Depression Era Top Stocks Still Kicking - What's the Lesson?

There is a very interesting article in smartmoney.com. Its lists the top returns from the bottom of the last depression in 1933 to 1954.

To my surprise, most companies are still with us today.

This is the list:

• Electric Boat and National Acme Co (today a unit of General Dynamics: GD) 55,000%
• International Paper & Power (same company - International Paper: IP) 30,503%
• Zenith Radio (part of LG) 24,146% • Douglas Aircraft (today Boeing: BA) 23,586%
• Minneapolis Honeywell Regulator (today Honeywell International: HON) 21,608%
• B.F. Goodrich (same name and same company: GR) 20,381%
• New York, Chicago & St. Louis RR (Norfolk Southern Corp: NSC) 18,174%
• Skelly Oil (Chevron: CVX) 16,578%
• Remington Rand (Unisys: UIS) 12,428%
• National Acme (Danaher: DHR) 10,351%
• BorgWarner (BWA) 10,317%
• American-Hawaiian Steamship (one of the few that has been delisted) 9,161%
• National Lead Co (same name -NL Industries: NL) 8,676%
• Food Machinery Corp (FMC Corp: FMC) 8,455%
• Melville Shoe Corp (today CVS: CVS) 7,791%

Note that, total return of 55,000% means 550 times on the upside!!

The lesson to be learned by the above numbers is that, no matter how bad things are and no matter what the market conditions are, there will always be stocks that can give a great return.

However, these companies have to make products and services that people need and want and must have a very competitive position in the market place (it also helps if you are a monopoly during wartime).

I don't know if we see stocks with similar returns in the years to come (I imagine we will see several), but I am sure that there will be many companies that will be a great buy and will produce great returns no matter how bad market conditions are.

There will always be potholes on the way and we will also make mistakes, but what matters is that investors need to be focused on companies and fundamentals all the time, because there will be companies that will produce great investor returns.

What stock can one buy that will make him rich? Well we don't know, but I'm sure that investors who do their homework and scout around will eventually come up with something.

Disclosure: no positions

Comments

[elliot_mllr:]

Mr. Kasarios:
What was the return for GE?

Jan 26 04:47 PM