|Thank you for sharing this. This is quite comprehensive and I appreciate the effort you put in it.|
You seem to have deeper data than I, so perhaps you'd like to confirm what I am saying. Based on what I've checked at, after a deep recession/crisis, the group that does the best is the small caps - which can be tracked via SLY or IWM. They do better than anything else, except perhaps the financials (XLF) during the first few months of recovery.
Intuitively this makes sense. The small caps that survive the crisis, will have more of their niche to themselves as their competitors are in bankruptcy or dire state. So they can grow faster and have pricing power.
At some point in time, typically 2 years later, the small caps begin to underperform (but not fall) while the big caps catch up. This is probably the time where the interest rates rise and the big boys have better access to capital. It's also the time *after* small caps are getting bought out, so the remaining small caps have to compete with big caps that are cutting into their turf.
Which leads to the next stage of small caps actually trending down, while the big caps go up.
And the last stage is the bear market where all stocks go down and the best performing asset class are the bonds.
Given that the small caps and median stock has outperformed big caps, there is a debate as to whether or not we are coming out of the bear or this is just a bear market rally. And I'd love to hear what you think is going on.
The bear camp has "history" and valuation on its side. The history being that this has been too fast, too short, and no retest of the bottom.
The bull camp also has "history" and valuation on its side. The history being that small caps and median stocks are leading - and the median stock, per XVG, actually retested the 2010 lows after an 18 months decline and is now leading on the way up. And valuation relative on interest rates and access to cheap credit are not too high (while also not so great either).
I don't think there is a precedent for what we are witnessing. So we are all just making guesses (some better than others) and I'd love to know what you think.