Interesting stats for you market lovers out there, courtesy of Exodus. When sifting through the market and applying a minimum daily trading volume of 500k, the median loss for all stocks this year is 12.45%. That’s significantly more than the break evenish the broader indices are showing now, no?
Check this out. Are you lads familiar beta? Essentially, it’s a measure of volatility. When a stock has a beta of 1, it should move with the market. A beta of 2, theoretically, should move twice the market. Investment planners usually incorporate beta to asses risk in a portfolio.
When I apply a beta of 2 to my screen, the median loss skyrockets to 43.5%. That’s way more than -12.45%. That’s an outrageous loss.
When I apply a beta range of 0.5 to 1, the loss lessens to just 3.7%.
Naturally, I am stripping out all important revenue and earnings power statistics that truly guide stocks higher or lower. This exercise is merely to paint a picture of how risk averse the market has been in 2015 and to shut the pie holes of indexers who query as to the ferocity of this tape.
Get this, stocks with market caps under $1 billion are down a median of 49% this year. And that strips out low volume crap, by inserting a volume filter of 500k per day. Here, take a look.
Conversely, stocks with caps above $1 billion are off by just 7%. When we apply a beta filter under 1, the loss lessens to just 2%.
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Now, listen to this and close your eyes for a few moments
(you have some rum on hand?)
http://youtu.be/vt3vPI3l0dw
I think the low-beta anomaly is well known. Some managers can’t lever, so they go yolo on high-beta stocks (which keeps them overvalued). When they blow, they blow.