The Best Performing Stocks Of All Time
A few stocks have outperformed and most stocks have underperformed
I thought this was an interesting paper by Hendrik Bessembinder, “Which U.S. Stocks Generated the Highest Long-Term Returns?”. I like oddball discussions like this. Below is the abstract:
This report describes compound return outcomes for the 29,078 publicly-listed common stocks contained in the CRSP database from December 1925 to December 2023. The majority (51.6%) of these stocks had negative cumulative returns. However, the investment performance of some stocks was remarkable. Seventeen stocks delivered cumulative returns greater than five million percent (or $50,000 per dollar initially invested), with the highest cumulative return of 265 million percent (or $2.65 million per dollar initially invested) accruing to long-term investors in Altria Group. Annualized compound returns to these top performers relatively were modest, averaging 13.47% across the top seventeen stocks, thereby affirming the importance of “time in the market.” The highest annualized compound return for any stock with at least 20 years of return data was 33.38%, earned by Nvidia shareholders.
Here is a link to the paper.
Below, find the top 30 stocks from the study.
Something to note is that Altria, the former Philip Morris USA, had the best return. Over a 98-year period, $1 invested in Altira in 1925 became $2,655,290, or a percent return of 265,528,900.62%!
Please note the compound returns per year. Understanding realistic returns is important. Note also that there are very few technology companies on the list. I think this is because technology is always advancing and turning over so quickly that today’s winners draw competition and are supplanted by new entrants.
Meb Faber interviewed the author on his podcast, and the discussion is interesting if you are curious about these types of things.