The Oldest of the Old Man Stocks

There are old man stocks and then there are olde man stocks. Some of you, like myself, play games in the stock market, hoping to insulate oneself against the never-ending barrage of sell orders that seem to be hitting the street of Wall–each and every day. Truth be told, our lives would be measurably easier had we just caved in and shorted everything we thought was good. Alas, one cannot live in the past. One must look towards the future.

When planning for my future, I tend to study the past, however. I like to see how sectors behaved during the hardest of times–times when good men turned to alcoholism to stop the pain, and when women did the dishes without gloves.

These are hard times, trying times: ask David Tepper. Born and raised in the disgusting and filthy city of Pittsburgh, PA, David quickly moved up the ranks at Goldman Ballsachs, then segued that success into America’s best run hedge fund. He now manages over $20 billion from the Short Hills shopping mall, where he gets nervous about things, prepares media presentations, and woks diligently on his small home in the Hamptons.

Not to take up the mantle of populism here, appealing to your inner anti-establishment hatred, but what does David Tepper know about “nervous?” Has he ever felt nervous about meeting his mortgage payment or having his car towed away for being delinquent? This is a man, mind you, who makes over $3 billion per annum. If I made $3 billion per annum, trust me when I say, I’d be completely and totally insulated from the world around me– working on spaced aged cannons and buying whole companies just to convert their offices into roaming carnivale trailers.

Do not trust David Tepper. But believe in the numbers, for they do not lie.

Let’s talk turkey. The oldest of the old man sectors is the utilities. Within that sector, EXC is the best performing stock, with a reliable dividend, liquid daily volume and mammoth market cap. For the purposes of this exercise, we will use EXC versus the worst months in the NASDAQ’s wretched history, dating back 14 years.

Jan, 2005: QQQ -6.3%, EXC +0.4%
Jan, 2008: QQQ -11.9%, EXC -6.8%
Feb, 2001: QQQ -26.2%, EXC +8.98%
Feb, 2008: QQQ -4.8%, EXC -1.01%
Feb, 2009: QQQ -5.27%, EXC -12.09%
March, 2001: QQQ -17.49%, EXC +0.35%
April, 2000: QQQ -13.47%, EXC +13.02%
April, 2002: QQQ -12.02%, EXC +2.52%
April, 2005: QQQ -4.36%, EXC +7.88%
May, 2000: QQQ -12.27%, EXC +5.96%
May, 2002: QQQ -5.3%, EXC -0.76%
May, 2006: QQQ -7.2%, EXC +5.6%
May, 2010: QQQ -7.39%, EXC -10.3%
May 2012: QQQ -7.04%, EXC -4.27%
June, 2002: QQQ -13.1%, EXC -2.18%
June, 2008: QQQ -9.61%, EXC +2.24%
June, 2010: QQQ -5.96%, EXC -1.63%
July, 2000: QQQ -4.29%, EXC +5.88%
July, 2001: QQQ -8.63%, EXC -11.9%
July, 2002: QQQ -8.62%, EXC -6.22%
July, 2004: QQQ -7.56%, EXC +4.82%
July, 2006: QQQ -4.3%, EXC +1.87%
August, 2001: QQQ -12.27%, EXC -2.6%
August, 2010: QQQ -5.13%, EXC -1.42%
August, 2011: QQQ -5.06%, EXC -0.86%
September, 2000: QQQ -12.66%, EXC +25.8%
September, 2001: QQQ -20.89%, EXC -18.3%
September, 2002: QQQ -11.82%, EXC +1.47%
September, 2008: QQQ -15.58%, EXC -17.56%
September, 2011: QQQ -4.5%, EXC -1.18%
October, 2000: QQQ -7.94%, EXC -0.49%
October, 2008: QQQ -15.47%, EXC -13.39%
October, 2012: QQQ -5.29%, EXC +0.58%
November, 2000: QQQ -22.9%, EXC +10.2%
November, 2008: QQQ -11.48%, EXC +4.69%
December, 2002: QQQ -12.09%, EXC +5.19%

The Average Worst single monthly drop in the NASDAQ, since 2000: -13.07%
During those respective months, EXC was -0.19%

Conclusion: When credit was an issue, as was the case in 2008, the utilities were horrid places to hide. You’d be much better served hiding in TLT. For those of you who are members of The PPT tribal army, feel free to use our seasonality tools and compare the QQQ to TLT for the years mentioned above. I already did the grunt work for you. The utes certainly possess a defensive quality, outperforming the NASDAQ by 13%, since 2000, in some of the most horrid trading months known to mankind. I’d be interested to see how the utility ETF, XLU, performed over the same time period. Or maybe a REIT ETF.

The bottom line: EXC is for old people who do not like getting blown to smithereens in tragic NASDAQ forays. If you should find yourself in need of non-tragic waters, look towards the utes in these trying times. Everyone else may proceed to juggle pin less hand grenades inside of plutonium factories (actually, it’s not nearly as dangerous as it sounds).

If you enjoy the content at iBankCoin, please follow us on Twitter