Wolf Richter: 438 Stocks on the NYSE Have Already Plunged 40%-94% from 52-Week Highs

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23 comments

1. vidimi November 23, 2018 at 5:18 am

   re the weed companies, i am a believer that this market remains a long-term buy and, indeed, after last week’s crash, bought some more shares. the main reasoning is that as more and more places make the product legal, existing companies will be well positioned to capitalise on those new markets. i am also bullish on vegan meat alternative companies as that is another market that is growing year over year.

   war companies unfortunately also have a bright future though that’s something i wouldn’t touch.
2. The Rev Kev November 23, 2018 at 5:51 am

   A purging of excess liquidity in the markets? Maybe a realization that after recent international conferences, that the World Trade Wars are about to begin with Trump still in power? Must not be a good time to be a trader this Thanksgiving. Maybe with all the companies being shot down in flames, that this time around that it will go down in history as the Great Turkey Shoot of 2018.
   1. flora November 23, 2018 at 10:23 pm

      Barely into correction territory. Wonder if this almost-correction will knock some sense into the CalPERS loons who think PE investments always go up and only up. Probably not; the idea that a correction-level loss should be a wakeup-call is undermined by the idea that corrections are something to ride out and not a signal to change market assumptions.

      The problemo with short term thinking, imo, is it ignores the larger underlying forces. It takes underlying forces for granted as guaranteed for both now and future times. For example, the baby boomers who have been pushing the stock market prices via purchases for retirement (401Ks, etc,) income are starting to retire, and the following generations have been screwed (imo) out of the decent wages required to continue purchasing stocks in volumes and at values to continue the stock price rise. This is without regard to inflation values (real or otherwise) showing an increase in stock values.

      The stock market viewed as the future makes me wonder if CalPERS and other PE suckers are being burdened with past-sell-by-date dogs instead of future comers. The stock market is only a market, after all. I’m not out of the market but I look to the future. I fear CalPERS and other PE nebbishes are being stuck with outdated sales pitches. I suppose Blackrock has to unload their dreck someswhere….

      Hope everyone had a pleasant Thanksgiving.
3. Not From Here November 23, 2018 at 7:29 am

   Well then, something must have gone up, a lot, if the market’s only dropped roughly 10%?

   MIC? Certainly not Goldman Sac-of-shit or JP Morgan House-of-fraud.
   1. DHG November 23, 2018 at 8:28 pm

      You need to remember the DOW Industrials (a basket of only 30) is the number all see not a number of ALL Stocks on the NYSE.
      1. Not From Here November 24, 2018 at 3:53 am

         It’s barely a correction, technically speaking, with the S&P 500 down 9.9% from its all-time closing high, the Dow down 9.2%, the Nasdaq down 14%, and the Russell 2000 small-caps index down 15%.

         >10% then…
4. divadab November 23, 2018 at 8:00 am

   Return to reality. Informative to see the GE house of cards collapse – it’s been a company run by looters for some time. Note that the Fukushima reactor was built by GE. from wikipedia:

   “The reactor’s emergency diesel generators and DC batteries, crucial components in helping keep the reactors cool in the event of a power loss, were located in the basements of the reactor turbine buildings. The reactor design plans provided by General Electric specified placing the generators and batteries in that location, but mid-level engineers working on the construction of the plant were concerned that this made the backup power systems vulnerable to flooding. TEPCO elected to strictly follow General Electric’s design in the construction of the reactors.”
   1. pretzelattack November 23, 2018 at 9:08 am

      ge was also responsible for polluting the hudson river (iirc) . they’ve done a lot of damage over the years.
   2. Doug Hillman November 24, 2018 at 11:14 am

      GM is another creative-finance giant that’s likely to implode, as it did in 09 when it became Government Motors (w/out public ownership of course). The obvious solution will be to raid worker (not exec) pensions and further pervert the workers’ union to reach wage parity with Mexico…in the interest of fairness. The heat-tolerance of the American frog is astonishing.

      All of this will soon require a return to ZIRP — free money — the proven wealth-effect path to prosperity.
5. MoneyMoneyMoney November 23, 2018 at 10:54 am

   Except for Pension Funds, does this have any impact on the real economy?
   Have a hard time to cry for stock speculators.
   1. Grumpy Engineer November 23, 2018 at 11:54 am

      Does this have an impact on the real economy? Unfortunately, it can. Not directly, but instead when major stockholders freak out and scream at management, “DO SOMETHING!!”. And then management turns around and starts laying off employees to reduce short-term costs.

