Compounding hindsight

A comprehensive study examining 29,078 publicly traded U.S. companies from December 1925 to December 2023 reveals a surprising finding: 51.6% of these companies resulted in losses for their investors. Despite this, the average return across all companies was 22,840%, largely driven by a small number of exceptional performers. Notably, 17 companies achieved total returns surpassing five million percent, equivalent to a 13.47% annual growth rate compounded over a century. Topping this list is Altria, with a cumulative return of an extraordinary 265,528,900%. To put this in perspective, a $10,000 investment in Altria would have soared to an impressive $26.5 billion. We conclude that successful stock-picking is extremely hard and that the power of compounding should never be underestimated.