerced into being “team players” and cast a blind eye towards the non-performing mortgages similar to the professional business services performed by appraisers, bond raters and bank regulators during the boom years. Like all 3 of their bretheren they’ll get religion AFTER something bad happens and they won’t recognize any problem until a TBTF CEO makes a weekend conference call to Turbo Timmy and Ben Shalom asking for some temporary help.
December 30th, 2011 at 12:13 pm
“PLEASE PLEASE PLEASE update this AND ALSO the total number of points travelled for the s&p 500.
There was a graph in early December showing the index travelled almost 5,000 points to be up in total only 13.
Awesome stuff!!”
And this further illustrates that buy and hold is dead. Had you bought on 1/1/11, you would have no gain for the year in a retirement plan SP Index fund, and would actually be net zero or below due to expense ratio of improperly timed buy ins.
For a guy in the industry, I have less faith than ever before that retirement plan participants should be directed into funds that allocate to stocks. Most should be allocated into a fixed income or money market fund, then asked at intervals if they want to diversify.
December 30th, 2011 at 5:06 pm
Buy & Hold is an excellent strategy during a BULL Market. (Just remember to end that trade when the Bull market ends)
Buy & Hold is a terrible strategy during a BEAR Market. (Just remember to end that trade when the Bear market ends)
December 30th, 2011 at 6:16 pm
And that statement, Mr. Ritholtz, furthers my arguement. Today’s investors have more access to information and their accounts than ever before, yet they continue to leave stock funds at the wrong times, and change their allocations back. Most will not have access to an intelligent, LUCKY, financial advisor. Most will not do the research to back up their decisions. It’s all based on emotion.
Now, I’m doing all I can to teach these folks the errors of the ways. But it’s a long, uphill slog.
December 31st, 2011 at 1:16 am
“PLEASE PLEASE PLEASE update this AND ALSO the total number of points travelled for the s&p 500.
There was a graph in early December showing the index travelled almost 5,000 points to be up in total only 13.”
I think we have here is the2011 S&P analog to the sex act.
Lots of volatility, no net yardage; livin’ high on the vig.
December 31st, 2011 at 6:33 am
Peak to Valley loss for the S&P 500 from Oct 2007 to Feb, 2009 -51%.
Cumulative return to the S&P 500 since Feb 2009 52.7%
Because of the geometric nature of gradually compounding returns, this return brings us back to just 91% of the previous peak, but that’s a huge improvement from just 49%, where things stood on Bush’s last day in office.
And then there’s this: Rank of the best performing presidential administration for the inflation-adjusted annualized return of the S&P 500 “under their watch”:
Obama 14.73%
Clinton 14.26%
Eisenhower 13.38%
Kennedy 11.10%
Bush I 11.10%
Truman 9.99%
Reagan 9.53%
Roosevelt 8.67%
Johnson 7.16%
Carter 1.14%
Nixon/Ford −2.12%
Bush II −5.16%
Hoover −17.33%
Amazing! The president with the best inflation- adjusted, annualized return of the S&P 500 “under his watch” since the CRSP records begin in 1926 is OBAMA!
In aggregate and individually, Republican presidents are TERRIBLE for the S&P 500.
Annualized return of the S&P 500 since 1926 under Democratic presidencies: 13.74%
Annualized return of the S&P 500 since 1926 under Republican presidencies: 6.26%
Moreover, 8 of the 10 WORST YEARS for the S&P 500 occurred under Republican Presidents .
The worst years:
1931: -43.35% Hoover
2008: -37.00% Bush II
1937: -35.02% Roosevelt
1974: -26.45% Nixon
1930: -24.0% Hoover
2002: -22.1% Bush II
1973: -14.67% Nixon
2001: -11.87% Bush II
1941: -11.58% Roosevelt
1957: -10.79% Eisenhower
Facts. You gotta love them. Unless you’re a conservative.
December 31st, 2011 at 8:45 am
MS thanks for the cipher’g for this Jethro .. trickle down doesn’t work / the lowly need cash to recycle back up to the suppliers thus wealthier IF
thats not the game running tho – repossess to resell after the fire sale – the lands all bought up (& overbuilt at that)
I’m disturbed with – but understand* the CA garage fires .. is a prudent man to remove his windows and brick them in at this point in time?
*no I don’t – I have no idea – till a government paid psychoanalyst looks and files a report
January 1st, 2012 at 6:51 pm
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