Over the past decade, as private equity firms like Blackstone, KKR and Carlyle Group have grown into a gargantuan size and raised buyout funds nearing or eclipsing $20 billion, one critique of their cash gusher was that it would inevitably drive fund returns lower. Now, as the U.S. economy emerges from the Coronavirus pandemic and markets soar to new record highs, recent earning results from America’s big buyout firms reveal a trend of rising returns even as funds surged in size.
Fueled by piping-hot financial markets, returns from the flagship private equity funds of Blackstone, KKR and Carlyle are on the rise. Mega funds from these firms that recently ended their investment period are all running ahead of their prior vintages and raise the prospect that PE firms can achieve net investment return rates nearing or exceeding 20%.
Carlyle, which reported first quarter earnings on Thursday morning, is the newest firm to exhibit rising performance. Its $13 billion North American buyout fund, Carlyle Partners VI, which was launched in 2014 and ended its investment period in 2018, is now being marked at a 21% gross investment rate of return and a net return of 16%, or a 2.2-times multiple on invested capital.
The fund has realized $8.8 billion of investments, like insurance brokerage PIB Group and consultancy PA Consulting, and sits on a portfolio marked at nearly $20 billion. The returns are two-to-three percentage points ahead of Carlyle Partners V, the flagship buyout fund it raised just before the financial crisis. That fund is on track to earn a net IRR of of 14%, or a multiple of 2.1-times its invested capital.
Rising fund profitability, even at scale, is helping to fuel Carlyle’s overall profitability. Net accrued performance fees from Carlyle VI ended the quarter at nearly $1.4 billion and Carlyle sits on a record $3.2 billion in such performance fees that will likely be fully realized in 2021. The firm’s once-lagging stock has recently risen to new record highs.
Blackstone’s flagship $18 billion private equity fund, Blackstone Capital Partners VII, was closed in May 2016 and ended its investment period in February 2020, just before the Covid-19 economic meltdown. After taking public or exiting investments like Bumble, Paysafe and Refinitiv, this fund is now marked at a 18% net investment rate of return, five percentage points better than its prior fund, which raised in the aftermath of the 2008 crisis.
In the past two quarters, the fund has been the single biggest driver of Blackstone’s record profitability, generating over $1.6 billion in combined accrued performance fees. In the first quarter, the fund was responsible for 82-cents in quarterly per-share profits, filings show. Overall, Blackstone sits on a record $5.2 billion in net accrued performance fees.
At KKR, it’s a similar story. The firm’s $8.8 billion Americas XI fund, which was raised in 2012 and ended its investment period in 2017, is generating net IRRs of 18.5%, or a 2.2-times multiple on invested capital, according to the its annual 10-k filing from February. That sets up the fund to be KKR’s most profitable buyout fund since the 1990s.
KKR’s first quarter results, set to be released in early May, may show even bigger windfalls and higher returns. Its recent public offering of Applovin looks to be one of the greatest windfalls in the firm’s history, bolstering returns and profits for its even newer $13.5 billion Americas Fund XII. Asia could also be an area of big returns as its $9 billion Asian Fund III monetizes investments.
As returns rise, PE firms have seen their stocks soar to new record highs.
Once a laggard, Carlyle is up 36% year-to-date to a new record high above $42, according to Morningstar data. The firm, now led by chief executive Kewsong Lee, has returned an annual average of 23% over the past five-years.
KKR has done even better, rising 40% this year alone and 125% over the past 12-months. It’s five and ten-year total stock returns are now 33% and 13.5%, respectively.
The top performer in the industry is Blackstone Group, which recently eclipsed a $100 billion market value. Up 39% this year alone, Blackstone’s generated an average annualized total return of nearly 19% over the past decade, which is about five-percentage-points better annually than the S&P 500 Index.
Bottom Line: With public markets hitting new record highs, buyout firms are reporting LBO returns not seen since the 1990s. Their stocks, which once badly lagged the S&P 500, are beginning to beat the market.