      I too have little sympathy for stock market speculators. Indeed, I feel that the stock market has far more importance in our economy than it should. But given how many times I’ve seen companies start laying off employees in response to sharp stock price downturns, I’ve learned to be leery of major stock market crashes. My preference would be for slow price declines that reduce the stock market’s importance and attractiveness to speculators, but alas, the stock market doesn’t take my wishes into account.
   2. McGardner November 23, 2018 at 12:36 pm

      There is no ‘except for pension funds’ unfortunately, since you can’t just grab your house and go. Taxing authorities are going to make up any pension shortfalls from stock market weakness by increasing property taxes. Even if you’re a renter, your monthly vig is going up one way or another.
      Could it be argued that a rising stock market is actually net positive for all ships(?) since property taxes affect the lower income quotient more on a percentage basis?
6. albert November 23, 2018 at 12:31 pm

   @Not From Here,
   “…Well then, something must have gone up, a lot, if the market’s only dropped roughly 10%?…”

   Well, no, not necessarily. Those stocks represent about 20% of the total number of stocks studied. In valuation (current price), only 6 exceed $100, and the only stock that exceeds $200 is at $755. I don’t have the value of all the stocks, otherwise I could demonstrate what would happen if all of these stocks went to $0. It would be interesting.
7. Jeremy Grimm November 23, 2018 at 12:41 pm

   It appears to me this market decline resulted from a general feeling of malaise without trigger by any one particular event. What will happen when one of the many threats hanging over the markets finally does strike?
8. Chauncey Gardiner November 23, 2018 at 1:07 pm

   Lengthy list. Given the lack of broad organic economic growth, perhaps this will lead to some reflection on policies and to some constructive legislation as the neoliberal-Wall Street version of capitalism is again being discredited in the only way its proponents seemingly understand. Moving up the chain of proximate cause, such policy measures might include overturning the Supreme Court’s Citizens United decision that would in turn enable the redirecting of federal deficit spending into productive purposes domestically to end secular stagnation and bubblenomics, restoring the Glass-Steagall Act, anti-trust breakups of large transnational corporations, laws restricting corporate stock buybacks funded with debt and private equity firms’ debt-leveraged buyouts that pick companies clean of their cash and income and bury them in debt in order to give big cash payouts to their looters, and improving consumer protection from financial predators. Believe such measures could contribute to sustainable productive investment, improved national economic performance, and social stability along with civil discourse.
   1. Hayek's Heelbiter November 24, 2018 at 6:00 am

      A very simple change in the tax laws. Return to the pre-Clinton law that all executive salaries and bonuses over $1m must come from PROFITS rather than pre-tax.

      A few words in the tax code would solve innumerable problems.
9. skippy November 23, 2018 at 2:24 pm

   I also love the crashnicks or shorter brigade [usual suspects] talking about all the wealth or money destroyed before any price was taken or its just notional in terms of FRN or FX.
10. John November 23, 2018 at 6:05 pm

    It looks like a lot of this was the unwinding of speculation. Blue Apron, Snap and some others were just hopeful valuations. Others like LG may be cyclical, that is, there business prospects soar and crash depending on recent, large orders. GE seems to be on a long term decline. It reminds me of General Motors. They used to make good cars and acquired companies that made good cars, then they got taken over by the finance guys and sacrificed quality and innovation for short term profits. Why does GE even exist? What synergy do they get out of making jet engines and refrigerators?

    Stock prices are very strange. It is not like entire companies are being bought and sold for the daily quoted price. A small fraction of shares are sold daily and that is the price that makes news.
    1. Lambert Strether Post authorNovember 24, 2018 at 1:10 am

       > hopeful valuations

       Or “The Bezzle.” Or outright fraud.
11. Joe Well (JW) November 23, 2018 at 7:12 pm

    What synergy do they get out of making jet engines and refrigerators?

    From Google:

    GE Appliances is an appliance company headquartered in Louisville, Kentucky. It is owned by Haier, a Chinese conglomerate.

    They’re just licensing the brand.
12. Not From Here November 24, 2018 at 4:05 am

    site admin:
    Seems putting a quote via quote button into posts stops it from posting.
13. Manqueman November 24, 2018 at 8:38 pm

    FAANG-mania was a lot of the markets’ rise for awhile now. Now that we’re not so blinded by those five, it’s pretty clear just how weak the market is, even with gratuitous buybacks.
    And another clue: Barrons’ weekly insider transactions have sales ~8x purchases.
14. Savonarola November 25, 2018 at 5:11 am

    My lord, that is a who’s who of the remaining heavy industry in this country. A lot of froth and crap in there too of course, but I’m talking about companies that still actually MAKE something. So much for the manufacturing renaissance.

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