Historical Drawdowns of 15% or more in the S&P 500 Index Since 1928: Chart

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The S&P 500 is down just over 16% so far this year as of Nov 25th. The index was down much more earlier in the ongoing bear market. From June thru mid-August stocks recovered only to plunge again. So wise investors are cautiously waiting if the current rise from October will stand. Many market participants consider it as another bear market rally. Should the Fed continue to raise interest rates further at a strong clip each time, the economy could enter a recession early next year. Of course that would not be good for stocks. It is anybody’s guess on how much equities could fall in a recession.

Drawdowns of 15% or more in the S&P 500 have occurred many times in the past. Some of these declines were severe. The last major drawdown occurred during the Global Financial Crisis(GFC) of 2006-08. The following chart shows the historical drawdowns in the S&P 500 since 1928:

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Source: Contrarian Investing During a Sell-Off: An Update, T. Rowe Price, September 2022 via Investment Office

Related ETF:

  • SPDR S&P 500 ETF (SPY)

Disclosure: No positions

The Top 50 Global Mining Companies 2022

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Global equity markets have been volatile this year with most being mostly down. In the commodity markets, its been a similar story with some shining while others falling year-to-date. For example, energy- related commodities such as crude oil, natural gas and coal have been big winners. Even Uranium had one of the best years. The Russian invasion of Ukraine lit a fire under fertilizer ingredient potash leading to a 14-year peak. Growing adoption of EV vehicles by consumers have led to soaring demand for Lithium which is used in making the batteries. By October, Lithium prices have doubled this year. Gold prices have been stagnant to down though it is considered as a safe haven asset during adverse market conditions for equities. Gold prices started the year at over $1,805 per ounce and closed at $1,751 recently.

With that brief intro, let’s take a quick look at the Top 50 biggest mining companies in the world according to a report by Mining.com:

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*NOTES:

Source: MINING.COM, Miningintelligence, Morningstar, GoogleFinance, company reports. Trading data from primary-listed exchange at September 30, 2022 where applicable, currency cross-rates October 3, 2022. 

Percentage change based on US$ market cap difference, not share price change in local currency.

Market capitalization calculated at primary exchange from total shares outstanding, not only free-floating shares.

Source: The top 50 biggest mining companies in the world, Mining.com

The biggest mining company world based on market cap at the end of Q3, 2022 is BHP Group (BHP) of Australia. The ADR trading on the NYSE is up by 11% YTD. Rio Tinto (RIO) is the second biggest firm and its ADR is down by 1% so far this year.

A few other observations from the report:

  • Vanvouver, Canada- based Teck Resources Ltd (TECK) has benefitted from its exposure to Canadian oil sands and coal.
  • Coal companies like  Shaanxi Coal, Yanzhou Coal and India’s Coal India have had a great run this year.
  • Lithium producer Sociedad Quimica y Minera de Chile (SQM) has shot up over 82% YTD due to a 10-fold increase in profits and US-based Albemarle Corporation (ALB) has also increased by 15% YTD.
  • Other notable firms in the above list include Vale(VALE) of Brazil, Nutrien Ltd (NTR) of Canada, Southern Copper Corp(SCCO), Mosaic Co (MOS),  Cameco Corp (CCJ) and Cleveland-Cliffs Inc (CLF).

Disclosure: No positions

30 Years of the FTSE 250: Infographic

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The FTSE 250 Index is the mid-cap index of the UK stock market. The index is a better representation of the British economy than the widely popular FTSE 100 which is more global-oriented. The FTSE 250 index was created 30 years ago in 1992. The following infographic shows some of the major milestones of the index:

Click the image below to go to the infographic page

Link for the Infographic:

30 YEARS of the FTSE 250

Source: FTSERussell

European Countries Continue Trading with Russia Despite Sanctions: Chart

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Russia’s trade with China and India are soaring to record levels this year. The import of Russian oil, gas and coal by these countries has increased dramatically following the Russian invasion of Ukraine and Russia offering cheaper prices. This is not a surprising news since both these countries are developing countries and have historically maintained friendly relations with Russia.

The biggest news that may shock many is that European countries continue to trade with Russia despite imposing sanctions against it as a punishment for its invasion of Ukraine. This is because unlike the US, Europe is heavily dependent on Russian energy imports and hence is increasingly difficult to totally avoid Russian energy imports until alternative viable options are found. According to an investigation by one British newspaper, the UK allowed import of Russian oil from 39 carriers during the sanctions. Other major economies of Europe including Germany, France, Italy and Spain have continued to import Russian energy thereby fueling the Russia’s coffers and helping prolong its war over Ukraine. So on the one hand these countries support Ukraine by sending weapons and funds to fight Russia. But their other hand indirectly feeds Russia by buying its oil and gas. It is like trying to profit from both sides in a war with the poor Ukrainians suffering the consequences.

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Source: What Countries Trade With Russia Despite Imposing Sanctions?, Sputnik

The U.S. Has a Doctor Deficit

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The U.S. has a physician deficit that adversely affects healthcare in the country. In the OECD ranking of doctors per 10,000 the US ranks at the bottom. Only Mexico and South Korea are worse than the US. All European countries including the ones in Eastern Europe have higher doctor density. The simple fact that the US ranks just better than Mexico in this regard shows priorities are off-track in this country.

The following chart shows the physicians per 10,000 people by type:

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Source: The U.S. Has Much to Gain from More Doctors, ROBERT ORR, Niskanen Center

According to the above report by Robert Orr, increasing the supply of of doctors would improve health care. From the report:

Increasing the number of physicians would improve American health care

Restricting physician supply appears not only to have failed in terms of controlling costs, but likely also delivered a health care system that’s comparatively worse at ensuring the health of U.S. citizens. This is because more basic medical services are generally recognized to have a far greater impact on population health than specialized ones. And those high-impact, basic medical services are what become scarce as a result of supply restrictions.

The density of physicians has been routinely found to be associated with better health outcomes. The density of primary care physicians is associated with lower mortality. Similarly, the density of specialists has often been found to be associated with reductions in mortality from specific diseases. For example, death rates from melanoma decrease with an increase in the density of dermatologists. Patients seem to like being in places with a greater availability of physicians, too. Density has been found to be positively associated with a variety of patient-reported outcomes, such as physical and mental health status. 

Recently I came across another chart that showed the number of psychologists per capita is also lower in the US than other countries like Argentina, Netherlands and Costa Rica. Sometimes one has to wonder if mass shootings in the country such as the recent ones in Virginia and Colorado could have been avoided if there are enough mental health professionals:

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Source: Latinometrics by Ernesto Canales and Mario Canales, Substack