A finance professor told me that since it’s IPO Coke has the greatest return out of any public company ever. One share bought at its IPO price in 1919 is worth several million today.
CFADummy, you are aware of the concept of bull and bear markets, right? I don’t know how many ways I can say this, but you are arbitrartily selecting an unusual decade for stocks and drawing far-reaching conclusions. The stocks you mention were “stuck in a price range” during the 70’s and early 80’s because we were going through two brutal bear markets. In fact, the S&P 500 traded at about the same level in August of 1982 that it did in December of 1968. Your argument that they are not good “long-term investments” based on one specific 10-year period is flawed. Take all of the charts you are citing and look at them on either a five year and a 15-year basis. You will see that the five year period looks great because it eliminates the 2000-2002 bear market. The 15-year period also looks great because it includes both the inflation and deflation of the late 90’s bubble. Play around with the time frames on your charts a little and see if that changes your perspective.
These points have already been made, be apparently need to be reiterated: 1. 10 year returns today are going from a market top to a market bottom. How do 20,15,5 and 3 year returns look? 2. There’s basically no evidence that anyone can generate alpha in long-only large cap equities, so why bother with anything buy indexes? I should also point out I agree with the thesis that stock returns will be lower in the next 15 years. People have come to expect 11-12% from the broad market, and I think if you invest today with a 10 year horizon you’ll be lucky to get 10%, and that’s with today’s depressed prices factored in.
Dapper425 Wrote: ------------------------------------------------------- > A finance professor told me that since it’s IPO > Coke has the greatest return out of any public > company ever. One share bought at its IPO price in > 1919 is worth several million today. That’s an interesting question. You can’t really compare anyone apples-to-apples though - MSFT might have a better average annual return, but it’s total return might not be as high because it hasn’t been around that long. Others I would wonder about are BRKA and WMT. I once figured Sam Walton’s split adjusted cost basis in WMT was just under $.01.
Look what happened to Starbucks today. It got hammered 
Starsucks sucks and I called it since it was in the $30s. I wish I had more conviction to hold my short position but I covered long ago. They have other problems which the market isn’t even noticing yet.