Understanding the Cycle

I wanted to post this chart of Walmart’s relative strength going back more than 25 years. In other words, this is WMT’s share price divided by the S&P 500.

The reason this chart is interesting is that you can clearly see the cycles at work. Walmart either outperformed or underperformed the market for years at a time. The hard part, of course, is knowing when the cycle flipped.

For the most part, WMT did well against the market during tough times, and it lagged against the market in better times. That’s what you can expect from a large-cap blue chip such as Walmart.

As I look at the market, WMT is currently the #1 performer in the S&P 100. That’s also a good sign that today is a more defensive day for Wall Street.

Posted by on January 17th, 2017 at 12:31 pm


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