It has been an incredible two weeks. Volatility has been extreme, not just in stocks but in commodities as well. Giants are moving up and down almost like microcaps, traders are getting tired and long-term investors are trying to block it all out, keeping their eyes off of their nest eggs while holding their collective breaths.

As in all outbreaks of volatility, there are islands of relative stability drowned out by the companies causing the loudest turbulence. Separating the two can give a clearer picture of what is going on, and perhaps shed some light on some strategies for the next volatility outbreak. Here then, are the best and worst performers of the Dow Jones, counting from August 19, just before the current collapse began.

The Top Three: Caterpillar, Intel, Nike

Caterpillar Inc. (NYSE: CAT) is the best performing stock in the Dow 30 right now. It is only down 3.2% since August 19, while the Dow is down 8.3%. Do not be fooled though. It is not as if Caterpillar has been such a great performer recently. In fact, year to date it has doubled the Dow’s losses at 18%. Caterpillar’s collapse really began last July, as it has actually lost 5.5 times more than the index itself since then. The lesson here, which we will see with the upcoming examples, is that industrials that have already underperformed are decent defensive plays against volatile markets.

The same is true for Intel Corp. (NASDAQ: INTC), though to a slightly lesser extent. Intel has suffered nearly triple the Dow’s losses since December, having topped on December 5 of last year and declining 27% since then. But since August 19, it is only down a reasonable 3.8%. Most of its decline apparently has happened already, insulating it somewhat from the recent downturn.

ALSO READ: 4 Stocks to Sell Now, Until the Fed Acts

Nike Inc. (NYSE: NKE) is the exception. Not only has it been relatively stable recently. It is also outperforming the Dow in almost all time frames. This is because it is actually growing, unlike the other two. Nike shares are only down 5.4% in this decline. Good fundamentals are also a decent shock absorber.

The Bottom Three: Microsoft, Pfizer, Merck

The three worst Dow 30 stocks in the past two weeks are all down over 11% and in official correction territory. The lesson with Pfizer Inc. (NYSE: PFE) is almost as clear as day. A leader of the ballooning momentum-driven outperforming biotech sector, though showing little to no growth of its own, this is a perfect combination for underperformance during market panic. The same is true of Merck & Co. Inc. (NYSE: MRK), where annual revenues have been shrinking for several years.

Those two are the flip side of the underperformance defensive play. Outperforming stocks with mediocre fundamentals tend to fall more in a downturn.

Microsoft Corp. (NASDAQ: MSFT) is a bit of an anomaly because it has had decent fundamentals with top line growth, though it has had some erratic behavior this past year. Recent troubles with its Windows phone division and balance sheet impairment, combined with this year’s overall volatility, have perhaps lent it to underperforming in the recent downturn.

ALSO READ: 4 Stocks to Avoid If Inflation Heats Up

So the lesson is, if you want to beat the Dow during times of market panic, avoid the outperformers with so-so fundamentals, as well as stocks that have been volatile from long before the downturn. Stick with industrials that are either actually growing and/or have underperformed for quite a while before the panic started. The chances are higher that their more drawn-out declines will cushion them against some of the panic selling.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.