Apparently dumpster diving is the new thing that all the cool kids are doing. Stocks like $SHLD and $NFLX that were hanged, drawn and quartered in the fall are suddenly back in fashion. Netflix has bounced back nicely after their soon-to-be textbook display of how not to respond when bullied by content suppliers. And if Hollywood isn’t completely tone-deaf (longshot), hopefully they were able to pick up on a lesson in symbiotic interactions: push your luck too far and you’ll kill the host. “Netflix Killer” would probably be best kept off their resume going forward.
Getting back on topic, the January competition between Wall St.’s most and least favored stocks wasn’t even fair. Led by Netflix’s absurd 71% return, the trash pile nearly doubled the equal-weighted gains of the Chosen Ones, and actually accomplished this feat against the S&P 500, by raking in 10.46% for the month. However before we call these analysts hopelessly far-sighted, or worse, it’s fair to note that the hated stocks only managed 3.7% sans Netflix, and the favored stocks were more likely to beat the S&P 500 on an individual basis. Still though, there may be something to taking a group of hated stocks and spreading their individual risks among the group, thereby allowing the few diamonds in the rough to carry the team home.
So note to self (and ONLY self, see disclaimer), when Wall Street takes out the trash at the end of the year, go dumpster diving.