I’m a staff writer and associate editor at Forbes, where I cover finance and investing. My beat includes hedge funds, private equity, fintech, mutual funds, mergers, and banks. I’m a graduate of Middlebury College and the Columbia University Graduate School of Journalism, and I’ve worked at TheStreet and Businessweek. Before becoming a financial scribe, I was a member of the fateful 2008 analyst class at Lehman Brothers. Email thoughts and tips to agara@forbes.com. Follow me on Twitter at @antoinegara
NEW YORK, NEW YORK – JULY 23: People walk along Broadway as they pass the Wall Street Charging Bull statue on July 23, 2020 in New York City. On Wednesday July 22, the market had its best day in 6 weeks. (Photo by Michael M. Santiago/Getty Images)
Credit Suisse analyst Jonathan Golub introduced his 2021 price target for the S&P 500 (^GSPC) of 4,050, implying 12.2% upside from Tuesday’s closing levels. Underpinning this upbeat call is his assumption that two years from now, the post-virus economic recovery will have already hit a peak.
“Our 2021 forecasts are designed to answer a simple question: what will the future (2022) look like in the future (end of 2021),” Golub said in a new note Wednesday. “From this perspective, we are forced to de-emphasize the near-term, focusing instead on the return to a more normal world.”
“As we look toward 2022, the virus will be a fading memory, the economy robust, but decelerating, the yield curve steeper and volatility lower, and the rotation into cyclicals largely behind us,” he added.
Based on Golub’s analysis, economic activity as measured by GDP growth will renormalize at levels slightly above trend, or with quarterly annualized growth rates just over 3%, starting in the second half of 2021.
Since the stock market discounts future events, each of these prospects for further improvement down the line should translate into a higher S&P 500 as investors price in these events.
Analysts have already begun to account for an anticipated improvement in corporate profits, as S&P 500 earnings per share (EPS) have on aggregate sharply topped consensus expectations so far for each of second and third quarter results this year.
“We expect 2020 estimates to rise, 2021 to remain stable and 2022 to moderate,” Golub said.
His 2021 S&P 500 price target of 4,050 is based on earnings per share of $168 next year, for an improvement of 20% over the expected aggregate EPS this year. He expects EPS will then rise to $190 in 2022.
Sector leadership
On a sector basis, Golub rates technology stocks as Overweight for 2021, given their “faster sales growth, superior margins, robust FCF [free cash flow], and low leverage. He also rated financials, one of the laggard sectors so far for the year-to-date, as Overweight, given their propensity to lead during recoveries.
“Consistent with a typical recovery, banks should benefit from improving credit conditions, increasing transaction volumes, and a steepening yield curve,” Golub said. “The group is adequately reserved, likely. resulting in a greater return of capital.”
Golub designated cyclicals with a Neutral rating for next year, saying he is “positively inclined toward economically-sensitive groups and believe[s] their momentum should persist over the near-term.” But he added that he thinks the largest quarter-over-quarter improvements in economic activity have already come and gone, leaving more tepid further upside potential for stocks with profits closely tethered to economic growth.
He rated non-cylicals like consumer staples as underweight, while giving health care specifically an Overweight rating.
“Non-cylicals should lag in an improving economy as falling volatility supports higher P/Es (price-earnings multiples) for riskier assets, and rising rates make their high dividend yields less appealing,” he said. “The one exception is health care, which should outperform given a more robust earnings trend.”
Markets are set to sink yet again today for the fifth time in six days. If the pace holds up today, this will also be the second consecutive monthly loss for the markets. While volatility is normal pre-election, investors are continuing to grapple with COVID surging to record numbers and resulting in new shutdowns and lockdown measures. Additionally, with zero sign of another stimulus package, fear is certainly rampant about a double dip recession. The Dow dropped 100 points or .38%, while the S&P dropped .41% and the Nasdaq NDAQ-0.8% declined .75%.
Although yesterday’s news revealed strong economic data regarding US GDP growth and jobless claims, investors largely ignored that today. Apple AAPL-5.6% sharply declined after reporting a 16% decline in iPhone sales and failing to provide guidance for the upcoming quarter. Despite a big beat on revenue, Amazon AMZN-5.4% also declined. Twitter led the declines falling over 15% after reporting user growth that fell short of expectations. For investors looking to make sense of the markets, the deep learning algorithms at Q.ai have crunched the data to give you a set of Top Buys. Our Artificial Intelligence (“AI”) systems assessed each firm on parameters of Technicals, Growth, Low Volatility Momentum, and Quality Value to find the best long plays.
Sign up for the free Forbes AI Investor newsletter here to join an exclusive AI investing community and get premium investing ideas before markets open.
Broadridge Financial Solutions (BR)
Corporate services company Broadridge Financial Solutions BR-0.4% is our first Top Buy of the day. The company, which was founded in 2007, is a spin-off from Automatic Data Processing ADP-0.1%. Our AI systems rated Broadridge C in Technicals, B in Growth, B in Low Volatility Momentum, and B in Quality Value. The stock closed up 1.95% to $138.12 on volume of 560,940 vs its 10-day price average of $141.94 and its 22-day price average of $139.91, and is up 13.2% for the year.
