To The Moon

If you asked me, I am really quite happy & contented with the level of technology and its penetration / involvement / relevance in our lives.

I could still recall the wandering years to Europe, armed with a travel bible - Let’s Go Europe! and actual maps (of visiting cities).

Nowadays it’s still the same except it’s all in the palm of my hands courtesy of:

• My trusty Huawei Mate 20 Pro.

• Roaming data plan.

• And of course, Google Map.

Apologies, I have digressed! Coming back on track…

What I am trying to say is, I know I have the “perfect” daily discussion post materials (in my mind) for Fri, 24 Nov 2023.

However, a quick “Google” led me to a post that is similar in content and more ….

I would like to share it with you. Enjoy! (see below)

After a sumptuous Thanksgiving dinner on Thu, 23 Nov 2023, the spotlight shifts to Black Friday.

Unofficially, it signals the start of the holiday shopping season.

For retail investors (like myself & us), this week serves as an enlightening period for stock observation.

The historical performances of US stocks in the aftermath of Thanksgiving (from Black Friday onwards) is the discussion topic I had on mind and wanted to write about.

Let’s discover whether this post-Thanksgiving period will be (a) a reliable indicator for stocks and (b) explore potential impact (if any) on future market trends.

Week after Black Friday (BF) - from 1990

Above table summarizes the $S&P 500(.SPX)$ performance in the week after Black Friday.

• Data compiled was since 1990.

• Overall, for the week after BF, it has been bullish with an average return of +0.65% gain versus a +0.17% gain for all other weeks.

• Additionally, percentage of positive S&P 500 stocks (@65%) is higher than all other weeks (@56%).

• Writer Rocky assumed there might be higher standard deviation during the week because of reactions to the retail shopping data, but that has not been the case.

Week after Black Friday (BF) - from 2010.

By restricting the sampling years (data), it yielded a slightly different outcome — more bullish. (see above)

• Data compiled was from 2010 to 2022.

• From 2010 to 2022, all 13 weeks after BF have been bullish with an average return of +1.42% gain versus a +0.22% gain for all other weeks.

• Additionally, percentage of positive S&P 500 stocks (@76.9%) is higher than all other weeks (@58.1%).

• Since 2010, there was a slightly higher standard deviation than the market.

• Conclusion: Using a shorter time (factor), the week after Thanksgiving has been especially bullish in the recent 13 years.

Black Friday (BF) Week - as S&P 500 Performance Indicator?

Next, writer Rocky wanted to find out if he could learn from Black Friday reports about the US stock market and might give him clues about where stocks are heading.

Above table shows how the S&P 500 composite index performed over the next three months, depending on how the S&P 500 index fare the week after BF.

• Data compiled was since 1990.

• When S&P 500 gained 1% or more the week after Black Friday, the next 3 months averaged a return of +3.9% with 77% of the returns positive.

• When S&P 500 lost -1% or more the week after Black Friday, the next 3 months averaged a return of -4.1% with 33% of the returns positive.

• The hypothesis and experiment prove to be an excellent indicator at forecasting the index next three months performances.

Lastly, writer Rocky attempted to use a shorter timeframe of data (again from 2010 to 2023) to determine if the outcome could be more “accurate”.

• Data compiled was from 2010 to 2022.

• Unfortunately, the indicator fails when sampling time frame is shortened to 13 years.

• Above table shows the results for just the rest of the year.

• Historically, the last few weeks of the year were bullish — and (a) the average returns were positive and (b) a high percent positive in any circumstance.

• In all likelihood, this might be due to other factors (at work during last few weeks of the year).

• For example, (1) Tax reasons, (2) End-of-year portfolio adjusting, etc...

• The “BF Week as Indicator” can play out after that.

Investible US stocks for next week?

Writer Rocky has a list of S&P 500 “recommended” stocks — retailers and other, that are relevant for the holiday-shopping season.

The table summarizes how the stocks performed in the week after Black Friday over the past 10 years.

• $Nike(NKE)$ and $HP Inc(HPQ)$, top the list, being positive 8 of the past 10 years.

• $Amazon.com(AMZN)$ is at the bottom, averaging a loss of -1% during the week, with just positive returns over the last 10 years.

My Viewpoints:

• I am intrigued by the above observations and backtestings.

• I will certainly be paying attention to Fri, 24 Nov 2023 (half day) trading and S&P 500 index’s following week performance as well; noting the qualifiers at the same time.

• As for the list of “recommended” stocks, I am uncertain about HP Inc (HPQ) as being a top performer.

• Isn’t this the stock that Mr Warren Buffett has just offloaded recently, as revealed in $Berkshire Hathaway(BRK.B)$ Q3 2023’s 13F filing?

• Do you think there is “link” between S&P 500 index performance and its performance following BF week?

• Do you think the list of “best” performing US stocks are worth a look ?

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