Happy Holidays! It is an exciting time to be an investor, and 2022 is setting up to be another good year in the stock market. Many of you have told me that you are weary of discussions about Covid and politics, so I thought it would be fun to share some quick facts to enliven your holiday conversations:
- Only 13 companies in the S&P 500 have zero debt – some of you own stock in Arista Networks and Ulta Beauty, 2 of the 13.
- Only 55 companies in the S&P 500 have 5-year earnings growth over 25% – some of you own Applied Materials, Arista Networks, Hologic Inc., Lam Research Corp., and Regeneron Pharmaceuticals Inc., 5 of the 55.
- The New York Stock Exchange originated in 1792, but the oldest recorded exchange dates back to 1611 in Amsterdam where just one company traded, The Dutch East India Company.
- In 1967, Muriel Siebert became the first woman to purchase a seat on the New York Stock Exchange – she remained the only woman for another 10 years.
- The NASDAQ exchange was the first decentralized network of firms trading stock, originating in 1971.
- The first brokerage firm to offer touch-tone phone stock trading was Charles Schwab (my alma mater) in 1989, and the first to offer internet stock trading was K. Aufhauser & Co. in 1994.
- In the 1890’s, new innovation made bicycle production and affordability soar in Great Britain, and about 700 new publicly traded bike companies emerged with soaring stock prices. The mania fizzled, and investors lost an average of -71%.
- 55% of publicly traded companies in the world are based in the United States, with Japan coming in second at 7%. The Taiwan stock market has the best investment performance for 2021.
Through November, the Pawleys Dividend stocks were up about +25%, walloping the Dow (up 14%) by +11%. That means for every $100,000 invested, you made an extra $10,000 or so after expenses, versus an index mutual fund. Index funds may be low cost, but you end up owning stocks of companies with high debt and poor earnings, which drags down performance in the long run. The more aggressive Pawleys Growth stocks were up +29% versus 23% for the S&P 500, beating by over +6%. I don’t always beat the market, but by keeping a cool head, systematically rebalancing portfolios, and picking stocks of companies with little or no debt, good earnings growth, and rock-solid cash flow, we tend to do better more often than not.
Happy Holidays and please let me know if you learn any more fun stock stats, I love hearing what is on everyone’s mind!