The Amex is the Annika Sorenstam of Wall Street -- an overlooked powerhouse in a smaller league that has broken into the big time in a powerful, splashy but somewhat mysterious way.
You haven't seen any headlines about the American Stock Exchange on any finance magazines, but there's no denying that the companies that list there, in aggregate, have consistently outpaced their rivals on the New York Stock Exchange and Nasdaq Stock Market in the past one-, three-, five- and seven-year periods. Take a look at this table below, which compares the Amex composite with the Nasdaq Composite, Dow Jones Industrials, S&P 500 and Russell 2000.
Because most of the companies that list on the American Stock Exchange are small and medium-sized companies, one might guess that the success of its composite is a small-cap phenomenon. (Only 12 Amex stocks weigh in at more than $1 billion in market capitalization.) Yet the Amex has handily beaten the small-cap Russell 2000 index in every period.
And because it did well in periods of softness for highflying growth stocks, one might guess that its success can be laid to a concentration of value stocks. Yet, again, it's clear that the Amex is beating the highflying Nasdaq, even in this year of sharp rebound for tech stocks.So where is its persistent strength coming from, and how can we take advantage of it?
|Amex||Nasdaq||S&P 500||Dow||Russell 2000|
|January 2003 to May 2003||10%||9%||3%||0%||6%|
|January 2002 to May 2003||9||-24||-18||-15||-15|
|January 2001 to May 2003||4||-34||-28||-19||-10|
|January 2000 to May 2003||5||-64||-37||-24||-16|
|January 1997 to May 2003||56||17||26||33||15|