Revenue grew by 1.52% in the last fiscal year and grew by 6.19% over the last three fiscal years, Operating Income grew by 0.88% in the last fiscal year and grew by 5.42% over the last three fiscal years, and EPS grew by 2.0% in the last fiscal year and grew by 13.17% over the last three fiscal years. Revenue was $4529.0M in the last fiscal year compared to $4329.9M three years ago, Operating Income was $624.9M in the last fiscal year compared to $598.0M three years ago, EPS was $3.95 in the last fiscal year compared to $3.56 three years ago, and ROE was 37.39% in the last year compared to 40.79% three years ago. Recommended For You
Amdocs DOX+1.7% is our next Top Buy of the day. A leading software and services provider for communications and media companies, Amdocs is also the largest vendor by revenue in the monetization platforms segment by a wide margin. Our AI systems rated Amdocs C in Technicals, B in Growth, A in Low Volatility Momentum, and B in Quality Value.
The stock closed up 0.84% to $55.42 on volume of 732,226 vs its 10-day price average of $56.85 and its 22-day price average of $57.62, and is down 22.2% for the year. Revenue grew by 1.46% in the last fiscal year and grew by 7.22% over the last three fiscal years, Operating Income grew by 3.9% in the last fiscal year and grew by 14.43% over the last three fiscal years, and EPS grew by 3.5% in the last fiscal year and grew by 21.33% over the last three fiscal years.
Revenue was $4086.67M in the last fiscal year compared to $3867.16M three years ago, Operating Income was $569.75M in the last fiscal year compared to $517.33M three years ago, EPS was $3.47 in the last fiscal year compared to $2.96 three years ago, and ROE was 13.63% in the last year compared to 12.43% three years ago. Forward 12M Revenue is expected to grow by 1.82% over the next 12 months, and the stock is trading with a Forward 12M P/E of 11.82.MORE FROM FORBESAmdocs (DOX)
Price of Amdocs compared to its Simple Moving Average YCharts
Fastenal Co (FAST)
Industrial supplies company Fastenal FAST+0.3% is our third Top Buy of the day. Fastenal is the largest fastener distributor in North America. Our AI systems rated Fastenal C in Technicals, B in Growth, A in Low Volatility Momentum, and B in Quality Value. The stock closed up 0.42% to $43.12 on volume of 2,291,171 vs its 10-day price average of $44.02 and its 22-day price average of $44.72, and is up 18.72% for the year. Revenue grew by 4.36% in the last fiscal year and grew by 26.78% over the last three fiscal years, Operating Income grew by 5.57% in the last fiscal year and grew by 26.57% over the last three fiscal years, and EPS grew by 5.82% in the last fiscal year and grew by 46.01% over the last three fiscal years.
Revenue was $5333.7M in the last fiscal year compared to $4390.5M three years ago, Operating Income was $1056.0M in the last fiscal year compared to $880.8M three years ago, EPS was $1.38 in the last fiscal year compared to $1.0 three years ago, and ROE was 31.84% in the last year compared to 28.71% three years ago. Forward 12M Revenue is expected to grow by 0.89% over the next 12 months, and the stock is trading with a Forward 12M P/E of 28.7.MORE FROM FORBESFastenal (FAST)
Price of Fastenal Co compared to its Simple Moving Average YCharts
Lockheed Martin Corp (LMT)
Major aerospace and defense contractor Lockheed Martin LMT-0.7% is our fourth Top Buy of the day. As of 2014, Lockheed Martin is the world’s largest defense contractor based on revenue, with half of that revenue coming from the US Department of Defense. Our AI systems rated Lockheed Martin B in Technicals, B in Growth, A in Low Volatility Momentum, and A in Quality Value. The stock closed up 0.45% to $352.44 on volume of 1,545,758 vs its 10-day price average of $368.71 and its 22-day price average of $377.48, and is down 10.08% for the year.
