Waiting for the bear market rally

[Bigbusiness]

I had a look at the best performers in the FTSE 100 during the last bear market rally (10/10/02 to 2/12/02). Now all I have to do is work out the best performers for the next bear market rally!

<TABLE BORDER="1"><TBODY><TR><TD WIDTH="40">No.</TD><TD WIDTH="286">Name</TD><TD WIDTH="255">Price% between 10/10/02 and 2/12/02</TD></TR><TR><TD WIDTH="40">1</TD><TD WIDTH="286">AMVESCAP PLC</TD><TD WIDTH="255">88</TD></TR><TR><TD WIDTH="40">2</TD><TD WIDTH="286">British Airways PLC</TD><TD WIDTH="255">72.9</TD></TR><TR><TD WIDTH="40">3</TD><TD WIDTH="286">Royal & Sun Alliance Insurance Group PLC</TD><TD WIDTH="255">63.7</TD></TR><TR><TD WIDTH="40">4</TD><TD WIDTH="286">Sage Group (The) PLC</TD><TD WIDTH="255">52.3</TD></TR><TR><TD WIDTH="40">5</TD><TD WIDTH="286">3i Group PLC</TD><TD WIDTH="255">45.7</TD></TR><TR><TD WIDTH="40">6</TD><TD WIDTH="286">Prudential PLC</TD><TD WIDTH="255">41.3</TD></TR><TR><TD WIDTH="40">7</TD><TD WIDTH="286">Granada PLC</TD><TD WIDTH="255">41</TD></TR><TR><TD WIDTH="40">8</TD><TD WIDTH="286">Rolls-Royce PLC</TD><TD WIDTH="255">37</TD></TR><TR><TD WIDTH="40">9</TD><TD WIDTH="286">Friends Provident PLC</TD><TD WIDTH="255">37</TD></TR><TR><TD WIDTH="40">10</TD><TD WIDTH="286">British Sky Broadcasting Group PLC</TD><TD WIDTH="255">36.7</TD></TR><TR><TD WIDTH="40">11</TD><TD WIDTH="286">WPP Group PLC</TD><TD WIDTH="255">36.6</TD></TR><TR><TD WIDTH="40">12</TD><TD WIDTH="286">Aviva PLC</TD><TD WIDTH="255">35.2</TD></TR><TR><TD WIDTH="40">13</TD><TD WIDTH="286">Vodafone Group PLC</TD><TD WIDTH="255">34.1</TD></TR><TR><TD WIDTH="40">14</TD><TD WIDTH="286">Capita Group (The) PLC</TD><TD WIDTH="255">33.3</TD></TR><TR><TD WIDTH="40">15</TD><TD WIDTH="286">Daily Mail and General Trust PLC</TD><TD WIDTH="255">32.3</TD></TR><TR><TD WIDTH="40">16</TD><TD WIDTH="286">Invensys PLC</TD><TD WIDTH="255">29.9</TD></TR><TR><TD WIDTH="40">17</TD><TD WIDTH="286">Hilton Group PLC</TD><TD WIDTH="255">29.6</TD></TR><TR><TD WIDTH="40">18</TD><TD WIDTH="286">Schroders PLC</TD><TD WIDTH="255">28.3
</TD></TR><TR><TD WIDTH="40">19</TD><TD WIDTH="286">Pearson PLC</TD><TD WIDTH="255">27.5</TD></TR><TR><TD WIDTH="40">20</TD><TD WIDTH="286">Rio Tinto PLC</TD><TD WIDTH="255">26.1</TD></TR><TR><TD WIDTH="40">21</TD><TD WIDTH="286">Reuters Group PLC</TD><TD WIDTH="255">25.3</TD></TR><TR><TD WIDTH="40">22</TD><TD WIDTH="286">Royal Bank of Scotland Group (The) PLC</TD><TD WIDTH="255">25</TD></TR><TR><TD WIDTH="40">23</TD><TD WIDTH="286">EMAP PLC</TD><TD WIDTH="255">24</TD></TR><TR><TD WIDTH="40">24</TD><TD WIDTH="286">BT Group PLC</TD><TD WIDTH="255">23.9</TD></TR><TR><TD WIDTH="40">25</TD><TD WIDTH="286">Imperial Chemical Industries PLC</TD><TD WIDTH="255">23.8</TD></TR><TR><TD WIDTH="40">26</TD><TD WIDTH="286">Old Mutual PLC</TD><TD WIDTH="255">23.2</TD></TR><TR><TD WIDTH="40">27</TD><TD WIDTH="286">Exel PLC</TD><TD WIDTH="255">22.9</TD></TR><TR><TD WIDTH="40">28</TD><TD WIDTH="286">Standard Chartered PLC</TD><TD WIDTH="255">22.8</TD></TR><TR><TD WIDTH="40">29</TD><TD WIDTH="286">Compass Group PLC</TD><TD WIDTH="255">2.5</TD></TR><TR><TD WIDTH="40">30</TD><TD WIDTH="286">AstraZeneca PLC</TD><TD WIDTH="255">21.5</TD></TR></TBODY></TABLE>

