of S&P 500 has been in a bear market since June 13th. That is why it is important to know a few things about bear markets. There have been 22 of them since 1928 (as measured by the S&P 500 Index). These bear markets range from a 20.6% drop (just barely hitting the bear market threshold of 20%) to 83% at the low point of the Great Depression of 1930. A wise investor knows that all bear markets ended in the same outcome: a recovery. Larry.
Some bear markets have succumbed to spectacular bull market moves. For example, the 1949 bear market reached its lowest level on June 13th. The ensuing bull market lasted for 9,146 days (over 7 years) and peaked at 267%. When the Great Recession bottomed out on March 9, 2009, the bull market produced a 400% rally and lasted 1,997 days (almost five and a half years) before reaching its peak.
Perhaps most surprisingly, the bear market triggered by Black Monday bottomed out on December 4, 1987.
It can be daunting to watch a portfolio deplete from a bear market, allowing your hard-earned dollars to crash even more to buy more crashed stocks. But shrewd investors see the bear market as an opportunity to get ahead of an economic recovery. Warren, one of his most wise investors, his Buffett famously said, “When it’s raining money, don’t bring your thimble. Bring your bucket.” .
In other words, the bear market is a gift that gives investors the opportunity to buy growth stocks at appetizing prices. Doing so can lead to tremendous long-term results. Let’s take a look at the three crashed stocks that could lead the market recovery.
Customers love Costco
if you are one costco wholesaleof (price -1.40%) You’ve seen the long lines at Costco’s wholesale warehouse with 111.6 million cardholders. The store is incredibly popular. Customers get a 30-roll tower of toilet paper, a 36-can case of Coca-Cola, or a 35-ounce tub of cheese balls, all at the lowest price. I’ve only been to Costco for $10 family size pizzas. they are delicious
Costco customers pay an annual fee for access to organic produce, fresh meats, and cleaning products. Customers can also fill prescriptions and change tires at pharmacies. Costco probably sells it at a discounted price.
In the decade since 2011, Costco has built 223 large warehouses, bringing the total to 815 by the end of 2021. Meanwhile, the company has steadily added his 47.6 million paying cardholders. As a result, earnings per share increased consistently.
The company is on pace to open 28 more new warehouses in 2022 and will continue to expand its global footprint for the foreseeable future. Still, the stock is down 20% from its 52-week high. Investors can buy the stock at a price-to-earnings ratio (P/E) of 36.8. This is close to the most attractive point in this bear market.
Intuit is building a personal finance empire
readers can recognize intuition (Into -2.39%) From Turbotax, a widely used online tax filing platform. The service works with Quickbooks, the ubiquitous small business accounting software. The company boasts an incredible market share, being one of the first to move in these two categories. TurboTax controls 92.8% of the market and QuickBooks controls 81.9% of the market.
Intuit acquired Credit Karma in December 2020 and Mailchimp in November 2021. Credit Karma sells credit cards, personal loans and insurance, and Mailchimp provides email contacts and sales solutions for small businesses. Over the next few years, Intuit plans to upsell two complementary services to a growing list of small business customers.
Amid this year’s bear market, Intuit reported adjusted earnings per share increased 22% to $11.85 for its fiscal year ended July 31. The company expects continued growth next year, but the stock is down 43% from its 52-week high. Intuit’s stock trades at a respectable 56 times multiples, but is down significantly from its November high of 90 times.
InMode makes plastic surgery easy
in modeof (INMD 1.50%) The rapidly growing minimal and non-invasive radio frequency (RF) technology is replacing painful liposuction, wrinkle reduction, and body contouring. The company’s devices take the strain off patients, leading to faster results and quicker recovery.
Physicians around the world quickly joined InMode’s products because they are faster than plastic surgery. This means you can see more patients and make more money. In a world where the word “selfie” is translated into every language, body aesthetics have become a necessity. InMode’s devices offer safer, faster results for patients who want to look their best without surgery.
The company’s revenue increased from $23.1 million in 2016 to $357.6 million in 2021, and the stock price followed suit. The company made his IPO at $14 in August 2019, up 609% to his $99.27 high in recent 52 weeks.
The bear market has slashed the stock 71% from its highs, but the company expects adjusted earnings per share of $2.11 to $2.16 this year. This means that the expected price/earnings ratio is only 12. This is significantly better than the five-year average of 26.
buy now or wait?
You never know when today’s bear market will give way to a bull market. But the stock market is always positive. So the risk of waiting for good macroeconomic news is that the market may have already recovered. Buying stocks of great companies at depressed prices is the secret to market-beating returns. It’s better than missing an opportunity like this and regretting it, even if it means the bear market will last for a while.