Time to buy stocks again

The racing season in England has come to an end and, as the saying goes, it’s time to buy stocks again. A look at the best midseason stocks since 2004 with some interesting insights.

“Logician” with jockey Frankie Dettori - here with his victory in York in August - was probably the logical winner of the St. Leger Stakes in Doncaster as well.

Und again is September. Once again, the racing season for three-year-old thoroughbred horses in Great Britain has come to an end. A very important date for the stock market, because now it is time to buy shares again – until next May. “Sell in May and go away / come back on St. Leger’s day” is the motto.

Historically, the wealthy British elite of the 19th and early 20th centuries left London and the stock exchange during the racing season. This traditionally begins at the beginning of May with the “2000 Guineas” race in Newmarket near Cambridge. The season closes with the St Leger Stakes in Doncaster, which this time took place on September 14th.

For several years now, FAZ.NET has been monitoring the development of share prices between St. Leger’s Day and the 2000 Guineas. And in the process, some stocks emerged that have always been among the winners in recent years.

This year shows how good the last ten years on the stock market really have been. Because in this year’s inventory, the period between September 2008 and May 2009 has dropped out, in which the American S&P 500 index fell by more than a quarter. As a result, the number of stocks that had consistently positive returns between St. Legers and 2000 Guineas has exploded from 42 to 210.

The last midseason on the stock market was not all that profitable – just think of the sharp decline in prices at the end of 2018 and May and August 2019 were not the best time for stocks either. This can be seen in the proportion of winning shares, which has fallen for the second time in a row, to 39 percent, the lowest level since 2013/2014. But everything within the framework: Before 2009, the proportions were significantly lower.

After such a good decade-long balance sheet, it is not surprising that the list of long-running hits, who have been able to hold out the revenue feat since September 2004 and thus for 15 years, has remained unchanged. However, these stocks show how applicable another stock market rule is, namely “back and forth empties your pockets”. Anyone who had simply kept the shares instead of selling in May and re-entering in September would have done better in most cases. On an annual average, the shares generated a return of around 12 percent for the Italian energy supplier Terna and almost 32 percent for the shares of the American Booking Holdings, formerly known as Priceline and providers of online travel agents such as Booking.com or Kayak. If you had invested 1,000 euros in each of the eight stocks in 2004, you would now be more than 200,000 euros richer.

One shows the little “St. Legers portfolio ”. These are stocks that are doing extraordinarily well. The portfolio would have grown 27-fold between September 2004 and May 2018. The Dax only brought it to little more than three times. But from behind you are always smarter.

There were also high chances of increasing stock market profits in horse races for the British upper class at the St. Leger Stakes last Saturday. Anyone who bet on a victory by the outsider “Dashing Willoughby” could have won up to 26 times their stake, depending on the bookmaker. Could have, because the gallop was penultimate, six lengths behind. In the end, the favorite “Logician” clearly prevailed with a two-and-a-quarter length lead. But there was still a gain of 83 percent. So the favorite won for the third year in a row. But you shouldn’t bet on it – or you should.