 

[FTSE Beater]

Hi Big Business

Lovely table

My personal choice would be AVZ out of that lot. Not just because it is top of the table, but mainly because it tracks the FTSE 100 really well, just a bit more exaggerated.

All IMVHO

 

[Miki]

Why are you waiting for a rally?

Why not shorting worst performers in a bear market?

 

[Bigbusiness]

I do short some shares in the bear market but would prefer to buy the best performers in a bear market rally.

 

[Fluke]

I also wonder if the market has fallen far enough to start looking for an up move. I am trading on EOD chrts and wonder if the market has it gone too low to risk shorts at the moment?.

I was starting to look for shares to go long with, in the event of a market rally.

One thing I keep an eye on is the FTSE. P/E ratio and understand
the very long term fair value is about 14 .
this has been up to a P/E of 28 at the end of the tech boom.

To day the FTSE reached a level that produced a P/E of approx 14. 3.
Would be interested to see any other views on this .Is it worth looking for a rally.

 

[oatman]

Fluke,

Be careful, there's no such thing as "too low"........
A rally is something else.

Good luck,

 

[RogerM]

Fluke - 14 is the long term average for the ftse all-share index. But averages, by their very nature, mean that if the p/e has spent a long time above the average, then some of the time the p/e has to be below the average, or else the average would be higher. At the end of the 1973/74 bear market the ftse all-share was trading at a p/e of 4, and the S&P500 at a p/e of 8.

If we see the same figs at the end of this bear market, and assuming that there is no reduction in earnings, the ftse needs to drop by a further 66% - or to about 1100.

 

[Fluke]

Roger M

Thanks for your detailed reply,and the way you set it out .I do agree with your analysis of the fundermaentals.
I wanted to see what other traders thought of the current situation with the FTSE stocks and to get some idea which way to play the market.I know its not easy but some times two heads are better than one.I was getting a little impatient Im afraid and wondered if its time for the market to go up.It went up today smartly,wonder if it will contiue.

Regards Fluke.

 

[Bigbusiness]

Thought it would be interesting to see how the table looks after the recent rally. Shame I didn't buy a few of them!

Sorry about this, but the table is below. Don't know why there is a big gap!

