Biggest Gainers In The 2008 Stock Market Crash
The financial crisis of 2008 was one of the most significant economic events in recent history. The foreclosure boom caused by predatory lending led to increased national unemployment rates, contributing to a dramatic fall in the U.S. stock market. The S&P 500 fell nearly 57% during the crisis, dragging down the rest of the global economy.
S&P 500 Stock Chart: August 2008 to August 2010
Even though most stocks suffered unimaginable losses during the 2008 crisis, some did not. And some even thrived during the crisis…
The 7 Biggest Gainers In 2008:
You might be surprised how many stocks did well during the 2008 crash.
Here are some of the ones that made money for investors:
#1 - McDonald’s ($MCD)
It's no secret that McDonald's is known for its cheap food. And it seems that this reputation may have helped the fast-food chain weather the financial crisis better than most. In 2008, as the global recession took hold, McDonald's saw an influx of new customers.
Many of these customers were looking for an affordable option, and McDonald's was able to provide that. As a result, the company's stock performed better than average during the recession.
While other businesses were struggling, McDonald's was able to thrive, thanks partly to its reputation for selling cheap food.
McDonald’s Stock Chart: August 2008 to August 2010
#2 - Coca-Cola ($KO)
Just because the economy is struggling doesn't mean people will stop buying sugary drinks. In fact, Coca-Cola's sales actually increased during the recession, and its stock price rose as a result.
Part of this is that people often turn to comfort foods during times of stress, and sugary drinks can be seen as a form of comfort.
Additionally, Coca-Cola's products are relatively affordable, which makes them an appealing option for budget-conscious consumers. So next time there's an economic downturn, don't worry about your sugar cravings - they're likely to be just as strong as ever.
Coca-Cola’s Stock Chart: August 2008 to August 2010
#3 - Allegiant Travel Company ($ALGT)
Given the state of the economy in 2008, it's no surprise that many people were cutting back on travel. Airlines responded by offering fewer flights and raising prices, but this further discouraged customers.
Allegiant Travel Company, on the other hand, took a different approach. Instead of reducing flights, they actually increased their schedule and offered more affordable fares.
This strategy paid off, and Allegiant was one of the few companies that actually grew during the recession. Thanks to their low prices and convenient schedules, many people turned to Allegiant when they needed to travel. As a result, the company was able to weather the economic downturn and emerge as a strong competitor in the airline industry.
Allegiant Travel Company’s Stock Chart: August 2008 to August 2010
#4 - AutoZone ($AZO)
It’s no surprise that during a recession, people are looking to save money where they can. And what better place to save money than by avoiding a hefty car repair bill and fixing your car yourself? After all, who needs a mechanic when you can just read the manual or watch a youtube video, right?
AutoZone cranked out a 5.7% gain in sales and a 7.7% rise in net income in 2008. Making it one of the biggest gainers during the 2008 stock market crash.
AutoZone’s Stock Chart: August 2008 to August 2010
#5 - Netflix ($NFLX)
Netflix's subscriber growth increased rapidly in 2008, making the stock resistant to the stock market crash that year.
During a recession, consumers have less disposable income and try to reduce expenses wherever they can.
Many consumers likely cut out cable in exchange for Netflix to save money in 2008. Netflix's resistance to the recession is a testament to the company's ability to adapt and grow in difficult economic times. Netflix is a company that has weathered many storms.
Netflix’s Stock Chart: August 2008 to August 2010
#6 - Amazon ($AMZN)
Businesses large and small were forced to make difficult decisions in order to stay afloat. Amazon was no exception. However, instead of hunkering down and riding out the storm, Amazon decided to go on the offensive.
They used their core values of customer obsession and innovation to launch a whole host of new products and services.
As a result, they not only survived the recession, but they thrived. While other businesses were cutting costs and shedding jobs, Amazon was continuing to invest in its future.
This proved to be a wise decision, as Amazon is now one of the most valuable companies in the world.
Amazon’s Stock Chart: August 2008 to August 2010
#7 - Ross ($ROST)
Ross was able to benefit from the 2008 recession as consumers searched for ways to save money on shopping for clothes. The recession hit Ross hard, but the company was able to rebound quickly by implementing a variety of cost-saving measures.
For example, Ross began offering more affordable clothing options and promotions, which attracted budget-conscious shoppers.
In addition, Ross expanded its customer base by appealing to a wider range of demographics.
As a result of these efforts, Ross was able to emerge from the recession stronger than ever before. Thanks to the 2008 recession, Ross is now one of the most popular retail chains in the country.
Ross’s Stock Chart: August 2008 to August 2010
Recession Defensive Stocks
Defensive stocks are companies that tend to ride out recession better than most. This includes profitable blue-chip stocks that have proven themselves during turbulent times.
While these defensive stocks may still decline during recessions and volatile markets, they usually don’t get hit as hard compared to the S&P 500 index and risky growth stocks.
Examples of recession defensive stocks include companies like Coca-Cola, Walmart, and Procter & Gamble.
Regardless of economic conditions, consumers will still need to buy everyday items like food, toothpaste, and soap….
Final Thoughts: Biggest Gainers In 2008
No one likes to deal with stock market crashes. But some companies can benefit from economic chaos if they play their cards right. Especially if they are companies that help consumers save money.
The companies that can stay levelheaded and execute on that opportunity are the ones who will benefit over the long run. There is always opportunity planted in chaos.
- Josh
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As Always: Stack assets & enjoy life!
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