Momentum · month-end rule · Consumer & retail
12-1 Momentum on Starbucks
What the play says
Latest reading: 12-1 return 28.8%
SBUX with the play, last two years
Shading shows the play's call from the close that triggered it.
Return from 12 months to 1 month ago
Dashed line at 0.
Growth of $10,000 since 2005
Log scale. After trading costs, with T-bill interest while out.
The record
The play against buying and holding SBUX over exactly the same dates, after costs.
| Play, since 2005 | Hold, since 2005 | Play, 5 yrs | Hold, 5 yrs | |
|---|---|---|---|---|
| Annual return | +9.9% | +10.8% | −4.7% | −1.3% |
| Total return | +675% | +823% | −21% | −6% |
| Worst drawdown | −42.4% | −81.9% | −37.8% | −39.8% |
| Volatility | 22.6% | 30.9% | 20.3% | 31.8% |
| Sharpe ratio | 0.45 | 0.43 | −0.33 | −0.00 |
| Time invested | 68% | 100% | ||
| Switches per year | 1.5 | 0 |
Every call, graded
Right on 14 of 32 closed calls (44%). In calls averaged +19.1%; out calls saw SBUX move +3.0% on average.
| Called | Call | Price | Until | SBUX moved | Result |
|---|---|---|---|---|---|
| Mar 31, 2026 | IN | $88.56 | now | +3.9% | open |
| Aug 29, 2025 | OUT | $86.00 | Mar 31, 2026 | +3.0% | ✕ wrong |
| Sep 30, 2024 | IN | $92.70 | Aug 29, 2025 | −7.2% | ✕ wrong |
| Jan 31, 2024 | OUT | $86.74 | Sep 30, 2024 | +6.9% | ✕ wrong |
| Dec 29, 2023 | IN | $89.52 | Jan 31, 2024 | −3.1% | ✕ wrong |
| Nov 30, 2023 | OUT | $92.59 | Dec 29, 2023 | −3.3% | ✓ right |
| Jan 31, 2023 | IN | $99.68 | Nov 30, 2023 | −7.1% | ✕ wrong |
| Feb 28, 2022 | OUT | $82.30 | Jan 31, 2023 | +21.1% | ✕ wrong |
| Oct 30, 2020 | IN | $75.96 | Feb 28, 2022 | +8.4% | ✓ right |
| Jun 30, 2020 | OUT | $63.93 | Oct 30, 2020 | +18.8% | ✕ wrong |
| May 29, 2020 | IN | $67.75 | Jun 30, 2020 | −5.6% | ✕ wrong |
| Apr 30, 2020 | OUT | $66.28 | May 29, 2020 | +2.2% | ✕ wrong |
An in call is right when the price rose before the next call; an out call is right when it fell. The latest 12 of 33 calls shown.
How the play works
- In at month-end when the return from 12 months ago to 1 month ago is above zero.
- Out when it is zero or below.
Jegadeesh and Titman ranked thousands of stocks and bought the winners. Testing one stock against zero is time-series momentum, a related idea.
The skip-a-month form came later; their 1993 paper skipped at most a week.
The case against
Valeriy Zakamulin tested moving-average timing on up to 155 years of U.S. stock data and found no statistically significant edge in the second half of that record. The rules earned their keep in a few severe bear markets and lagged buy and hold for long stretches in between.