Bank of America Corp (BAC), Citigroup Inc (C), JPMorgan Chase & Co. (JPM): Daily Stock Prices Are Completely Irrelevant

Page 1 of 2

“I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.”

– Warren Buffett

Most investors have heard or seen this quote from the great Warren Buffett, but very few actually listen and heed his advice. The availability of daily stock prices has drastically changed with the introduction of the Internet. What once was available mainly via newspapers has now become an inescapable and always-present reminder of one’s flucuating portfolio.

Investors check stock quotes on everything from their online brokerages account to their jam-packed Twitter feeds. We’ve reached a point where one almost has to go out of his or her way not to see how their favorite stock or the S&P 500 performed on a certain day.

To truly highlight the insignificance that daily fluctuations have on a long-term holding, let’s take a look at the four largest U.S. banks, all of which handily outperformed the broader market in 2012:

1. Bank of America Corp (NYSE:BAC) Bank of America’s shares soared a blistering 100% in 2012. Yes, 100%. With that kind of return, the stock must have been up almost every day, right? Wrong. Here’s how Bank of America Corp (NYSE:BAC) shares end each trading day in 2012:

2. Citigroup Inc (NYSE:C) Citigroup Inc (NYSE:C)’s stock price rose almost 40% in 2012, but those who checked the stock price every day and nothing else probably would have thought the stock went essentially nowhere. Here’s the daily breakdown:

3. JPMorgan Chase & Co. (NYSE:JPM) If an investor only read the headlines about JPMorgan Chase & Co. (NYSE:JPM) in 2012 and checked the daily stock price, he or she probably would have a very skewed view of the stock’s performance. The stock returned nearly 26%, almost doubling the return of the S&P 500, despite an embarrassing and highly publicized trading loss in its CIO division. After each closing bell, the stock ended like this:

4. Wells Fargo & Co (NYSE:WFC) Different bank, same story. Shares of Wells Fargo & Co (NYSE:WFC) also crushed the market and returned more than 20%. You can probably guess how the shares ended each trading session:

You may be thinking — “Well, that’s interesting, but those are just examples of stocks that had great years, I bet underperforming stocks look bad most days.” Well, no. One of the most hated and dreadful stocks to own in 2012 was  J.C. Penney Company, Inc. (NYSE:JCP).

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!