The Buy List Suddenly Wakes Up

Our Buy List has been lagging the S&P 500 for much of this year, and it seems as if our seven-year market-beating streak is in jeopardy.

The market’s recent downturn, however, has been good for our Buy List. Or more accurately, we’re down but not as much as the overall market.

Our goal, of course, is to make money, not to suck less than everyone else. Since September 29, the S&P 500 is down 5.21% while our Buy List is down 2.77%. That’s a significant margin considering how broadly diversified our Buy List is. Consider that the correlation of daily changes between our Buy List and the S&P 500 is more than 93%. Being down half as much is not normal. Our “beta” usually runs about 0.95.

What happened is that when people get nervous, they don’t abandon the high-quality names on our Buy List as rapidly as they do for less-stable stocks.

For the year so far, our Buy List is down 1.01% while the S&P 500 is up 1.43%. If the trend of the last two weeks continues, we may close the gap even further.

Posted by on October 13th, 2014 at 10:01 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.