If you’re frustrated with this market, especially after reading my posts about unchecked trading success, don’t be. This has been a really tough year for many people, especially if you went on overweight into the wrong sectors. Overall, the market is up roughly 1%, hardly a return worth getting excited about. Underneath the hood of that +1%, the divergence is drastic.
Basic Materials: -1.57%
Consumer Goods: -3.1%
Financials +1.9%
Healthcare +10%
Industrials -2.4%
Services +1.5%
Tech +6.5%
Utilities -1.7%
The +1% return I cited above includes ~5,000 stocks. The indices you see everyday have much smaller populations and boast solid returns. The Nasdaq is +15%, S&P +5%, and very weak and fat Dow is up only 1.5%.
Let’s dig even deeper.
Within the top two sectors, healthcare and tech, here are the biggest winners: healthcare plans is +21%, medical instruments and supplies +19%, application software +33%, security software +29%.
Within those two sectors, there are footprints to success that we can follow. I’m trying to show you how I build a profile to detect money flow in Exodus.
Stock with caps above $100b are up 10% in tech for the year. However, as we walk down the spiral staircase of the complicated tech world, we find a sweat spot at $5-10 billion, which sports returns of +23% — more than double the mega cap names.
In healthcare, the story is the same. The smaller the cap the better he return. Stock with caps between $1-5 billion are +30% this year, while the larger capped stocks are up less than 10%. It’s important to note micro caps under $1 billion are not fairing well.
What is the reason for this divergence?
I suspect it has a lot of to with positioning into domestic names that do not have exposure to Trump’s trade war. Also, when excess is abundant, investors love to speculate in small cap.
The one caveat, however, is FANNG. If incline, you can simply ignore everything I just said, hours of research and analysis, and buy Facebook, Apple, Amazon, Netflix, and Google. Had you done that in the beginning of 2018, you’d be up a genteel 37% this year.
Fuck my life.
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Good movie.
Could always just castrate the masses thru Tranny propaganda. Then Wall fucking Walla. Frustrated no moar. Confusion is the point.
Trade wars, wars in the mid-east bankrupting us, Trump being called a traitor for chatting with Russia ….yet your still focused on the MSM-pitched distractions of the day.
Just start wearing that flowered dress and pink pumps you’ve been eyeing. Come out – you’ll feel better.
Thank you. Good post.