10 Stock Winners In A Market Crash

Aug. 19, 2013 3:12 PM ETCHD, CLX, FDO, FLO, GIS, HAS, IVV, KR, MCD, PNRA, ROST, SPTN, SPY, SWN, WMT3 Comments
Kipley Lytel, CFA profile picture
Kipley Lytel, CFA
74 Followers

Stocks have enjoyed a multi-year bull run, driving the S&P 500 ("S&P") to a new record high in early August. Equity markets have since started to consolidate with a pull back and memories of past capital market turmoil are being rattled awake by market prognosticator warnings of a reset and summer sell-off. Traders have also been alarmed by a technical pattern of closely clustered signals (11 times in 50 trade days) portending a market crash, referred to as the Hindenburg Omen.

Perhaps the markets may just be blowing off excess steam and regrouping before the next leg up. Yet, there are also real fundamental metrics in play with earnings growth headwinds emerging in corporate bottom lines. This quarter's average S&P (SPY) earnings increase is only beating estimates by about 1% and the year's EPS growth overall has been rather tepid after the powerful results from financials are netted. Even with the Fed brandishing a heavy hand toward stimulus cuts and signaling hawkish stance on interest rates, stock valuations are undeterred; clinging to silver linings of recoveries in housing and employment, along with economic resiliency.

Should things turn ugly in the markets, then investors who choose to 'hold' and ride out the storm can benefit from knowing where it historically has paid to hide during negative market jolts. Market events coined black swans can wipe out years of positive portfolio gains in a matter of weeks. Looking back at recent periods of severe losses or crashes - 1987, 2001, 2008 - markets were blindsided with a furious collapse. It is not always just the equity asset class that falls victim either, as 2008 savaged almost everything except treasuries and precious metals.

Retail and institutional investors alike should be alert of which stocks have held up admirably in past episodes of market

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Kipley Lytel, CFA profile picture
74 Followers
Kipley J. Lytel, CFA frequently contributes his financial market views and opinions to the media as an investment expert and author. He currently serves as Managing Wealth Advisor and Head Portfolio Manager with Montecito Capital Management Group, a Registered Investment Advisory firm headquartered in Santa Barbara, California. His professional expertise stems from over 20 years in portfolio manager and analyst roles at private funds and investment firms. Lytel received his Master of Business Administration (MBA) from the Peter F. Drucker School of Management at Claremont Graduate University (Fellowship) and he also holds a Bachelor of Arts (BA) degree in Economics from the Claremont Colleges. He is a CFA Charterholder and is an active volunteer member of CFA Institute.  http://www.mcapitalmgt.com

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