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  • The Nifty Fifty - Joe Kusnan's Blog

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    Pradeep Raghunathan
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    The blog post discusses "The Nifty Fifty", a collection of growth stocks in the late 1960s-early 1970s that were seen as "can't miss" investments. At their peak in 1972, the stocks had reached very high price-to-earnings ratios of around 55. However, when the 1974 bear market hit, many of the stocks lost 2/3 or more of their value. The lesson is that when the consensus is overwhelmingly certain about an investment, it's often wrong. Some Nifty Fifty stocks like Coca-Cola and McDonald's have since rebounded to become very strong long-term performers, up 50-75 fold or more since 1982.

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    The blog post discusses "The Nifty Fifty", a collection of growth stocks in the late 1960s-early 1970s that were seen as "can't miss" investments. At their peak in 1972, the stocks had reached very high price-to-earnings ratios of around 55. However, when the 1974 bear market hit, many of the stocks lost 2/3 or more of their value. The lesson is that when the consensus is overwhelmingly certain about an investment, it's often wrong. Some Nifty Fifty stocks like Coca-Cola and McDonald's have since rebounded to become very strong long-term performers, up 50-75 fold or more since 1982.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
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    219 views2 pages

    The Nifty Fifty - Joe Kusnan's Blog

    Uploaded by

    Pradeep Raghunathan
    The blog post discusses "The Nifty Fifty", a collection of growth stocks in the late 1960s-early 1970s that were seen as "can't miss" investments. At their peak in 1972, the stocks had reached very high price-to-earnings ratios of around 55. However, when the 1974 bear market hit, many of the stocks lost 2/3 or more of their value. The lesson is that when the consensus is overwhelmingly certain about an investment, it's often wrong. Some Nifty Fifty stocks like Coca-Cola and McDonald's have since rebounded to become very strong long-term performers, up 50-75 fold or more since 1982.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
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    2/26/14

    The Nifty Fifty - Joe Kusnan's Blog

    Joe Kusnan's Blog


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    fe b 2 5 th

    The Nifty Fifty


    The Nifty Fifty was a collection of one-decision, cant miss growth stocks that epitomized the Go-Go Years of the stock market in the late 1960s and early 1970s. At its peak in 1972, the Nifty Fifty hit a P/E ratio of 55. When the 1974 bear market arrived, they were taken out and shot. Polaroid fell 90%. Avon Products 85%. Coca-Cola lost two-thirds. What is the lesson of the Nifty Fifty? When everybody is certain of something, everybody is usually wrong. Thats why the stock market is such a tricky game. Real success requires acting against the trend easier said than done. Note the valuations of some of these stocks in 1982 compared to 1972. Coca-Cola at 8x earnings. McDonalds 9x earnings. Coca-Cola is up at least 50 fold since then. McDonaldss at least 75 fold. It just wasnt bottom fishing. The best performing Nifty Fifty stock during this period WalMart is up over 220 fold. Not bad. A list of the Nifty Fifty and where they stood 10 years later in 1982, right at the cusp of the Great Bull Market:

    I am a New York area based hedge fund and private equity investor. I also participate in angel/early-stage investing and principal deals. I write about history, economics, finance, technology, education and philanthropy. Welcome to my personal blog.

    What I Am Reading (Click Here) Favorite Posts: What I Am Doing in the Market (An Update) Office Hours with Warren Buffett Do Hedge Fund Fees Matter? Seth Klarman What I am Doing in the Market Charlie Munger's Last Meeting Richard Rainwater Sam Zell How to Be A Really Good Client

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    An Endowment CIO's Perspective Do You Want to Be a Public Pension CIO? Customer Loyalty as an Investment Strategy Long Term Investing and the Losers Game How Will You Measure Your Life? Buffett, Sokol and

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    The Nifty Fifty - Joe Kusnan's Blog


    Greed Investment Principles Hedge Fund Crowding Taking Classes at Harvard, Online Should Hedge Funds Swing for the Fences? Some Favorite Investment Books Hiring a Money Manager Signs of the Next Hedge Fund Bubble Buffett on Hedge Fund Fees Mutual Fund Super Party Extravaganza Some Advice on Career Advice Does the World Need Another Hedge Fund?" Hedge Funds: All Reward, No Risk Why I Write (Blog)

    Powered by Tu m bl r. Th em ed h acked from Sm aran Day al 's ori gi n al m od of Bard an d Li tewi re. A l l ori gi n al con ten ts copy ri gh t 2013 by Joseph Ku sn an an d l i cen sed u n der th e Creati v e Com m on s A ttri bu ti on 3.0 U.S. Li cen se except th at wh i ch i s qu oted from el sewh ere or attri bu ted to oth ers. In sh ort, y ou m ay reprodu ce, rebl og, an d m odi fy m y con ten t, bu t y ou m u st prov i de proper attri bu ti on .

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