A few weeks ago we did a post that detailed the combination of the 4 year presidential cycle with the January effect in small caps. (Older post here.) The quick summary is that tax selling, window dressing, etc push down beaten down small caps, and if you buy a basket (or even the Rus 2k) mid Dec then by mid Jan or end of Jan historically has done fantastic. (Risk averse investors can hedge out the broad market with shorting the S&P 500). There is a huge amount of research out here, and for those that subscribe Ned Davis has a great piece out on the topic. Below are a few simple screens, as usual do your own DD as we don’t own any, nor intend to buy any. This is meant for ideas only, and should be a starting point for your research.
Small (Min $100M market cap, down at least 70% YTD)
Really Small (Min $10M market cap, down at least 70% YTD)
Small Quality (Min $100M market cap, down at least 60% YTD, but only took top half by these factors P/B, P/S, EV/EBITDA, Debt/Assets)
Ironically, this year may see another effect due to pending tax changes, and that is people selling high dividend stocks.
Dividend selloff (Min $100M market cap, > 10% dividend yield, worst 10 stocks by 4 week return)
A few non stock ideas for the holiday challenged gift givers:
Other ideas include homeade gin, leather touchscreen gloves, sake bottles, and drive a tank… I’m buying some of these for XMas for my family, but since none of them read my blog I have little to worry about…
One of my favorites for the ladies in your life is Wantful (lets you curate down to 3-10 choices, then they mail a pretty book that let’s them choose the final).
And if you’re going to send me something, I love good tequila as long as it’s not Patron…