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The Last Shall Be First, and the First Shall Be Last

No matter how you look at it, the month of January was a month where most of last year's losers played catch up and most of last year's winner dropped back with the pack.  The first chart below shows the performance of the S&P 500 (red dot) and each of the ten sectors in 2011 versus their performance in January.  As shown, the three sectors that were down in 2011 (Financials, Materials, and Industrials) rank in the top three in terms of performance so far this year, while the two best performing sectors last year (Utilities and Consumer Staples) are two of only three sectors down so far this year.

Looking at the performance of the 24 major groups in the same way shows a similar pattern i.e., the losers are now winning while the winners are losing.

Even on an individual stock level, the relationship is similar.  In general, stocks that were down the most last year are up the most so far this year, and vice versa.  It's still early in the year, but so far in terms of performance, the shoe is literally on the other foot!

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