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As a rollercoaster year winds up, a lot of investors are fighting a preconception that the last few months have been miserable for most stocks outside Utilities, Real Estate and other safe havens. Let's take a little time this morning to test that hypothesis.

 

All but two of our portfolios have actually gained ground since September 30. Ventas (VTR: $57, down 1% this week) has been a drag on our REITs and the one-two punch of Twitter (TWTR: $30, down 1%) and Dollar Tree (DLTR: $92, down 1%) took what would have been an 8% gain for the Special Opportunities portfolio back down to breakeven. Those three stocks have been savaged this earnings season. We like their long-term stories enough to give them time to recover.

 

After all, most of our other stocks are having a good quarter and many are flirting with greatness. Remember when high-growth Technology and Aggressive themes were suffering? Those portfolios are now up 16% and 8% this quarter, thanks to huge performance from Okta (OKTA: $120, up 1%), CyberArk (CYBR: $120, up 2%), Paycom (PAYC: $266, down 1%), Roku (ROKU: $147, up 2%), Splunk (SPLK: $149, up 1%) and Spotify (SPOT: $146, down 1%). Roku has rallied another 44% since the end of September. That's not a loser. It's one of the best stories on Wall Street this year.

 

All in all, the BMR universe is up close to 6% this quarter, matching the performance of the S&P 500 as a whole. Index fund investors are cheering this rally. After the way this season started, we have zero reason to complain. These are classic Bull Market conditions.

 

And when things get really bad, history demonstrates that BMR stocks hold up a little better than the market as a whole. Look at the comparable period of last year. The market was sliding into near-bear-market territory, down 9% for the quarter. Our recommendations felt the pain too, but they were only down 8% at that point . . .  boosted by a 3% gain for the REITs.

 

Last year's leader is this year's laggard. And so it goes. Stay focused through the rotation and you'll keep raising the bar.

 

Likewise, we see BMR stocks that have been beaten up in the last few weeks bouncing back. For all practical purposes, Wall Street is admitting that the pressure on companies like Roku (ROKU: $146, up 1%) and Dollar Tree (DLTR: $93, up 1%) were unjustified and exaggerated. We agree. However, the only things they have in common is their recent declines and the fact that they broadly operate in Consumer markets . . . but that's as far as it goes. One is an aggressive high-growth Technology company and the other is a low-priced Retail chain.

 

We're pleased to see neglected stocks get some glory and suspect there's more of this ahead as institutional investors adjust their positions to close out the old year. Our REITs have been a source of comfort in the market's weak seasons and are currently up 10% YTD. Now's their chance to shine, in the sweet spot between economic optimism (good for landlords) and healthy caution (good for yield stocks).