the nifty fifty - joe kusnan's blog
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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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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:
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7/22/2019 The Nifty Fifty - Joe Kusnan's Blog
http://slidepdf.com/reader/full/the-nifty-fifty-joe-kusnans-blog 2/2
2/26/14 The Nifty Fifty - Joe Kusnan's Blog
joekusnan.tumblr.com/post/77794625939/the-nifty-fifty 2/2
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A ll orig in al cont ent s copy ri gh t 2013 by Joseph Ku sn an an d li cen sed u nder the Creativ e Commons
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)