Here, in an attempt to answer the question, "What happened in January 2005?", we select the top 20 January 2005 losers (via % losses) out of about 2000 stocks, and make some comments about each.  In case you're not aware, the usual, solid seasonal trends of the last 11 Januaries reversed rather dramatically over this period.

We won't jump to any profound conclusions.  However, it's fairly obvious that a good chunk of these stocks fall into the category of "semiconductors or hi-tech stocks that traded a great deal higher several years ago".  What we have, then, are stocks that performed outrageously well in the "internet bubble" period of early 2000, lost significantly thereafter, had nice gains in 2003, and were largely weak in 2004.  

One theory worth considering:  Given the gains that many of these stocks experienced in 2003, it wouldn't make sense to sell these stocks at the end of 2004.  A better tax-avoidance strategy would be to dump them in 2005, thus delaying capital gains a full year.

Another explanation might be:  the losses were largely semiconductor-specific.  Since these stocks tend to be relatively cheap, and experienced losses over 2004, the losses in the "yearlong losers" and "cheap stocks" group were after-effects of the weakness in semiconductors.  This explanation suffers a bit with some analysis, though:  we note that expensive semiconductors outperformed cheap semiconductors, and those with decent 2004 performances outperformed those that were downright weak.

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