The S&P 500's rise to an all-time interestingly has been done on nickels and dimes rather than big single-day jumps. Indeed, the last time the index has risen at least 1% in a single day was Oct. 11, 26 trading days ago. It's up slightly more than 5% since then. With the fourth quarter half over, volatility as defined by days where the S&P 500 has risen or fallen more than 1% has been all but absent.
There have been just five volatile days this quarter out of 34 total trading days and all of them occurred between Oct. 1 and Oct. 11. Last year's fourth quarter may be a distant memory for many, but during 63 trading days there were 28 "volatile" days and the index fell 14%. A calmer entry into 2020 would be welcomed, but I am not yet convinced. I should have learned by now that the market has a will of its own. Sometimes it's simply a "George Costanza world" where up is down and down is up and you just have to enjoy the ride, but make sure you are buckled up.
Last week I revisited a name from the past, specialty retailer Fossil Group (FOSL) , which is again down in the dumps but seemingly cheaper than when I first took a position in early 2018. While not in a hurry to fully re-engage, I did take an opening position, when shares dipped below $8 midweek.
Here's an interesting comparison on my first go-around with Fossil and the latest: When I bought it the first time in 2018, the enterprise value (EV) was $730 million; it now stands at $516 million. While debt has fallen since then (from $485 million to $264 million), if you assumed it was the same now as then in order to get the equivalent enterprise value, shares now would need to trade in the mid-$3 range. In other words, in terms of EV, the debt has fallen dramatically but the stock price has not kept up.
Finally, the "Heller curse" is alive and well, and it's something I've gotten used to: Sometimes when I take an opening position in a down-and-out name, it tanks almost immediately, which is why I typically spread out my purchases. That comes with the territory of buying distressed names.
The latest example is Argentine farming and real estate giant Cresud (CRESY) , which is down about 19% since I began rebuilding my position a couple weeks back. But it's just the beginning, and there's likely more volatility ahead. That's what you get for taking exposure to Argentina.