Revenue grew by 7.41% in the last fiscal year and grew by 28.59% over the last three fiscal years, Operating Income grew by 11.3% in the last fiscal year and grew by 53.19% over the last three fiscal years, and EPS grew by 5.74% in the last fiscal year and grew by 243.8% over the last three fiscal years. Revenue was $59812.0M in the last fiscal year compared to $49960.0M three years ago, Operating Income was $7698.0M in the last fiscal year compared to $5593.0M three years ago, EPS was $21.95 in the last fiscal year compared to $6.75 three years ago, and ROE was 269.7% in the last year compared to 455.42% three years ago. Forward 12M Revenue is expected to grow by 3.07% over the next 12 months, and the stock is trading with a Forward 12M P/E of 13.68.MORE FROM FORBESLockheed Martin (LMT)
Price of Lockheed Martin Corp compared to its Simple Moving Average YCharts
Take-Two Interactive Software (TTWO)
Our final Top Buy of the day is Take-Two Interactive Software TTWO-4.8%. Take-Two is a leading video game publisher most known for owning video game companies Rockstar Games and 2k. Take-Two is best known for video game franchises such as Grand Theft Auto, NBA2k, and Red Dead. Our AI systems rated Take-Two D in Technicals, A in Growth, B in Low Volatility Momentum, and A in Quality Value. The stock closed down 0.99% to $162.77 on volume of 1,257,438 vs its 10-day price average of $165.0 and its 22-day price average of $164.76, and is up 33.33% for the year.
Revenue grew by 9.42% in the last fiscal year and grew by 88.51% over the last three fiscal years, Operating Income grew by 11.69% in the last fiscal year and grew by 213.83% over the last three fiscal years, and EPS grew by 10.07% in the last fiscal year and grew by 153.42% over the last three fiscal years. Revenue was $3088.97M in the last fiscal year compared to $1792.89M three years ago, Operating Income was $425.35M in the last fiscal year compared to $151.38M three years ago, EPS was $3.54 in the last fiscal year compared to $1.54 three years ago, and ROE was 17.66% in the last year compared to 13.92% three years ago. The stock is also trading with a Forward 12M P/E of 46.84.MORE FROM FORBESTake-Two Interactive Software (TTWO)
Price of Take-Two Interactive Software compared to its Simple Moving Average YCharts
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Q.ai, a Forbes Company, formerly known as Quantalytics and Quantamize, uses advanced forms of quantitative techniques and artificial intelligence to generate investment recommendations across all asset classes. When it comes to money, no one should have to settle. We make investing less intimidating, more accessible and a lot of fun for everyone. That’s investing, reimagined.
89.2K subscribers// This is the best penny stocks to buy now 2020 November edition.Join our private community over at Patreon https://www.patreon.com/stockmoe to talk stocks that could grow your portfolio to new levels. I will have exclusive materials as we move forward and my own stock purchases and a brand new high growth portfolio that I am sharing with everyone. If you want to have a one on one person to help you, then this is a must for any serious investor. We just got our private Discord up and running as well. SIGN UP FOR WEBULL: (It’s only a $100 deposit and you get 3 free stocks worth $8 a piece to $1600 from this referral link…I recently signed up…love it and I also get a free stock) https://www.webull.com/activity?invit… Sign up for Robinhood here for a free stock: https://join.robinhood.com/brittnm610 NEW STOCK MOE AMAZON STORE UP AND RUNNING: https://www.amazon.com/shop/stockmoe This is all about getting the best penny stocks to buy now 2020 for November. It is a good time to look at some big penny stocks that are moving and see if there is a way to make a quick profit off of them or if there is a long term play there. There are many penny stocks out there, but most end up at zero eventually . Finding the best penny stocks to buy now is not an easy task. The first of the best penny stocks to buy now is one that I feel has some upward pressure that gives us a chance to make a few dollars. I am not sure how it will go, but this best penny stock opportunity helps us moving forward. It is interesting to see all of this. In looking at the top penny stocks to buy now, there are a few opportunities out there to invest in. The penny stocks 2020 list I made in this video helps to identity these penny stocks. There are a few out there that can work our way, but we need to be careful. These are very volatile and should be handled with care. These are some good penny stocks to watch for 2020 and 2021. These are the best penny stocks to buy now 2020 and not the only ones though. There are a few other opportunities out there for us to consider. These top stocks can go bad very quickly if the market turns south. I still see these as an option for stocks to buy now in my mind. These are great penny stocks for beginners that will get them in with a chance at profit. These are high risk and should be traded knowing that. If you are looking for cheap penny stocks, these best penny stocks to buy now fit the bill. There are many penny stocks to look at and I am sure there are probably many more that could outperform these penny stocks, but it gives you an idea of how I look for a penny stock to invest in. These are the best stocks to buy now and possibly in the future if you are looking for extreme risk and possible massive profits. There