Various Looks at Sector Performance

Tuesday, February 06, 2007 | 11:30 AM

I was chatting with Michael Panzner about the relative performance of numerous sectors since the market top in 2000. In addition to being a Technician, Mike is the author of the forthcoming   Financial Armageddon.

We rejiggered a few starting dates, to see how when you bought specific sectors impacted your performance returns.

Consider these 3 different time frames:
>
2000 Market  Peak to Present
click for larger chart
Peaksectors_1_1
If you bought Telecom or IT in 2000, you are still buried, as those Sectors lost half their value.  Over the same period, Energy, Materials, and Consumer Staples all did very well.

 

>
March 1, 2003 (pre-war) to Present
click for larger chart

Sectors_030103_1

If you made your entries just before the War began in 2003, IT and especially Telecom did appreciably better.

However, they were outperformed by Energy and Materials. Additionally, Utilities, Industrials and Financials all did quite well, outperforming IT and Tel over the same period.

>

July 2006 (near market lows) to Present
click for larger chart

Sectors070106_1
Buyers since the July lows of 2006 of IT and Telecom  have finally outperformed Energy and  Materials, as well as Utilities, Industrials Financials and Health Care.


UPDATE: February 6, 2007 2:32 pm

Jack Ablin, chief investment officer at Harris Private Bank, says don't get too excited about the recent pop in Tech (see above). It’s not about fundamentals — it’s about oil prices.

“Tech owes much of its advance to the 30% decline in crude prices. Over the last three years, technology has acted like a puppet on a string, responding to advances and declines in oil prices,” he writes in recent commentary.” The correlation between the oil prices and the relative performance of technology shares has been a remarkable negative 70%.”

Beginning July 21 when oil was near $75 a barrel, through Jan. 12, a few days before oil bottomed out around $50 a barrel, the S&P 500 Information Technology Index rose 28% – the exact mirror of crude prices. Mr. Ablin says as long as this relationship holds, “technology bulls must be, by definition, crude oil bears.”

I agree.
As we have noted numerous times before, thank your friends at Goldman Sachs for the rally . . .


Source:
Greasing the Tech Stocks
David Gaffen
WSJ, February 6, 2007, 11:44 am
http://blogs.wsj.com/marketbeat/2007/02/06/greasing-the-tech-stocks/

Tuesday, February 06, 2007 | 11:30 AM | Permalink | Comments (8) | TrackBack (0)
de.li.cious add to de.li.cious | digg digg this! | technorati add to technorati | email email this post

bn-image

TrackBack

TrackBack URL for this entry:
https://www.typepad.com/services/trackback/6a00d8341c52a953ef00d834e13c4a53ef

Listed below are links to weblogs that reference Various Looks at Sector Performance:

Comments


Financial Armageddon?? The world's financial markets are 2yrs away from turning into dust?

Barry - I think you've become a permabear :-)

-l
~~~
BR: That's his book title, not mine!

I think the sector charts say something, and that is that tech has not been the place to be --e xcept when Oil/Materials do poorly

Posted by: laura | Feb 6, 2007 1:34:11 PM

The comments to this entry are closed.



Recent Posts

December 2008
Sun Mon Tue Wed Thu Fri Sat
  1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30 31      

Archives

Complete Archives List

Blogroll

Blogroll

Category Cloud

On the Nightstand

On the Nightstand

 Subscribe in a reader

Get The Big Picture!
Enter your email address:


Read our privacy policy

Essays & Effluvia

The Apprenticed Investor

Apprenticed Investor

About Me

About Me
email me

Favorite Posts

Tools and Feeds

AddThis Social Bookmark Button

Add to Google Reader or Homepage

Subscribe to The Big Picture

Powered by FeedBurner

Add to Technorati Favorites

FeedBurner


My Wishlist

Worth Perusing

Worth Perusing

mp3s Spinning

MP3s Spinning

My Photo

Disclaimer

Disclaimer

Odds & Ends

Site by Moxie Design Studios™

FeedBurner