Happy Thanksgiving! 2023 YTD Winners

Nov 24, 2023

The average Russell 3,000 (a combination of the large-cap Russell 1,000 and the small-cap Russell 2,000) stock is up just over 5% year-to-date on a total return basis.  Below is a list of the best performing stocks in the index so far in 2023.  All 28 stocks are up more than 200%.

The problem with some of this year’s big winners is that they’re still down significantly from highs made a couple years ago.  For example, below is a list of stocks that are up more than 100% this year but still down at least 25% over the last two years.  If you managed to buy these names in early 2023, congrats.  If you bought them towards the end of 2021, however, you’re still not even close to getting back to even.

To weed out this year’s winners that are still in massive drawdowns, below is a list of stocks that are up more than 100% this year and also up more than 75% over the last two years.  The list below contains the 27 stocks in the Russell 3,000 that fit this bill.  As shown, Super Micro Computer (SMCI) is on top with a 249% gain in 2023 and a 583% gain over the last two years.  Other names on the list that you might know include elf Beauty (ELF), Vita Coco (COCO), Abercrombie & Fitch (ANF), Duolingo (DUOL), and Builders FirstSource (BLDR).  The rest of the names on the list are more than likely names you haven’t read much about before.  If you have some time over the long Thanksgiving weekend, though, give them a look!

The Rise of the Mega-Caps

Nov 13, 2023

In our latest Bespoke Report newsletter sent to subscribers last Friday, we provided a helpful illustration on the rise of the “mega-caps” over the last decade or so.  Below is a look at the market caps of the 25 largest S&P 500 stocks ten years ago versus today.  Take a close look.  The 25 largest stocks in the S&P 500 now make up nearly 50% of the index versus just over a third ten years ago.  Back in November 2013, the three biggest stocks all had weightings below 3%, while four stocks now have weightings above 3.75%, including Apple at 7.3% and Microsoft at 6.9%!  Apple, Microsoft, Alphabet, and Amazon had a combined market cap of about $1.3 trillion ten years ago.  Now each is larger than that combined number!  As you also might notice, stocks 8 through 25 on the current list have weightings relatively close to their weightings from ten years ago, so it’s really just the biggest of the big stocks that have ballooned.  This also tells you that virtually all the market’s gains in the last decade have come from these handful of stocks, so if you haven’t owned either these stocks or “the market,” you’ve likely lagged “the market” badly.

Below is a graphical representation of the market caps for every stock in the S&P 500 today versus ten years ago, sorted from the smallest stock in the index on the left to the largest stock in the index on the right.  Look at that parabolic rise of the mega-caps!