November pretty much follows the quarterly theme...buy cheap stocks and stocks with big yearlong losses, and do exactly the opposite if you want to short stocks.  As with the quarter itself, there's the potential to make a pretty penny by picking up volatile stocks, but that strategy can reverse in any given year, saddling you with big losses (check out 1995-97, 2000).

In 1999, stocks with high yearlong gains fared well in the month (and October and December as well), though losers didn't get slaughtered.  Searching our tables, we can't find any clear-cut signal that might have predicted this anomaly...a simplistic explanation might be, "it was the height of the momentum investing era".  The disastrous 2008 session punished yearlong losers, but the effect wasn't strong enough to wash out the longer-term power of investing in beaten-up stocks at this time of year.

The industry groups that find themselves in our tables also mirror those in our fourth quarter tables...go with computer stocks (especially in the first half of the month) for gains, avoid REIT's and oils.  REIT's have had a couple years that bucked the general trend (e.g. 2003), and oils were strong in one year (2004), but the general tendencies favor losses in a rather significant way.

Despite gains in the broad computer group, computer peripherals are not the stocks to buy in the second half of the month.

According to our "dual" data, you might be able to push the gains in computer stocks even further by buying ones that have taken a beating over the last year.

For gains in the first half of the month, look for stocks that have taken sizeable losses over the previous three months or year.

Though they don't make our full-month tables, biotechs and medical stocks have done well in the second half of the month.  These gains are also more consistent than most other second half strategies.  We see this pattern in several other months...buy computer stocks in the first half of the month, buy biotech in the second half.  Rather odd...perhaps we're looking at some sort of phenomena whereby a nice move in standard "high-tech" stocks segues into nice moves in "biotech" stocks.  Our own theory is that the guys who like to manipulate stock prices for option gains before the third Friday of the month have a special fondness for computer stocks, and shift into biotechs later in the month.

Transportation and retail stocks have fared well in the second half of the month, while oil stocks have performed quite weakly in this half., with a 2004 exception.

Since 1993, the month has averaged about 2.2% gains.  The gains are roughly equal in both halves, but are more predictable in the first half...while we show numerous second half strategies that have averaged nice gains over the years, they are far from immune to reversal in successive years.

The following table lists stocks that have performed particularly strongly or weakly in the month of November:

The strategy of going with or against "industry momentum" has not proven particularly strong on either the long or short side in the full month.  There is a slight correlation, however, with industry-wide losses in the last week of October and gains in the first half of November, particularly where volatile stocks are concerned.  One often finds inflection points in our seasonal charts in the beginning of November...it's a time when trends have a way of reversing.

Using S&P 500 data going back to 1983, the month has averaged closer to a 1.8% gain.  The same patterns mentioned above are in play...yearlong losers and cheap stocks fare particularly well.  Given the positive nature of the month, volatile stocks have fared well.  Hi-tech stocks have had strong average gains, but have been a bit inconsistent.  Avoiding stocks with strong October finishes is recommended.

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