News & Insights
December 6th, 2018

By The Numbers December 2018

1. THROUGH NOVEMBER – The S&P 500 has gained +5.1% YTD (total return) as of Friday 11/30/18, half of the index’s average return of +10.1% per year over the last 50 years (1968-2017). The S&P 500 consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market value weighted index with each stock’s weight in the index proportionate to its market value (source: BTN Research).

2. WINNERS FROM LAST YEAR – An equal investment at the end of 2017 into the 10 stocks in the S&P 500 that gained at least +80% last year is down a collective 1.1% YTD as of Friday 11/30/18 (source: BTN Research).

3. LOSERS FROM LAST YEAR – An equal investment at the end of 2017 into the 10 stocks in the S&P 500 that lost at least 40% last year is up a collective +14.7% YTD as of Friday 11/30/18 (source: BTN Research).

4. BIG BEARS – Since the end of World War II (1945), the S&P 500 has suffered 3 bear markets that sustained losses of at least 40%. The 3 bears are: (1) 48% drop in 1973-74; (2) 49% drop in 2000-02; and (3) 57% drop in 2007-09 (source: BTN Research).

5. SAME YEAR? – The S&P 500 is up +5.1% YTD (total return) through Friday 11/30/18. The Bloomberg Barclays Aggregate bond index is down 1.8% YTD (total return) through Friday 11/30/18. Both indices have not suffered a negative total return result in the same calendar year over the last 40 years, i.e., 1978-2017. The Bloomberg Barclays Aggregate bond index, calculated using 6,000 publicly traded government and corporate bonds with an average maturity of 5 years, was used as the bond measurement (source: BTN Research).

6. MY HOUSE, MY PIGGY BANK – “Cash-out refis,” i.e., a homeowner taking out a new mortgage that is larger than his/her previous mortgage and pocketing the difference, peaked in 2006 when American homeowners pulled out $320 billion of home equity during a rising housing market. Homeowners pulled out just $15 billion of their home equity through “cash-out refis” in the 3rd quarter2018 (source: Freddie Mac).

7. IN VOGUE AGAIN – Credit card debt in the USA peaked at $1.02 trillion in May 2008 before falling off during the global real estate crisis, eventually hitting a low of $832 billion in April 2011. However, credit card debt has now climbed all the way back to a record level of $1.04 trillion as of August 2018 (source: Federal Reserve).

8. SLOWING DOWN – The median sales price of existing homes sold nationwide increased +3.8% on a year-over-year basis through October 2018. That’s the smallest year-over-year growth in the median sale price in the USA since March 2012 (source: National Association of Realtors).

9. TYPICALLY, UP – As of 12/01/18, the economy of the United States has been expanding (i.e., no recession) for 113 months, the 2nd longest expansionary period in our nation’s history. The US economy has been in a recession during just 20% of the months over the last 100 years (source: National Bureau of Economic Research).

10. SUPPLY UP, DEMAND DOWN – The price of crude oil closed at $60.12 a barrel as of 12/31/17. The price of crude oil closed at $50.93 a barrel as of 11/30/18 (source: NYMEX). 

11. TARGET PRICE – The annual operating budget of Saudi Arabia, heavily dependent on the price of oil, required a breakeven crude oil price of $83 a barrel in 2017 and $85-$87 a barrel in 2018 (source: IMF).

12. FOUR MONTHS AWAY – The United Kingdom is scheduled to exit the European Union (EU) on Friday 3/29/19 after 46 years of membership. The “Brexit” decision was put in motion with a 6/23/16 vote. After the UK’s exit, the EU will be comprised of 27 nations (source: BTN Research).

13. LONG-TERM GUESS – When President Franklin D. Roosevelt proposed the Social Security retirement program in 1935, FDR’s financial people projected that total Social Security expenditures would reach $1.3 billion in 1980 or 45 years into the future. The actual Social Security outlays in 1980 were $149 billion. Thus, the analysts’ 1935 estimate represented less than 1% of actual 1980 Social Security expenditures (source: Social Security).

14. LOTS AND LOTS OF LAND – John Malone (cable industry billionaire) is the largest private property owner in the USA, owning 2.2 million acres of land. Ted Turner (cable media mogul) is # 2 on the “land-owning” list with ownership of 2.0 million acres of land (source: Quartz).

15. WHAT A PLAYER – Former NBA star Wilt Chamberlain scored a record 50.4 points per game during the 1961-62 regular season, including his incredible 100-point game on 3/02/62. Chamberlain shot just 51% for free throws during his 14-year career but shot 28-32 (88%) from the line on his 100 point night. The durable Chamberlain also played every second of every game (including overtimes) during the 1961-62 regular season (source: NBA).


IMPORTANT DISCLOSURE: The information contained in this material has been prepared for informational purposes only and does not constitute investment advice. Any mention of particular stocks or companies does not constitute and should not be considered an investment recommendation. Past performance is not a guarantee of future results. Any forward-looking statements presented in this material are inherently uncertain and cannot be relied upon as statements of actual performance.
Reproduction Prohibited without Express Permission – Copyright © 2018 Michael A. Higley. All rights reserved.