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Where Did All The Alpha Go? These 20 Stocks!

Tyler Durden's picture





 

A highly correlated market - both across asset-classes and across individual stocks within the equity indices - is now well known. It's a stockpicker's market is the refrain. Well, as Goldman points out, a dramatically narrow leadership is running the show in S&P 500 performance this year. 20 companies (22% of market cap.) account for 55% of 2012 YTD return for the S&P 500. Pick away (and by the way CRAAPL accounted for 17% of the S&P 500's YTD performance until last night) as while correlation removes alpha so concentration removes liquidity.

 

Notably the Top 7 performers from Q1 are nowhere to be found in Q2...as crowding into dividend stocks seems the new normal... (remember the law of large crowds and small doors)...

 

Source: Goldman Sachs

 


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Wed, 07/25/2012 - 13:29 | Link to Comment Decay is Constant
Decay is Constant's picture

Beakes!  Where did you put that report!

Wed, 07/25/2012 - 13:39 | Link to Comment TruthInSunshine
TruthInSunshine's picture

Instead of QE, the Bernank will announce that the fed is going to buy out these 20 companies at a 14000% premium over par, and then immediately relist them at their 'new' and 'more better' price per share.

Go long the 50x leveraged ETF that represents a collection of the last 50 companies to IPO ("The New & Improved Winners of the Real World v.2.0"), regardless of any consideration of things like fundamentals (or even feasability), too.

Long live Modern Money Mechanics and The Bernank's virtuous circle.

Wed, 07/25/2012 - 14:37 | Link to Comment brewing
brewing's picture

cigs, coca cola and a cell phone.  what more does a person need...

Wed, 07/25/2012 - 13:35 | Link to Comment Rich Bagg
Rich Bagg's picture

I'm levered long and am planning my Ferrari order right now compliments of the perma-bears.  Shalom is my best friend.

 

 

Wed, 07/25/2012 - 13:38 | Link to Comment Doña K
Doña K's picture

We bears aready have the Ferraris since 2008

Wed, 07/25/2012 - 13:35 | Link to Comment Doubleguns
Doubleguns's picture

Herd mentality. They will be herded right over the coming clift.

Wed, 07/25/2012 - 13:36 | Link to Comment bagehot99
bagehot99's picture

It's all OK. The private sector is doing just fine. I know because Ochavez told me.

Wed, 07/25/2012 - 13:40 | Link to Comment The worst trader
The worst trader's picture

BTFD! HURRY!

Wed, 07/25/2012 - 13:42 | Link to Comment Silversem
Silversem's picture

I like leverage also. But I want to profit both ways, up and down. That is the freedom you have using cfd's

Wed, 07/25/2012 - 13:48 | Link to Comment Boilermaker
Boilermaker's picture

Damn, I didn't get the "let's pump these stocks, get long and levered" memo from Ben. 

Very odd.

Wed, 07/25/2012 - 13:52 | Link to Comment Dr. Richard Head
Dr. Richard Head's picture

Perhaps the upcoming Audit the Fed vote - http://www.c-span.org/Live-Video/C-SPAN/ - will show Benny buying up these stocks.  Not that the audit bill will pass the Senate.

Oh shit......the last time this Audit Bill was in the Senate, they had the May flash crash right at the same time Bernie Sanders sold out his own bill and the market levetation came back. 

Watch for the flash crash?

Wed, 07/25/2012 - 13:54 | Link to Comment adr
adr's picture

The market doesn't make any sense. The down days for certain stocks make sense because of terrible earnings or guidance. The 70% meltups over a few weeks don't. I look up some stocks and see them up 50% in a matter of weeks, and then look for reasons as to why. I can't  find an answer.

Like Nike. The guidance was terrible, earnings missed, and the stock fell. Since the fall the stock seems to be on a goal seeked algo drive for $100 a share on no real news.

If you look at the past month of the index chart, it looks a whole lot like the wacko algo charts of IBM and MCD from last week.

Someone at the Fed set a target and the HFTs are slowly bringing us there. Individual days are noise to hide the objective.

The HAL is in ful control.

Wed, 07/25/2012 - 18:01 | Link to Comment Umh
Umh's picture

Maybe algos don't listen to analyst?

Wed, 07/25/2012 - 13:58 | Link to Comment Rich Bagg
Rich Bagg's picture

Remember Jackson Hole 2010 when Shalom Cornholed the bears?  LMFAO

Wed, 07/25/2012 - 14:05 | Link to Comment Vincent Vega
Vincent Vega's picture

You any relation to RobotTrader?

Wed, 07/25/2012 - 14:04 | Link to Comment XenOrbitalEnginE
XenOrbitalEnginE's picture

Remember that while this is , eh,  entertaining to look at, the S&P 500 is only a small part of the market.  There are 1000's more things and, golly, a lot of them are Privately Held.  Other things are Global-Flagged-Megacorps, so flagged as part of "England", or "Bermuda", or that Haliburton fiasco of oil-money flipping.  "Burpoor".  Correct me if I am wrong, but Burpoor is near Arabia.

Wed, 07/25/2012 - 14:05 | Link to Comment JohnKozac
JohnKozac's picture
9 ways Facebook is getting slimy New moves aimed at making money are fine, but not when you anger users along the way.

 

Some of the moves were downright infuriating, such as switching everyone's email address to a facebook.com address. Others were just annoying, such as the new "sponsored stories" that now appear in feeds.

 

http://money.msn.com/top-stocks/post.aspx?post=0d114b61-e988-4b75-9080-3...

Wed, 07/25/2012 - 14:21 | Link to Comment Vashta Nerada
Vashta Nerada's picture

Heh, I own 5 of them

Wed, 07/25/2012 - 14:32 | Link to Comment q99x2
q99x2's picture

Capital flight (pension money) seeks safe havens (prepares for fleesing.)

Wed, 07/25/2012 - 14:39 | Link to Comment Downtoolong
Downtoolong's picture

so concentration removes liquidity

Yep, when everyone eventually tries to go the same way,  no one gets to go anywhere. Just ask JPM and Bruno how to freeze and destroy a market or two.

Wed, 07/25/2012 - 14:49 | Link to Comment Scalaris
Scalaris's picture

SPXU, DRV, SCO, QID, TWM.

Thanks a fckng bunch Ewald Nowotny for pumping this sht. God forbid if this casino reflects its fcked fundamentals for once. 

Wed, 07/25/2012 - 14:50 | Link to Comment KandiRaverHipster
KandiRaverHipster's picture

i'm the juggernaurt bitch!

http://www.youtube.com/watch?v=bSuvOVH0aSQ

Do NOT follow this link or you will be banned from the site!