17% = 33%?
by Tom on October 16, 2009
in Market Musings, banks
Yeah, that’s right 17% of the stocks in the Dow make up over 33% of the gains since March. That’s not what I’d call a well distributed growth throughout the entire economy, would you?
Also, take a look at the chart below (courtesy of CNBC) and ask yourself the following questions:
- Has Bank of America done anything close to good enough to justify the 379% return that they have had in the last 6 months?
- What about American Express? They have gone up by over 231%.
- JP Morgan – the only “big bank” that made money in the 3rd quarter of 2009 is “ONLY” up a paltry 195%.
- Are these kind of returns justified given the state of the current economy?
- If you think, as I do, then what would you do differently to prepare for the time when the market comes back to reality?
Like I wrote earlier today talking about what Dr. Roubini said yesterday in a piece called, “Is the Rally Real?” there is a certain amount of the stock market rally that’s real but what is currently happening isn’t supportable by fundamentals.
Tom Vanderwell
5 Stocks Make Up 1/3 of Dow’s Gains Since March – CNBC By The Numbers – CNBC.com
Hovering around the 10,000 level again, the Dow Industrials [.DJIA 10062.94 --- UNCH (0) ] has advanced over 3,400 points since its March closing low of 6,547.05. Since the March 9 low, the price-weighted Dow has gained 53% – underperforming other market cap-weighted indexes like the S&P 500 (up 61%), the Nasdaq Composite (+71%), and the Russell 2000 (up 81%).While the Dow’s financial stocks have been by far the best performing stocks since that low (Bank of America up 379%, American Express up 231%, JPMorgan up 195%), other industrial and tech stocks have actually been the primary source of the Dow’s move higher.
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