Turnaround Investing Blog

George Putnam, one of the country's leading turnaround and distressed investing professionals, shares his timely insight on the economy and turnaround investing opportunities.

A 100-Point Move in the Dow Jones--It’s Not What It Used To Be

Ever notice your pulse racing when you hear that the Dow Jones Industrial Average has moved 100 points? It seems like something important, something big, is happening in the market, especially if the move is down. That was once true: A generation ago, when the current 35-year bull market began, the Dow Jones was around 2200. So a 100-point change indicated the market moved over 4.5%. That was a big move.

Even more recently, in 2010, with the Dow trading at about 10000, a 100-point move meant the market jumped (or fell) 1%. Not quite the jolt it was in 1982, but still worth noticing. Today, however, with the Dow Jones Industrial Average at 22300 (over 10-times its level a generation ago), a 100-point move is mostly noise, indicating only a 0.45% change. To help bring this into perspective: in 1987, the stock market crashed by 22.6% when it fell 508 points in a single day. Today, a 508-point move would be about 2.3%—a sizeable move, certainly, but hardly what anyone would call a crash.

With the stock market’s volatility at record lows, it’s easy to forget how common a 100-point move actually is. This year, the Dow Jones has had over 30 days with 100-point moves. And that is among the fewest in five years, even with the declining impact as the market continues its upward climb. So when you hear the media get excited about a 100-point move in the Dow, remember what this really means—that the media is trying to get your attention, not necessarily that anything important is going on in the market.

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Is there value in bankrupt PG&E’s stock?

In nearly every case, the shares of a company in bankruptcy become worthless. In very rare cases, however, they can become great investments. W.R. Grace (NYSE:GRA) shares produced a 75-fold return, as an example. With California utility PG&E (NYSE:PCG) now in bankruptcy, the range of possible outcomes for its equity is wide.

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EV/EBITDA: What Is It & Why Are We Using It More?

In reading recent editions of The Turnaround Letter, you have probably noticed that we are increasingly using EV/EBITDA as a valuation measure, rather than the better-known price/earnings multiple.  We thought it might be useful to describe this measure and why we like it.

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Turnaround Letter Stock Pick Named Top Performer of 2017


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What Last Year's Top Stock Pickers Are Buying in 2018


This Forbes write-up follows up on the recent Top Stock Tips report--naming The Turnaround Letter's Crocs recommendation the top performer of 2017: With 90% gains, CROX beat out 100 other investment ideas included in the report; and the stock continues to have value investing appeal, according to Putnam.


George notes, "We see additional upside for the stock in 2018 as management's efforts continue to bear fruit, though the gains will likely be more muted than we saw in 2017."