November 20th, 2008

"Perpetual, In the Money Calls", A Follow-up

It’s good to know that some respected people are reading this blog (I assume that only through inference, of course, and not first-hand knowledge). For example, I wrote in “Perpetual, In-the-Money Call Options” on November 15, about the degree to which stocks have fallen as evidenced by the number of stocks under $10.

The following day, I saw an article in the NY Times on the same topic and four days later on November 19, the Bespoke Investment Group wrote in their blog

“There are currently just 19 stocks in the Russell 3,000 that have a share price over $100. Conversely, there are a whopping 1,228 (42%!) stocks in the index with a share price under $10. We went back and checked how these numbers looked at prior market peaks and troughs over the last decade. As shown below, at the market’s all-time highs on October 9th, 2007, there were 82 stocks in the Russell 3,000 trading above $100/share and just 338 trading below $10/share. At the market’s 2002 lows, there were only 11 stocks trading above $100/share, which is well below the current 19, but there were significantly less stocks trading below $10/share.”

Exactly the same conclusion I arrived to.

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