Less than 2% S&P 500 Index he has consistently won over the past 5 years. And the profit is really impressive.
There are few actions that do not fail. In fact, only 9 of S&P 500 Index have had positive annual returns since 2018. Which? Let’s get a look:
1 – Axon Enterprise: – a company engaged in the development of weapons technology and products for the army, police and civilians. Its first product is the Taser line of stun guns.
2 – Eli Lilly: is a pharmaceutical company specializing in the development of drugs for the treatment of diseases such as diabetes, cancer and rheumatoid arthritis. It is one of the 15 largest companies in the USA.
3 – O’Reilly Automotive: — a network of stores selling automotive parts and accessories. The company has over 5,600 stores in the US.
4 – Arthur J. Gallagher: is a global insurance brokerage company providing risk management and consulting services. The Illinois-headquartered company has more than 43,000 employees.
5 – Ribbons: is a company engaged in the production and distribution of uniforms, consumables for facilities and services related to labor protection, which is one of the largest in the industry.
6 – W. W. Granger: is a company engaged in the sale of industrial and commercial products such as tools, lighting, electrical and chemical products. It serves over three million customers worldwide.
7 – Progressive: is an insurance company specializing in automobiles, home and business. It is the largest in the USA.
8-TJX: is a retail chain that operates stores such as TJMaxx, Marshalls, HomeGoods and Sierra Trading Post. The company is based in Massachusetts.
9 – Berkshire Hathaway: is a holding company that owns controlling stakes in several subsidiaries, including GEICO, Duracell, Dairy Queen and Fruit of the Loom. It is known that the company is headed by Warren Buffett.
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The market as a whole (as measured by the S&P 500) has been falling for two of the last five years. In 2019, 2020, and 2021, the S&P 500 index rose. But in 2018 it fell by 6%, and in 2022 there was one of the largest falls (-19%). That is why it is remarkable that these actions did not suffer, especially in those negative years.
Let’s look at the combined returns of these stocks since 2018 compared to the S&P 500 (black line):
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The only stock on the list that did not outperform the S&P 500 was Berkshire Hathaway. Warren Buffett. However, it would be unfair to analyze performance alone without taking into account the risk taken.
And a good way to analyze it is to use the Beta coefficient, which measures the risk of a name in relation to the market in which it operates. And Berkshire Hathaway has a beta of less than one. This means that it has less volatility than the market (S&P 500), so the perceived risk is lower.
WhatWill these 9 companies continue their winning streak? It’s hard to say, but they definitely have a good foundation and track record.
Note: The material contained in this note should NOT be construed as investment advice or a recommendation to buy or sell any particular asset. This content is for educational purposes only and represents the views of the author only. In any case, before investing, it is recommended to consult a professional.
Director General of the Financial Letter