Nums: What % of stocks actually create shareholder wealth?

We’re talking higher long-run capitalizations, not trading profits.

Over the period 1983 to 2007, the S&P increased more than 7-fold. but …

image

According to Longboard Asset Management, over the period 1983 to 2007:

  • 40% of stocks lost value
  • 19% lost at least three-quarters of their value
  • 64% underperformed the market
  • 25% were responsible for all the market’s gains.

Conclusion: Statistically, successful stock-picking is more about avoiding awful investments than finding good ones.

= = = = =

P.S. Tell me that you can look at the last 15 years on the above chart and not feel a little queasy about where the market is these days.

It sure looks like a pattern to me …

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2 Responses to “Nums: What % of stocks actually create shareholder wealth?”

  1. Alexander S Says:

    You’re feeling queasy? That almost rhymes with Quantitative Easing!
    Next stop… Vertigo!

  2. TK Says:

    Now overlay executive compensation. That should get you from queasy to projectile vomitting.

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