It’s the end of January, which means the self-fulfilling and short-lived January Effect has passed. The under-performed, beaten-down sectors and small-caps have gotten their fair share of re-investments from the tax-loss harvesters. Nevermind that it didn’t fully realize this year, we have something much more interesting at our hands, right now: The January After-Effect.

The mental and physical accounting year for most corporations and individuals tend to end on New Year’s eve. Investment managers and clients evaluate the past year’s performance and most of them fall prey to the gambler’s fallacy. If the roulette ball stopped on red 5 times in a row last year, then we should bet on black this year. Hence, when you look at almost any financial chart over multiple years, you can quite often spot the year-end. The correction or pivot in a chart signifies the start of a new trend. This trend is what we want to capture with the January After-Effect.

There will be several larger companies that will go up over 200% this year. Before they go up that much, they will go up 20%, 50%, 100% and so forth. Institutions and individuals have placed their bets for 2025. The professionals will add to winners and cut their losses as the year unfolds. In the summer around the mid-year review, the lagging investment managers will switch to the YTD higher performing stocks. But this mid-year effect is not as accentuated as the January one.  The January After-Effect is the formation of the beginning of the main trend of the year. So let’s look closer at that trend.

Here are the 10 best YTD performing, larger market cap companies of which more than one are likely to increase +200% in price by end of year. (sorted by size)

ARM holdings ($ARM) 35%

GE Vernova  ($GEV) 33%

Constellation Energy Corporation (#CEG) 55%

Vistra (#VST) 39%

Robinhood Markets (#HOOD) 35%

Symbotic (#SYM) 41%

Summit Therapeutics (#SMMT) 38%

Celestica (#CLS) 33%

IntraCellular Therapies (#ITCI) 52%

Thinking about looking at the fundamentals of some stocks? I suggest you start with the 10 above.

This is not financial advice. This is the January After-Effect.

You heard it here first – at Vanilla Equity.