is always a chance of losing everything when buying one of the best penny stocks to buy now. These penny stocks 2020 are what I think will have the most action. In summation, the best penny stocks to buy 2020 November edition is all about giving you the opportunity to make massive amounts of money or loss massive amounts of money investing in the top penny stocks to buy now. If you are looking for penny stocks to watch or are investing in penny stocks for the long term, then be aware of the dangers. These can be the best stocks to buy now or the top stocks to buy now if they end up turning their business around. What stocks to buy now is a good question to always ask yourself. These best penny stocks to buy now help to answer that. ARK had bought NNDM stock price and added it…are they still buying NNDM? NNDM should definitely be in the penny stocks to watch list, if you have one. 🙂 Stock Moe’s content is for entertainment only. In no event will Stock Moe be liable for any loss or damage including, without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of, or in connection with, the use of Stock Moe content on YouTube, Patreon, and Discord. Stock Moe is no longer a licensed broker/financial planner. All financial decisions made by the viewer should be done after talking with a licensed professional. Everything on the Stock Moe channel is for entertainment only. Stock Moe’s video content may change over time, or become outdated or invalid. Stock Moe reserves the right to change his opinions and entertainment content at any time. I also have affiliate links in this description that I can earn money off of to help support the channel. Thank you from Stock Moe. #stocks#pennystocks#pennystock
Life in the era of COVID-19 is certainly unlike anything the vast majority of us have experienced in our lifetime. The last time the world faced a pandemic of this magnitude, the year was 1918. People around the globe struggled to combat a new foe in the form of a flu pandemic which washed over the world’s population over the course of two years.
Today, we are fortunate to have many more tools to study and manage the coronavirus. We are learning more each day, which will hopefully lead to a faster resolution this time around. But there is one factor of our current situation that feels quite familiar—that has returned cyclically time after time over the course of my career: the corresponding stock market storm we’re seeing. That isn’t new—and it isn’t a once-in-a-lifetime event.
The Great Financial Crisis. The dot-com bubble. Black Monday. Through each of them, I’ve fielded calls and visits from clients who worried that everything was on the line. But just as proper gear and a safe place to hunker down can protect one even in the worst of storms, so can a solid investment plan. Because my clients and I had prepared for circumstances like the ones we faced, they were able to make it through—reaching a period of sunny skies with much of what they had worked so hard to earn intact.
What can you do to weather a stock market storm? Here are a handful of strategies to help ensure your safety even in an economic downpour.
Harness the power of dispassion
When the market outlook is good, people tend to coast, letting their investments enjoy the ride. But when it seems as if trouble is brewing, they begin watching the market—and their accounts—like a hawk, panicking at the slightest provocation.
Unfortunately, that panic can lead to poor choices and less-than-stellar results.
The best thing you can do when the clouds roll in is harness the power of dispassion, understanding that if you’ve put the proper safeguards in place, a little wind and precipitation won’t blow the whole house down. Doing so will protect you from unnecessary losses and missed opportunities when the market rebounds.
Let diversity work for you
The benefits of diversity extend to so many areas of our lives—and the way we allocate and manage our money is no exception. Ensuring a diversity of assets helps you avoid placing all of your eggs in that proverbial basket. And though you may have been counseled about growth versus value stocks, diversifying across different market sectors and a variety of bond types is important. It’s really about building a portfolio tailored to your unique circumstances—whatever they may be.
A good advisor will curate a mix of holdings that will withstand market trials and tribulations and ensure you have the funds necessary to cover the cost of any upcoming life events—from your daughter’s wedding to a grandchild’s college tuition, and even an extensive home renovation. And they will institute a sound plan for tomorrow, whether that entails traveling the world, long-term care for a disabled spouse, a cross-country move, or all of the above. Most important, though, is that your diversification plan is specific to you.
Depend on someone you trust
When it comes to navigating your investments, you can certainly go it alone. Many people do—to varying degrees of success. But you can’t underestimate the power of a good advisor. What does that entail? Someone who moves beyond the conventional, with the experience and know-how to steer your ship through the choppiest of waters based on what they have learned in previous bad weather patches. It’s someone who will take into account your individual circumstances, crafting a strategy meant to fulfill your needs—and who considers not just what you must have to live comfortably, but also what you want.
