I guess everyone went home…
Back to the Future
As a side note to yesterday’s 1994 Revisited: We mentioned that the top 50 capitalized Financial Sector names were the worst performing group in 1994 during the period of Fed’s tightening of monetary policy. It has been a focus of a number of articles that discuss that time period. However, in reviewing our notes, we note something that has been lost in the shuffle. Although that group lost 7.4% during 1994, the rebound in 1995 was significant. Despite the fact the Fed Funds rate continued to rise another 50 basis points in the first few months of the year, the 50-largest financial stocks returned 45.7% in 1995.
The group returned positive results in each month of 1995 including returning almost 11% by the end of February. Each of the top-10 capitalized names showed gains (and significant gains at that) for 1995.
In the wider 50-largest, the win percentage was an amazing 95%, and the win:loss ratio was a whopping 97:1.