RE: Historic prices
Yahoo! research goes back long enough to cover Intel in 1983. Most often, the Investor Relations site of each company has a historic section of prices, splits, dividends, acquisitions, etc... that offers exactly what you need. My favorites are Coke, General Electric and Disney - in terms of IR sites.
Once again, as Mike mentioned, the collected data will most likely not fit together to create any kind of a 'puzzle' one can use to garner any pattern. Even if we knew the specific valuation metrics of each company going into each correction/recovery phase, what we would be able to draw as a conclusion? On top of that, we would need to know the exact scenarios in the economy and market sentiment for each phase in the past that created the correction scenario. And most of it had nothing to do with a particular company's ability to grow their business.
In most cases - a correction does not discriminate. Pretty much everything gets thrown out and thrown out hard - regardless of valuation metrics at the time. A company like Intel, Microsoft, Cisco or Oracle may have actually been valued quite well in the fall of 1990. However, war is war and the Gulf war and bear market that took place wasn't really concerned about valuations or business growth at that moment. What about 1992, 1994, 1995, 1996, 1997 (2 corrections), 1998, 2000? There is a pattern here and corrections happen - for a variety of reasons. So our desire to collect any data to try and make sense of it might be a fruitless waste of time. Through all of those periods, a plethora of companies continued to execute, grow their business, improve their margins and offer shareholder return.
I guess a case could be made that when the opposite is happening and the market is joyfully running up - most everything gets caught up in the swell regardless of valuations and concerns as well.
Whether the correction phase was caused by war, interest rates, economic cycles, valuation concerns, sentiment induced FUD, opinions from major brokerage houses, DOJ case with a major global technology company, or whatever - history has proven that with all the cash sitting on the sidelines, a 6% or less per year return via other instruments is not significant for building wealth for the majority of investors if a real world return of near that is needed to simply keep your cash 'even'.
The great companies will continue to execute, increase revenues over time and do what they do best - make money. The money will come back into the market at some point and the growth of the types of investments we invest is what will prevent that money from being satisfied with a 6% annual return. How many years does it take to double your money at that rate? Even if one has gone through the past 14 corrections in some shape or form as an investor, plenty of evidence abounds to support being invested through it all has outperformed other strategies.
"Most market timers are out of the market when stocks go up and are in the market when stocks go down, and most turn into long term investors after they lose money consistently. Long term investors handle the volatility by thinking long term and not worrying about the short term swings. The only thing that matters is that the growth of the business continues.*"
*Todd Shaver - The Bull Market Report
That being said, knowing the growth outlook for companies like Siebel, Qualcomm, JDS Uniphase, EMC, Cisco and others doesn't appear to have changed since last November/December. Most share prices are around those levels and in spite of 4 months having gone by and the rise and fall in momentum - our companies look poised to continue what they do best. We simply have to allow them the 'time' to do their work. Money will come back into them over the next few quarters and years if the trend continues.
BB |
