7/22/2019 The Nifty Fifty - Joe Kusnan's Blog

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Joe Kusnan's Blog

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

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

The Nifty Fifty

The Nifty Fifty was a collection of one-decision, “can’t miss” growth stocks

that epitomized the Go-Go Y ears of the stoc k market in the late 1960’s and

early 1970’s. 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 “everybod y” is certain of 

something, “everybody” is usually wrong. That’s 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. McDonald’s 9x earnings. Coca-Cola is up at least

50 fold since then. McDonalds’s at least 75 fold. It just wasn’t bottom

fishing. The best performing Nifty Fifty stock during this period— Wal-

Mart— is up over 220 fold. Not bad.

 A list of the Nifty Fifty and where they stood 10 y ears later in 1982, right at

the cusp of the Great Bull Market:

fe b25thTUE

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7/22/2019 The Nifty Fifty - Joe Kusnan's Blog

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2/26/14 The Nifty Fifty - Joe Kusnan's Blog

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 A ttr ib ut ion 3 .0 U.S. Li cen se except that wh ich i s quoted from elsewhere or attribu ted to others. In short,

 you m ay repr oduce, r ebl og, an d modif y m y con ten t, bu t you m us t prov ide pr oper at tr ibu ti on.

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)