What Cities Have Been Best for the Market?
By: We are calling it CNBC's First Annual Recovery Road Trip.
The technical name would be "what cities have been the best for the stock market over the past year," but that doesn't fit well in a headline.
We are identifying the three metro areas around the country whose companies have been the best performers over the past year, highlighting the standout stocks and going on the road to visit these fine cities.
We'll take you on a tour of each, dig out some of the under-the-radar stocks you may have missed and speak with business leaders, local bigwigs and even a few surprise guests.
The election may be behind us but the "fiscal cliff" still looms, so there will be no shortage of questions about how each city plans to "rise above" and post a solid 2013. (Read More: What Is the Fiscal Cliff?)
Here's how our challenge worked.
A little over a year ago I built indexes comprised of the nine or 10 largest publicly traded companies in 23 metro areas around America.
For example, the 10 biggest companies around the Phoenix area were put into an equal-weighted index and given the highly original name of the "Phoenix Index." Repeat that 22 more times and let 'er ride for a year.
If you're wondering, it was the odd number of 23 indexes because there simply aren't more metro areas with enough companies with sufficiently large market caps to make up a nine or 10 stock index.
From Oct. 31, 2011 to this past Oct. 31 we tracked all the indices. On Nov. 1 we totaled up the 52 week returns for each index, dropped the single best and single worst performer from each and averaged the rest. We dropped the single best and worst to give it a more clean result.
There were some cities where a stock may have doubled or even tripled in a year, such as PulteGroup in Detroit area, that we felt artificially skewed the mean and didn't reflect the total aggregate performance of the metro area.
(Read More: Cities With the Most Affordable Homes.)
In our view, one or two companies with outsize returns turning an index positive for the year while other companies stocks dropped didn't accurately reflect the real feel of an area's recovery. Hey, our contest, our rules.
It all kicks off Monday when we'll be live in the city with the third best stock returns over the past year. We'll hop a flight after the show, hit number two on Tuesday and the big winner on Wednesday.
You will be surprised at what cities' stocks have really stood out. I sure was when I ran the results.
In fact, surprises will abound all around. Promise.
Join us on "Street Signs" for it and in the meantime do a little dance for good luck air travel. I'll need it.
—By CNBC's Brian Sullivan
@SullyCNBC
Tune in:
"Sreet Signs" airs at 2 p.m. ET.
