Best-performing S&P 500 stocks from the bottom of the 2008 market crash – The Average Joe

    Best-performing S&P 500 stocks from the bottom of the 2008 market crash

    Victor Lei — Head of Research

    December 12, 2022

    December 12, 2022

    2008 and 2022 have had many similarities: Stock market crash, housing downturn, high levels of debt and investor portfolios going bust.

    But there are also many differences: ‘08 was led by a housing bubble — while today’s crash is primarily from a reversal in monetary policies.

    Inflation was also healthy in 2008, and the Fed had already raised rates for several years.

    Still, investors keep comparing the two market crashes:

    The white line represents the S&P 500 in 2022. If 2022/2023 follows 2008 — we may be in for another significant move down.

    That’s a big “if.” And all speculation.

    One of the biggest questions is whether markets have bottomed or not — and no one really knows the answer.

    But if you purchased anywhere near the bottom in past market crashes — you would have done fairly well in the proceeding years.

    Just ask investors in these companies — which had massive returns from the 2009 bottom.

    Some takeaways:

    • Three S&P 500 companies turned out to be 100 baggers in this period.
    • Six of these stocks had less than $500M in market cap at their bottoms.
    • The largest were Apple (~$76B market cap), Nvidia (~$4B) and Netflix (~$2B).

    It’s rare for a company of Apple’s size in 2009 to deliver such large returns. Stocks with the highest upside are typically found to be stocks with smaller market capitalizations — but they also tend to be the riskier.

    Still, small-cap companies tend to benefit more when the economy recovers — making it an attractive hunting ground.

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