That’s why I always ask my clients not only what their expenses look like—current and expected—but also what peace of mind looks like to them, and what they would do with their lives if money were no object. Those three inquiries help me compose a complete picture of the individual I’m working with, so I can build a plan that will weather whatever comes their way.
Diversification does not assure a profit or protect against loss in declining markets, and diversification cannot guarantee that any objective or goal will be achieved.Follow me on LinkedIn. Check out my website.
Debra Brede had a different idea in mind when she founded her investment management firm in 1989. A decade of industry experience made her realize that the needs of individual clients weren’t always best served by the typical Wall Street business model, where a firm sells its products to meet its sales goals. At the firm that bears her name, the individual needs of each client would be the primary focus. Today, D.K. Brede Investment Management Company delivers investment management services to corporations, municipalities, retirement plans, charitable trusts, and high-net-worth individuals based on the principle that every recommendation made is dependent solely on a client’s individual needs, as determined personally by Debra Brede herself. Debra is now a frequent media commentator on investment-related topics and is recognizable to tens of thousands of CNBC and Fox Business news viewers around the world. She’s also been featured in the Wall Street Journal, The New York Times, Businessweek, Financial Times, Reuters, Bloomberg, Forbes, and Kiplinger’s Personal Finance. Securities and advisory services offered through Commonwealth Financial Network, Member FINRA/SIPC, a Registered Investment Adviser.
Sometimes the biggest reason the stock market or certain stocks experience a severe decline in price is because they first experienced a massive rise in price.
Trees don’t grow to the sky. The pandemic has changed the way we view the many previously held ways of doing things, which has led to some insane gains in certain stocks that have been able to capitalize.
Many of those pandemic winners finally took a breather in recent weeks. Overstock has crashed more than 44% after rising more than 2,000% since the bottom in March. Wayfair is down more than 25% after rising 1,000% since March 23rd. Zoom fell more than 23%. DocuSign is off more 26% from its recent highs.
It’s possible these stocks have gotten ahead of themselves. Maybe people have overreacted about how things will look in a post-pandemic world. But let’s assume these companies were not only in the right place at the right time, but end up becoming some of the biggest stocks from here on out.
Even if these companies live up to their now lofty expectations and their stocks end up being grand slam investments, it’s not going to be a straight line up and to the right. These companies could become some of the most successful stocks of the next few decades and they will still crash spectacularly at some point.
This is the way it has to be for even the best of stocks because it’s impossible for expectations to stay in line with reality when you have uber-successful companies.
Let’s take a little stroll down drawdown memory lane to see how some of the most successful companies, brands and stocks in history have done over their life as a public company.
Apple is up almost 120,000% (19.5% annualized) since the early 1980s. Yet the stock has fallen more than 75% on three different occasions and has been cut in half more times than you could count on one hand.
Facebook is up more than 600% (27% annualized) since its IPO in 2012. The stock has endured three separate declines of 30% or more since then including a 53% crash immediately after going public.
Netflix is up more than 43,000% (39% annualized) since 2002. The stock of the streaming giant has fallen 50% or worse four times including two 75% or worse crashes.
Microsoft is up nearly 350,000% (27% annualized) since the mid-1980s. It was, however, in a drawdown for nearly 15 years following the bursting of the dot-com bubble, which saw a price decline of 75% from peak-to-trough.
Amazon is everyone’s favorite “If you would have put $10k in at the IPO…” stock for good reason. It’s up almost 170,000% (38% annualized) since 1997. The worst crash in the company’s stock was a plunge of almost 95%. There have been multiple 30% slides since then.
Walmart went public in the early-1970s. In close to five decades its stock is up more than 321,000% (19% annualized). It has eight corrections of 30% or worse in that time along with an underwater run in price from 2000 to 2012.
McDonald’s is up 31,000% (13% annualized) since the early-1970s. There have been two crashes in excess of 65% for the golden arches in that time.
Nike is up almost 100,000% (19% annualized) since the early-1980s. Phil Knight’s brainchild has seen drops of 75%, 62% and 48%.
You get the point.
I don’t know if these work from home or workout from home stocks will end up being as successful as these companies. Probably not, but I suppose anything is possible.
Yet even if these up and coming corporations do become some of the more successful stocks in the world from here on out, they will almost certainly experience one or more enormous crashes to get there.
This is what happens to successful companies and successful stocks.
They have to crash because expectations get out of whack, company leadership has a misstep or an unforeseen event causes a severe disruption to the business.
If you want to earn big returns in the stock market, expect to live with big losses to get there.
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