Aug 27, 2024
In today’s “$10,000 in…” series, we’re taking a look at NIKE (NKE).
NIKE, Inc. (NKE) was founded in 1964 as Blue Ribbon Sports by University of Oregon track athlete Phil Knight and his coach Bill Bowerman. Initially, the company operated as a distributor for the Japanese shoemaker Onitsuka Tiger, selling shoes out of Knight’s car at track meets. In 1971, Blue Ribbon Sports rebranded as Nike, named after the Greek goddess of victory, and introduced the iconic “Swoosh” logo. The company rapidly expanded its product line and marketing efforts, becoming a leading athletic footwear and apparel brand. Nike went public in December 1980, with its initial public offering (IPO) marking the beginning of its ascent as a global sportswear powerhouse.
Below is a look at the growth of a hypothetical $10,000 investment in shares of NKE at the start of 1990 (ex any initial trading costs) with dividends re-invested back into company shares. As of 8/26/24, $10k in NKE at the start of 1990 would be worth $1,534,600 today. That’s a gain of more than 15,000%.
While going from $10k up to $1.5 million is nothing to sneeze at, this was actually above $3 million at NKE’s peak in late 2021. Shares are currently in a 52% drawdown and are about where they were trading five years ago in August 2019.
As always, past performance is no guarantee of future results!
We wrote more about NIKE (NKE) and its potential as a turnaround play in a recent Bespoke Chart of the Day. To read it, simply sign up for a trial to one of the two Bespoke membership options shown below. Click here or on the image below to sign up for a two-week trial today!
Aug 22, 2024
In today’s “$10,000 in…” series, we’re taking a look at the gold ETF (GLD). The SPDR Gold Trust (GLD) began trading nearly 20 years ago in November 2004. It marked the first time that investors could easily allocate funds to gold in a brokerage account.
When GLD began trading on 11/18/2004, it had total assets of just under $600 million after its first day of trading. By the end of 2004, AUM had more than doubled up to more than $1.3 billion.
Today, GLD has more than $68 billion in AUM. At its last quarterly filing, it held more than 26 million ounces of physical gold valued at more than $62 billion.
So what would a hypothetical $10,000 investment in the GLD ETF on its release date in November 2004 be worth today? As shown below, $10,000 would now be worth roughly $52,000. That’s an annualized return of about 8.73%. Not bad for a piece of metal, right?
How does that $10k investment in GLD when it began trading nearly 20 years ago compare to something like the stock market? If we use the S&P 500 ETF (SPY) as a proxy for US large-cap stocks, a $10,000 investment in SPY on the same day that GLD began trading back in November 2004 with dividends re-invested would be worth about $68,725 today. That’s an annualized return of roughly 10.2%, or about 1.5 percentage points better than GLD annually. You can see how both GLD and SPY got to their current levels in the chart below.
As always, past performance is no guarantee of future results!
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Aug 22, 2024
Last year when mortgage rates and gas prices were rising steadily day in and day out to multi-decade highs, we created our MORTGAS Misery Index that is simply the sum of the 30-year fixed mortgage rate and the cost of a gallon of gas.
Below is an updated look at both gas prices and mortgage rates.
The national average 30-year fixed mortgage rate according to Bankrate.com is currently down to 6.86%, which is the lowest level seen since seen May 11th, 2023. As shown below, the peak for mortgage rates during the current cycle was 8.09% on October 25th, 2023.
Longer term, of course, mortgage rates remain very elevated. They would need to fall another 40 basis points down to 6.45% to get back to the peak readings seen in the mid-2000s prior to the Financial Crisis.
Gas prices have also been falling steadily since peaking in the spring (which is usually the case from a seasonal perspective). Using AAA’s national average for a gallon of regular unleaded, gas prices are currently at $3.387/gallon. That’s down about 30 cents from the peak price seen so far in 2024 of $3.679 on April 18th. Prices are down about 50 cents from their September 2023 peak of $3.88/gallon.
Longer-term, gas prices are currently about 50 cents above the 20-year average of $2.89/gallon. The low-point of the current decade came on April 28th, 2020 when the national average hit $1.768/gallon. The high point came on June 13th, 2022 when prices ticked just above $5/gallon ($5.016).
Combined, our MORTGAS Index currently sits at 10.2. As shown below, the index is down 1.46 points from its record high of 11.66 seen in late 2023, but it’s still extremely elevated relative to the last 20 years. Looking on the bright side, the index is now back below its peak seen in 2008 during the Financial Crisis, but we’re going to need to see significant further easing to get back to the 20-year average of 7.62. A drop like that would likely mean mortgage rates falling at least into the 4-5% range and gas prices remaining closer to a 2-handle than a 4-handle.
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