The Worst Day for the S&P 500 in 17 Weeks

The S&P 500 lost 1.57% today. In historic terms, that’s not much. Still, it’s the biggest drop since October 2 so it may seem worse than it truly is. The index went 74 straight sessions without a 1% decline. That streak is over.

In terms of relative strength, this was a great day for our Buy List. In other words, we were down but by a lot less. All told, our Buy List fell by -0.70% today. That’s outperformance of 87 basis points which is quite big.

Talking about relative strength on days like today may seem strange. We’re saying that we had a bad day just not quite as bad as everyone else.

But here’s the important thing—our outperformance usually comes on the down days. The Buy List typically keeps pace with the stock market in bull markets and beats the market when the bear shows up.

That’s hard to explain to folks not familiar with the Buy List. Last year, for example, the Buy List matched the S&P 500. That’s actually quite good for us. Our “beta” last year was 0.812. Seven of our 25 stocks closed higher today, and 21 of our 25 stocks beat the market today.

When people get scared, they run to quality, and that’s us.

Posted by on January 27th, 2020 at 9:23 pm


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.