Evidence From 64,000 Stocks

April 23, 2023

“The stock market will find your own weakest personal trait, and then do everything in its power to use it against you.”

– Barry Bannister

RESEARCH

Hendrik Bessembinder analyzes long-run shareholder outcomes for over 64,000 global common stocks during the January 1990 to December 2020 period. A few takeaways:

  • 55.2% of U.S. stocks and 57.4% of non-U.S. stocks underperform one-month U.S. Treasury bills in terms of compound returns over the full sample

  • The top-performing 2.4% of firms account for all of the $US 75.7 trillion in net global stock market wealth creation from 1990 to December 2020

  • Outside the US, 1.41% of firms account for the $US 30.7 trillion in net wealth creation

Chick-fil-A generated  $18.8 billion in sales in 2022, with $8.6 million in revenue per standalone location. Link

According to subscriber-measurement firm Antenna, cancellations for Netflix, Hulu and HBO Max and others up 49% in 2022 from the previous year. Link

87% of teens own an iPhone. Link

At some point between the ages of 25 and 60 (link):

  • 73% of Americans will find themselves in the top 20 percent of the income distribution

  • 56% will enter the top 10%

  • 39% will enter top 5%

  • 12% will enter in the top 1%

FAANG+MNT is 25.4% of the S&P 500’s market cap, and 82.4% of its YTD gain (as of April 17, 2023). Link

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San Francisco office vacancy rate has seen an almost eightfold increase from the pre-Covid level.

As of 3/31/23

If the year ended on April 18, Apple’s 7.1% weighting in the S&P 500 would be the largest for any single company in the index with data going back to 1980.” Link

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SPONSORED BY ACRETRADERAn Investment That’s Historically Beaten Inflation

Let’s talk about correlation.

When you’re trying to build a well-diversified portfolio, correlation is typically not something you want—except in the case of inflation.

Farmland is an asset that historically correlates very closely with inflation:

According to a 2020 study from the TIAA Center for Farmland Research, land values in the top 32 agricultural states showed a 65% correlation with the Consumer Price Index (CPI) between 1970 and 2019.1

In other words, when inflation has risen in the past, generally farmland values have as well.

That’s largely because farmland produces food and commodities, which are factored into CPI.

If you’ve been looking for a hedge to potentially combat the persistent inflation we’re seeing these days, take a look at farmland.

It’s easy to access using the AcreTrader farmland investing platform.

PODCASTS

NYU Professor Aswath Damodaran talks about both stories and numbers drive valuations, the unbundling of education, what he thought about the meme stock craze, and more.

Ailman makes the case for predominantly passive equity allocations, explains why VC doesn’t fit CalSTERS size & style, discusses benchmark considerations & more.

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