It was an incredible year for global financial markets. Five of the most volatile years in stock market history have now occurred since the year 2000. It seems like the ‘shrinking world’, improved communication and social networks are increasing market volatility.
We thought it would be interesting to look back at the tickers that shaped the year. The most active tickers tagged ($ticker) on Stocktwits over the course of the year were:
$ES_F S&P Futures
$EURUSD Euro/US Dollar (Makes sense since 2011 was the year of Currency Intervention)
$QQQ Nasdaq 100
$CL_F Crude Oil
$GLD Gold ETF
$SLV Silver ETF
$BAC Bank of America
$RIMM Research in Motion
$GS Goldman Sachs
$IWM Russel 2000 ETF
$STUDY STUDY (Stocktwits created tag for a study link or idea)
$SINA SINA (Chinese company)
$BIDU Baidu (Chinese Company)
These tickers do cover a lot of ground as to the big stories, but there are many layers to the market which include the investors, the traders, the companies and the tickers. Month to month, StockTwits members captured snapshots of the big moves and trends on Chartly, often before they happened, and shared the messages on the stream.
Over the course of twelve months and millions of messages, It is fun and informative to look at the data from milllions of messages from the last 12 months. There are many ways we intend to go deeper because it will make us smarter investors. At Stocktwits we are building a platform for you to research and discover the right ideas from the right people at the right time. It really happens.
Semicondutor stocks and more specifically anything that was considered a smart phone play, went bizonkers in January. Big beneficiaries were $ARMH, $MIPS, $ENTR, $APKT, $ATML…Even large cap $NVDA had a record start of the year – it went up 80% in the first 6 weeks of 2011 (it finished the year down 10 percent).
Momentum can destroy even the most solvent investors (if not their pocketbook…their ego, confidence and reputation). This February, Withney Tilson threw in the towel after stubbornly trying to short the “freight trains” $NFLX, $GMCR, $LULU, $OPEN. Ironically 3 out of those 4 stocks finished the year at least 50% below their February highs. A classic reminder that valuation may show you what and why to short, but not when.
Green Mountain Coffee $GMCR reached new all-time highs. It went on to triple over the next 7 months. Plagued by suspicions of accounting irregularities and heavy short selling, it gave up most of its gain in the last 3 months of the year.
@Tea8207 highlighted the forthcoming short squeeze on February 17, 2011:
Social media stocks reached for the sky. $SINA (aka the Twitter of China) was the only publicly traded direct play of the industry at the time. It more than doubled in the first 4 months of the year, only to finish with a loss. $SINA was not able to escape the reputation guillotine applied to anything China related after a number of Chinese reverse merger ADRs were caught in creative accounting schemes.
Also in March, most uranium related stocks lost 50% or more of their market cap in a week after the devastating earthquake in Japan endangered the safety of several nuclear reactors. This move came as a shock for many market participants as many of the uranium stocks had tripled and quadrupled in the last quarter of 2010 in expectations nuclear would play a significant role in the world energy supply. Most uranium stocks finished the year significantly below even these March lows. $URZ pictured below closed below $2.
Silver went parabolic. The reflation trade was on in full force at the time, and precious metals were the big beneficiaries. Silver went up 70% in the first 4 months of 2011, only to finish the year down 10%.
$LNKD completed a very hot IPO. They offered only 5% of the shares outstanding, which created tremendous volatility. This approach was later adopted by $GRPN and $ZNGA. All stocks finished the year below the opening print on their IPO day.
Greece appeared on the front pages and the stock market entered into severe correction. Coffee stocks were still hot and making all-time highs on an almost daily basis. ($GMCR $PEET $JVA)
$RIMM accelerated its free fall as it continued to lose ground against iPhone and Android-powered devices. By June, the “The Candadian Calculator”, had lost 50% of its market cap. Who would have thought at the time that, it has anotehr 70% of downside for the rest of the year.
@1nvestor pointed the trouble just in time for those willing to monetize it:
Treasuries broke out from a major resistance. $TLT gained 29% for the year, turning into the best performing asset class for 2011.
McDonald’s reached an all-time high and went straight up from there. The fast food chain gained 30% for the year. In fact, 2011 turned out to be a very good year to fast food. Pizza stocks rocked, two of them doubled ($PZZI, $DPZ) and even I like the ‘Artisan Pizza’ from Domino’s.
Also in July, most major bank stocks were the first to break down to new 52 week lows, foretelling the near-term destiny of the rest of the market. Later in the summer, Warren Buffet followed the advice of his rubber ducky and tried to fill the holes in Bank of America. His time horizon is forever, and his security much safer than your common stock, so his actions tell little about what to expect in the financial sector for 2012.
The season of waterfalls. Stocks went into heavy correction as European sovereign debt issues reappeared on the front pages of the mainstream press. The U.S. government debt rating was downgraded. Gold became the ultimate safety trade. The yellow metal blew through the top rail of its long term bullish trend channel was the beginning of the end for the metal’s decade long outperformance. The seeds of a classic blow off. @puck2 caught it as it was happening:
Volatility launched a quest to crush mean-reversion traders. $VXX appreciated another 50% after a double before that in August. Netflix started the month at $230 per share and finished it at $115. The provider of online video streaming finished 2011 at $70, 60% below its opening print a year ago.
Some of the most powerful short-term rallies happen during bear markets. U.S. equities had their best October since 1938. Coming back from a lackluster August and September, the Nasdaq Composite gained 11%.
Steve Jobs passed away and Apple was not crushed. Some say that “Steve Jobs leaving” was already discounted by the market, but only time will tell if this was the case.
Almost everyone was sceptical on the continuation of that October 4th bounce. The market did what it does best – it surprised the majority and proceeded higher. @Gtlackey highlighted the divergence eloquently:
The Euro resumed its downtrend, once it became clear that both debt monetizing and further austerity measures will weaken the Union’s currency. On the bright side, vacations in Italy are cheaper today.
Cloud stocks (save Rackspace $RAX) – the last bastion of momentum, suffered a severe correction. Oracle dropped 18% and Amazon shed 10%. Speaking of Amazon, the ultimate beneficiaries of record online sales in 2011 turned out to be Visa and Mastercard. It doesn’t matter where you shop, the credit card companies are getting their cut.
We hope you enjoy this quick review of the tickers that shaped 2011. Happy New Year! Wishing you an even more prosperous 2012!