There's something about round numbers and anniversaries that appeals to our sentimental instincts. It's one of the things that separates us from machines, and investors from trading algorithms.
This past Friday marked a momentous date in global market history: It was exactly nine years ago that the stock market crash ended. Although it was far from evident on that day – March 9, 2009 – the recovery was just getting under way.
That day would prove to be one of history's great buying opportunities, which, incidentally, then-U.S. president Barack Obama foresaw in what will go down as a market call for the ages. With most national indexes in the developed world down by at least 50 per cent over the preceding 12 to 18 months, Mr. Obama said: "What you're now seeing is profit-and-earnings ratios are starting to get to the point where buying stocks is a potentially good deal if you've got a long-term perspective on it."
In less than one week, the bottom was in. And over the following nine years, the S&P 500 index would rise by 311 per cent, and closer to 400 per cent once reinvested dividends are factored in. Annualized, the index's total return over that time was just shy of 20 per cent – a remarkably lucrative average for a nine-year period.
It's a matter of some dispute, however, as to how old that makes the bull market. The consensus seems to peg last Friday as the ninth birthday, making this the second-longest bull in history.
Others figure the bull market is nowhere near that old. Rather than the market's turning point nine years ago, the start of the bull might instead be considered to be the date an index recovered its pre-crash high. For the S&P 500, that didn't happen until March, 2013. For the S&P/TSX Composite Index, it was June, 2014.
"March 2009 isn't a birthday, but rather when the patient left the intensive care unit and was moved to a recovery room," writes Barry Ritholtz, the founder of Ritholtz Wealth Management and a Bloomberg columnist.
It's no mere pedantic distinction. The age of the bull market itself is often cited as a key risk by those who predict its impending demise.
Meanwhile, few are arguing over the state of the Canadian market in quite the same way as they do stateside. As one of the developed world's laggards since the market turned, the S&P/TSX Composite Index has advanced by a relatively paltry 105 per cent in the nine years up to the end of last week.
A list of Canada's biggest movers over that time sheds some light on the cause of the underperformance.
Among the winners, Canada's two biggest sectors – financials and energy – have no representation. There are also no miners, with stocks from the materials sector limited to packaging and forest products.
It's worth pointing out that posting a gain in excess of 1,000 per cent generally requires a depressed starting point. Three of the biggest winners in the Canadian index – Intertape Polymer Group Inc., Cott Corp. and Western Forest Products Inc. – were trading below $1 a share at the deepest part of the market crash.
That disqualifies most of the market's mainstays from the biggest-winners' list – the big Canadian banks would never get the luxury of starting from penny-stock territory.
But a comparable list of the biggest U.S. winners over the last nine years is dominated by technology, health care, and consumer names. Those same sectors have been favoured for so much of the bull market, as growth styles have dominated value investing. And it's in those same sectors that the Canadian stock market has so little to offer.
Where Canada does exceed is in natural resources, which were in abundance among the biggest laggards. All but two of the worst-performing stocks in the index over the past nine years are in resource sectors – five gold miners and three energy producers. (These are just the declining stocks that have managed to remain in the S&P/TSX composite index.)
Rounding out the bottom 10 in Canada: BlackBerry Ltd. and TransAlta Corp.