What Netflix, Chipotle and Boeing Can Teach Us About Market Cycles


We often make the point that investing is a long game, and it’s a mistake to overreact to a bad market day—and we’re right in the midst of a perfect example of that. If you panic-sold investments when the Grinch came to Wall Street on Christmas Eve 2018, you're probably kicking yourself. As of January 11, the S&P 500-stock index is up roughly 10 percent from that (very bad) day.

Look at a few popular stocks within the broad market measure and you'll find even bigger recoveries.

Tell me more.

Let’s start with Netflix, a member of a group dubbed FAANG: Facebook, Apple, Amazon, Netflix and Alphabet (Google). Because of their size, FAANG's moves have a pretty outsized influence on the market at large. All five have been Wall Street darlings in recent years—but even in that group, Netflix stood out.

At the start of 2015, its stock was sitting around $50. Netflix reached a high of more than $415 in summer 2018, an incredible 700-percent return. But it’d lost a quarter of its value by summer’s end, recovered a bit in the fall, then fell off a cliff in December. On Christmas Eve, it sank to $233.

But in the weeks since, the stock has jumped into the $330s—about 40 percent higher than its December low. Netflix still has a ways to go to meet its summertime highs, but the firm is among the clearest examples that panic-selling is a bad idea. After all, how would you have known to jump back in before the stock started its recovery?

The stock chart for Chipotle followed almost the exact same shape in 2018, hitting a high this summer around $526. It fell steadily into the fall, then plummeted to $385 on Christmas Eve. The new year has treated Chipotle well, however. It rose back above $500 during the second week in January, meaning it had recovered all the value it lost during the second half of 2018 and was up about 30 percent since Christmas Eve.

Boeing, the airplane maker, followed a slightly different pattern in 2018, but it, too, has recovered nicely. Boeing hit its all-time high in October at $394, but sank below $300 on Christmas Eve. But it too has had a nice run since, and currently sits about $350, or nearly 20 percent higher than its holiday doldrums.

TL; DR. Can you recap all that for me?

Since late December, Netflix is up about 40 percent, Chipotle is up about 30 percent and Boeing is up 20 percent. Since the S&P 500 overall is up about 10 percent, that means other components haven’t seen quite as nice numbers—but that’s the beauty of an index that tracks hundreds of company stocks at once. When some investments are down (or not flying as high), others may be up.

What does that mean for me, if I don’t own those stocks outright?

If you own an exchange-traded fund (ETF) that tracks the S&P 500, you can count these stocks among your holdings. ETFs are a relatively low-cost way to gain exposure to hundreds of stocks in one fell swoop.

These stocks’ patterns also underscore the importance of not trying to time the market (or frequently buying and selling in order to try and capture short-term gains). It can be tempting to react to the market’s moves with moves of our own, but no one knows the future. Over the long run, it’s generally smarter to hold tight through the ups and downs—not try to predict them.

Related: Being a Successful Investor Boils Down to These Three Principles

Disclosure: Investing involves risk including loss of principal. This article is provided for informational purposes only and is not intended to be a recommendation to buy or sell any specific stock or invest in any particular strategy. Past performance does not guarantee or indicate future results.

acorns+cnbcacorns cnbc

Join Acorns


About Us

Learn More

Follow Us

All investments involve risk, including loss of principal. The contents presented herein are provided for general investment education and informational purposes only and do not constitute an offer to sell or a solicitation to buy any specific securities or engage in any particular investment strategy. Acorns is not engaged in rendering any tax, legal, or accounting advice. Please consult with a qualified professional for this type of advice.

Any references to past performance, regarding financial markets or otherwise, do not indicate or guarantee future results. Forward-looking statements, including without limitations investment outcomes and projections, are hypothetical and educational in nature. The results of any hypothetical projections can and may differ from actual investment results had the strategies been deployed in actual securities accounts. It is not possible to invest directly in an index.

Advisory services offered by Acorns Advisers, LLC (“Acorns Advisers”), an investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”). Brokerage and custody services are provided to clients of Acorns Advisers by Acorns Securities, LLC (“Acorns Securities”), a broker-dealer registered with the SEC and a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and the Securities Investor Protection Corporation (“SIPC”). Acorns Pay, LLC (“Acorns Pay”) manages Acorns’s demand deposit and other banking products in partnership with Lincoln Savings Bank, a bank chartered under the laws of Iowa and member FDIC. Acorns Advisers, Acorns Securities, and Acorns Pay are subsidiaries of Acorns Grow Incorporated (collectively “Acorns”). “Acorns,” the Acorns logo and “Invest the Change” are registered trademarks of Acorns Grow Incorporated. Copyright © 2021 Acorns and/or its affiliates.

NBCUniversal and Comcast Ventures are investors in Acorns Grow Incorporated.