It was the best of times and the worst of times. Markets took off like a fucking tunnel digger, early in 2016–ransacking the portfolios of millions. While Peter Thiel was conjuring up revenge plots against fellow homo-hammerer, Gawker’s Denton, world markets peered over into the abyss and said ‘not interested.’
Since mid-February, gains have been bountiful. Providing you were able to navigate the rugged terrains, you made a King’s ransom long commodity related stocks, since $26 WTI. If, however, you kept the same old boring, diversified, long-term portfolio, you likely made less than 3.6%.
Using some broad stroking data points, via Exodus, here were the standout industries.
Downside
Solar -33%
Nuclear -27%
Dept Stores -23%
Biotech -22%
Drugs-Generic -21%
Tankers -20%
Airlines -14%
Upside
Silver +114%
Gold +78%
Industrial Metals +29%
Steel and Iron +21%
Synthetics +20%
Foreign Utilities +19%
Water Utilities +17%
Waste Management +17%
Insurance Brokers +15%
Of the mega-cap stocks, here’s what worked and didn’t.
Downside
AAPL -3.5%
GOOGL -3.5%
MSFT -4.3%
WFC -5%
NVS -3.4%
DIS -4.5%
BAC -11%
TM -18%
INTC -6.7%
Upside
XOM +17%
BRK’a +8%
FB +14%
AMZN +5.4%
T +16%
WMT +17%
PG +4.2%
PFE +9.2%
VX +12%
Anyone else notice something about the data I just posted? Let’s see if we’re working on the same wavelength.
TLT was up 8.5%
PHK (PIMCO High Income Fund) was up 22.5%
AWF (Alliance Global Income Fund) was up 15.5%
PCK (Cali munis) were up 10.5%
Get it? Okay, I’ll make it unforgettably clear.
The median return for all 4,322 stocks in Exodus was 2.04% for the first 6 months of the year. If we filter out companies who did’t pay dividends, the year to date gains skyrocket to 6.1%. When I exclude companies whose market caps were less than $1 billion, gains jump again to 7.55%.
Stocks whose market caps were under $1 billion posted a collective -5.2% return for the first half.
In summary, markets sought out and found yield. That’s the big story. The small story is how we’re in a bull market again and how, eventually, this drive for yield trade is going to unravel.
Show me the evidence.
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The problem with having a time machine is sometimes you can lose sight of what time it is. First half of the year commentary and stats referenced here at the end of May?