Once again, despite the stock market’s strong performance in 2023 and a decent-enough start to the new year, our inbox is continually bombarded by doomsayers calling for a market crash.

It gets a little tiring. We don’t know what’s going to happen in the market and neither do they. But bad news gets more attention, and opening a so-called research report calling for an imminent 40 per cent market crash certainly can make investors sit up and spit out their morning coffee.

So, with us being all optimistic at the start of a new year, we thought we would pull out our history books and highlight just how amazing the stock market can be at times. It truly is the best wealth creator in the world. One only has to look at a list of the richest people in the world. Most (admittedly, not all) got on that list by owning stock — typically a high concentration of stock — in the companies they founded. To all the doomsayers of the world, what do you have to say about these five points?

How about a one-day stock market return of 14.1%?

We are not talking about a single company here, but about an entire market moving up 14 per cent in a single trading day. Sounds like a fever dream of an investor on margin, but it can happen. Indeed, it happened on Jan. 3, 2001, after the United States Federal Reserve surprisingly cut interest rates to fend off a recession. Tech stocks soared like they never had before. I was a (younger) portfolio manager at the time. It was a very fun day.

Sure, the best market days come during troubled times, and the top 10 Nasdaq moves (all more than 7.8 per cent single-day moves) were all during the COVID-19 pandemic or in recessionary times. But you have to own stocks to get those moves.

We can hear you say, “But that’s the Nasdaq market where stocks are always extra volatile. What about the Dow Jones industrial average?” Well, in March 1933, it rose 15.3 per cent in a single day. That was in the middle of the Great Depression, but it is still the largest upward move on record.

How about seeing your stocks go up 12 months in a row?

For this juicy tidbit, we went back nearly 100 years, to 1927, using S&P 500 monthly data. Between 1935 and 1936, the market went up 12 months in a row. Unfortunately, the streak started in April 1935, and we have no reported instances where the market rose every single month within a single calendar year. In 1953 and 1950, the market went up 11 months in a row. The market rose every month in these instances, despite the typical headlines (as usual) saying things were overvalued.

The market went up 10 months in a row in 1958. It went up nine months in a row in 1983 and 2017. Twice in the past 97 years, the market rose in 10 of 12 months, but couldn’t match that straight 11- or 12-month streak of the years noted above. Last year, the best monthly streak the S&P could manage was five months. The best recent year was 2019, when the market rose every month except May and August.

How about a stock return of 4,000%?

This might make the prophets of doom quiver a bit. We ran a Bloomberg screen this week, using Jan. 9’s closing market prices, on every stock in North America. The market at that time had been open for a grand total of six trading days, yet we found 21 stocks that were up more than 20 per cent this year, ranging from a high of 106 per cent for Athena Bitcoin Global to 20.6 per cent for Structure Therapeutics Inc. Since we are on the topic of pie-in-the-sky news, how about annualizing those returns? Wow, that would be something.

For our screen, we only used companies with a market capitalization of more than $100 million. The two companies noted above are more than $1 billion each. If we take off our market cap restriction, we get even more early winners.

Unlock the Power of Informed Investing with 5i Research!

DIY investing doesn't have to mean going it alone. At 5i Research, we're your trusted partner in navigating the stock market. Our platform offers comprehensive stock and market research, empowering you to make smart investment decisions. 

• Investor Q&A: Have burning questions? Get answers from our team of experts and fellow investors in our dedicated Q&A section.
• Research Reports: With over 60 meticulously researched Canadian stocks, our reports offer in-depth analysis, giving you the confidence to invest wisely. 
• Model Portfolios, Alerts, Forums, Portfolio Tracking, and Much More...

How about a single day stock gain of 25,000%?

 Screening for single-day, single-stock moves was a much harder exercise. There have been dozens, even hundreds, of takeover announcements where a single stock soared by more than 100 per cent in a single day. Some penny stocks can move 500 per cent to 1,000 per cent in a day, seemingly at random. We’ve seen some takeovers in the biotechnology industry at 400 per cent premiums.

But, to our knowledge, nothing comes close to Gateway Industries Inc. In 2011, its stock rose 25,000 per cent in a single day after media mogul Robert Sillerman (founder of American Idol) took control of the dormant company. Imagine clicking on your trading app the next day and seeing that type of return on one of your stocks. Unfortunately, our database wasn’t able to tell us what happened to the company after that. Bloomberg doesn’t show a current listing. Still, some shareholders had a pretty good day back then.

How about a one-year stock gain of 1,610%?

We will be brief with this golden tidbit, as the screen is a bit similar to one above. But for those saying you can’t make money in the stock market, we ran a screen of the big performers over the past year and found 104 companies that have had a one-year return of more than 100 per cent. The highest was 1,611 per cent. Some lucky duck bought Soleno Therapeutics Inc. at US$1.81 per share in February 2023, and it is now trading around US$42.

Take Care,