<CENTER>
<TABLE BORDER="1" WIDTH="90%">
<TBODY>
<TR>
<TD WIDTH="10%">No.<BR></TD>
<TD WIDTH="60%">Name<BR></TD>
<TD WIDTH="30%">Price% between <BR>13/3/03 and 7/5/03</TD>
</TR>
<TR>
<TD WIDTH="10%">1</TD>
<TD WIDTH="60%">Royal & Sun Alliance Insurance Group PLC</TD>
<TD WIDTH="30%">102.9</TD>
</TR>
<TR>
<TD WIDTH="10%">2</TD>
<TD WIDTH="60%">Invensys PLC</TD>
<TD WIDTH="30%">60</TD>
</TR>
<TR>
<TD WIDTH="10%">3</TD>
<TD WIDTH="60%">British Airways PLC</TD>
<TD WIDTH="30%">54.4</TD>
</TR>
<TR>
<TD WIDTH="10%">4</TD>
<TD WIDTH="60%">Rolls-Royce PLC</TD>
<TD WIDTH="30%">51.1</TD>
</TR>
<TR>
<TD WIDTH="10%">5</TD>
<TD WIDTH="60%">Friends Provident PLC</TD>
<TD WIDTH="30%">50.2</TD>
</TR>
<TR>
<TD WIDTH="10%">6</TD>
<TD WIDTH="60%">Reuters Group PLC</TD>
<TD WIDTH="30%">43.5</TD>
</TR>
<TR>
<TD WIDTH="10%">7</TD>
<TD WIDTH="60%">WPP Group PLC</TD>
<TD WIDTH="30%">40.9</TD>
</TR>
<TR>
<TD WIDTH="10%">8</TD>
<TD WIDTH="60%">Schroders PLC</TD>
<TD WIDTH="30%">40.7</TD>
</TR>
<TR>
<TD WIDTH="10%">9</TD>
<TD WIDTH="60%">Granada PLC</TD>
<TD WIDTH="30%">39.2</TD>
</TR>
<TR>
<TD WIDTH="10%">10</TD>
<TD WIDTH="60%">AMVESCAP PLC</TD>
<TD WIDTH="30%">36.1</TD>
</TR>
<TR>
<TD WIDTH="10%">11</TD>
<TD WIDTH="60%">Daily Mail and General Trust PLC</TD>
<TD WIDTH="30%">34.6</TD>
</TR>
<TR>
<TD WIDTH="10%">12</TD>
<TD WIDTH="60%">AstraZeneca PLC</TD>
<TD WIDTH="30%">31.2</TD>
</TR>
<TR>
<TD WIDTH="10%">13</TD>
<TD WIDTH="60%">Prudential PLC</TD>
<TD WIDTH="30%">27.1</TD>
</TR>
<TR>
<TD WIDTH="10%">14</TD>
<TD WIDTH="60%">Hilton Group PLC</TD>
<TD WIDTH="30%">22.9</TD>
</TR>
<TR>
<TD WIDTH="10%">15</TD>
<TD WIDTH="60%">Royal Bank of Scotland Group (The) PLC</TD>
<TD WIDTH="30%">22.7</TD>
</TR>
<TR>
<TD WIDTH="10%">16</TD>
<TD WIDTH="60%">Aviva PLC</TD>
<TD WIDTH="30%">21.5</TD>
</TR>
<TR>
<TD WIDTH="10%">17</TD>
<TD WIDTH="60%">Compass Group PLC</TD>
<TD WIDTH="30%">20.9</TD>
</TR>
<TR>
<TD WIDTH="10%">18</TD>
<TD WIDTH="60%">Old Mutual PLC</TD>
<TD WIDTH="30%">20.5</TD>
</TR>
<TR>
<TD WIDTH="10%">19</TD>
<TD WIDTH="60%">Exel PLC</TD>
<TD WIDTH="30%">19.6</TD>
</TR>
<TR>
<TD WIDTH="10%">20</TD>
<TD WIDTH="60%">EMAP PLC</TD>
<TD WIDTH="30%">18.4</TD>
</TR>
<TR>
<TD WIDTH="10%">21</TD>
<TD WIDTH="60%">Pearson PLC</TD>
<TD WIDTH="30%">18</TD>
</TR>
<TR>
<TD WIDTH="10%">22</TD>
<TD WIDTH="60%">BT Group PLC</TD>
<TD WIDTH="30%">17.7</TD>
</TR>
<TR>
<TD WIDTH="10%">23</TD>
<TD WIDTH="60%">British Sky Broadcasting Group PLC</TD>
<TD WIDTH="30%">17.2</TD>
</TR>
<TR>
<TD WIDTH="10%">24</TD>
<TD WIDTH="60%">Sage Group (The) PLC</TD>
<TD WIDTH="30%">13.1</TD>
</TR>
<TR>
<TD WIDTH="10%">25</TD>
<TD WIDTH="60%">Capita Group (The) PLC</TD>
<TD WIDTH="30%">13.1</TD>
</TR>
<TR>
<TD WIDTH="10%">26</TD>
<TD WIDTH="60%">3i Group PLC</TD>
<TD WIDTH="30%">11.3</TD>
</TR>
<TR>
<TD WIDTH="10%">27</TD>
<TD WIDTH="60%">Vodafone Group PLC</TD>
<TD WIDTH="30%">10.8</TD>
</TR>
<TR>
<TD WIDTH="10%">28</TD>
<TD WIDTH="60%">Standard Chartered PLC</TD>
<TD WIDTH="30%">8.2</TD>
</TR>
<TR>
<TD WIDTH="10%">29</TD>
<TD WIDTH="60%">Imperial Chemical Industries PLC</TD>
<TD WIDTH="30%">-1.9</TD>
</TR>
<TR>
<TD WIDTH="10%">30</TD>
<TD WIDTH="60%">Rio Tinto PLC</TD>
<TD WIDTH="30%">-3</TD>
</TR>
</TBODY>
</TABLE></CENTER>