WHAT ARE WE LOOKING FOR?
Stocks that gave the biggest bang for your buck - that is, if you were a perfect market timer.
MORE ABOUT TODAY'S SCREEN
Okay, let's be honest, today's stock screen is a bit pointless. It's impossible to time the stock market perfectly. You can get lucky once in a while buying a stock at its absolute bottom, but not often. All the same, it's a fun exercise to look at how you would have done if you had been able to. Today, we'll calculate price returns for members of the S&P/TSX composite index if you'd bought them at their 52-week lows. We'll sort by the biggest movers from their lows.
WHAT DID WE FIND OUT?
Presumably, most members of the index bottomed around the time the index bottomed in March. So if you bought stocks in March, let's hope your returns look like some of these. In fact, if you'd bought anything around March you probably made money, as there are no stocks in the composite that are currently trading at their 52-week low.
The highest returns came from stocks that needed financing or looked like they might be headed toward bankruptcy. If you believed that Teck's bankers weren't interested in seeing the company fail and that there were enough investors to refinance the company or buy some of its assets, then you would have made out like a bandit if you bought the stock in the spring. I know I wish I'd bought that one and it did cross my mind to in the depth of the spring panic.
But the truth is that returns of more than 1,000 per cent only come from being very brave, very prescient and very lucky. Just ask Nortel's last shareholders how gambling on stocks near bankruptcy can turn out.
Scott Adams