iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
23,484 Blog Posts

Macro Trends for Longer Term Investors

I am going to take a break from talking shit and boasting about how wonderful I am and actually provide you with a service, a view into the market to identify some longer term trends. Some of the complaints that I get for Stocklabs is that it’s geared heavily towards day trading, which is what I prefer to do. There are people out there, apparently, who work at companies and cannot trade 100 times per day. This post is for those work-slobs.

Median returns, 1 year
Median return for “all stocks”: -3.9%
Basic Materials -7.5%
Consumer Goods -7%
Financials -10.5%
Healthcare -8.8%
Industrials +9.6%
Services -3.1%
Tech +9.1%
Utilities -8.9%

As you can see from the data above just two areas of the market have been ‘safe.’

Now let’s look at those same sectors but affix a minimum market cap of $10b to them.

Median returns, 1 year (min cap $10b)
Median return for “all stocks”: +1.3%
Basic Materials -1.28%
Consumer Goods -7.7%
Financials -4.3%
Healthcare -7.4%
Industrials +6.5%
Services +5.7%
Tech +19.5%
Utilities -8.8%

Wow, we can make some easy assumptions here. We want to focus on larger capped stocks and avoid buying “cheap” small caps based on our narcism. With a minimum market cap, we see material improvement in the following industries: basic materials, services, financials and tech.

Let’s dig deeper into those areas. My assumption here, as a principle while investing — things in motion tend to remain in motion and today’s trend will be tomorrow’s. There are exceptions to this thinking, mostly when accosted by small cap stocks. But generally speaking, larger cap trends remain for long periods of time.

For the next set of data I am going to showcase the top 10 ranked stocks in basics, services, financials and tech using Stocklabs 1 year technical ranks, which is the aggregate scores on a 1-5 scale, 5 being best, for the past year.

Financials: $ACGL, $APO, $BBVA, $UBS, $ARES, $MUFG, $SMFG, $MFG, $AJG, $ING
Bascis: $PR, $SCCO, $LIN, $PAA, $MPC, $SLB, $BKR, $TRGP, $HAL, $DD
Services: $BLDR, $DKNG, $RCL, $UBER, $URI, $TTD, $ODFL, $RYAAY, $FDX, $USFD
Tech: $NVDA, $JBL, $SMCI, $AVGO, $ORCL, $META, $DELL, $ANET, $SAP, $SPOT

Analysis: My broad assumptions is there is a bull market in foreign domiciled banks, very large oil services, logistics operators and a heavy focus on tera cap monopolies with an emphasis on the proliferation of AI.

Here is some further insight into the type of companies being bought the past year:

Median, 1yr

Revenues: $19.9b
Earnings $1.9b
FCF $3b
FCF growth +39%
EPS growth +29%
Rev growth +9.9%
Gross margins +47%
Debt/market cap: 0.15x

The median market cap for the above stocks is $37b.

Conclusion: for longer term investors, take your portfolios and mine the data I just provided for you to compare and contrast. Once you find outliers in your portfolios, replace them with names that fit into this very specific framework. Ultimately, you’ll be investing in great companies and you’ll possess a clear vision for what deserves to be in your portfolios for the longer term and what is temporary.

I hope this helps a little.

Good day.

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One comment

  1. mrcharlie

    Thanks for this insight Fly 🙂

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