Ted Aronson, the veteran Philadelphia money manager, just pulled up a list of the most valuable US companies (based on share price), and compares it with a list from the end of 1978, when he was a "young pup" at the vanished Philadelphia brokerage Drexel Burnham Lambert (where Aronson shared the floor with ambitious youngsters like future junk-bond king Michael Milken, and briefly bossed future Comcast chief Brian L. Roberts).
Heading the list at the end of 1978 was IBM (now #3), AT&T (now #8, after spinning off Verizon and much more), Exxon (now #1), GM (dropped off the Top Ten), and General Electric (still #5).
Kodak and three oil companies have dropped off the list, replaced by Microsoft, Procter & Gamble, Warren Buffett's Berkshire Hathaway, and Wal-Mart. Chevron moved up the list, to #4, from tenth.
So what's changed in a generation? There's more tech stocks at the top of the list - but, as a group, Apple, IBM and Microsoft, combined, are now no bigger than IBM was, all by itself, as a percentage of the major US stocks, Aronson notes.
Bottom line: Turnover on the Top 10 list, over 33 years, was just 50%. That's a buy-and-hold message, and a warning to amateur traders and people who think today's trend will be their friend.
Posted: May 27, 2011 - 1:52 PM
Joseph N. DiStefano
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