There was zero correlation between return rankings in 2013 and in 2012 for stocks in the resources sector
There was zero correlation between return rankings in 2013 and in 2012 for stocks in the resources sector. Once a stock had been given a one off re-rating, typically over a few weeks, there was little carry through momentum. Of the 100 best performing stocks in 2012, only nine were ranked in the top 100 in 2013 and the average ranking in the second year was 499 (out of approximately one thousand stocks in the sector). Similarly, of the 100 stocks surrounding the median return in 2012, 10 were ranked in the top 100 in 2013 and the average ranking was 505. Of the 100 weakest performing stocks in 2012, 20 appeared in the top 100 in 2013 but the average ranking in the next year was 491. Whatever the 2012 outcome, the subsequent performance tended to revert to the sector median result.
John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...
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