Business isn't easy...there are ups and downs to the economy and always business cycles to contend with.

There are good times and bad.

Even good companies fall on hard times and some eventually even go out of business.
We often see generations of family wealth lost when the composition of their portfolios turns out to be concentrated in 1 failing name.
As a result, many multi-generational fortunes have been squandered by sticking with the original investment that made the family wealthy.
Companies and their stocks have life cycles much as people do.:
They are born, grow to maturity, & successful ones have a prolonged period of ingenuity and productivity,
In lots of cases, the challenge is to avoid institutional sclerosis, excessive resistance to change.
Sometimes it's the opposite, and we see diversification into areas of business that have no real edge and others use acquisition strategies that end up failing.

All one has to do is look at the financial publications from just 20 years ago to see that many of the companies that were considered leaders in the stock market at that time - have stalled while others have crashed and burned.
Take for example General Electric (GE) once the powerhouse conglomerate of finance and industrialization. From the heady days of Jack Welch and 60 P/E multiples going into the new millennium, the company is now a shadow of its former power and prestige. The stock peaked in August of 2001 around $60.5 then began a year’s decline finding a low point by September of 2002 around $23.5 a share (P/E multiple contraction/star CEO having retired). More than a 60% decline. By October of 2007, it had recovered to around $42, but misfortune and mismanagement brought the company to its knees again. At the height of the financial panic/ great recession, the stock had plunged once more to a low in March 2009 below $6 a share. A 90% wipeout of value in 8 years. Since that low, over a decade ago, the shares hit a high of $33 in July 2016 only to once again fall back down to a low of $5.5 by May of 2020. The shares have since recovered riding the bull market, but the long-term investor of GE from 20 years ago, still has a long way to go to get back to just being made whole.

How many of the superstar companies of today will really be leaders 20 years from now?

Just Sayin

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