Price declines.
Expect large price declines over short periods of time, even for the best businesses.
Bessembinder (2020) on the 100 best stocks since 1950:
- Best Decade: Average loss -32.5% over 10 months.
- Preceding Decade: Average loss -52% over 22 months.
Expect large price declines over short periods of time, even for the best businesses.
Bessembinder (2020) on the 100 best stocks since 1950:
- Best Decade: Average loss -32.5% over 10 months.
- Preceding Decade: Average loss -52% over 22 months.
Extreme Stock Market Performers, Part I: Expect Some Drawdowns Hendrik Bessembinder July 2020
bailliegifford.com/literature-lib…
bailliegifford.com/literature-lib…
Similarly, the “Top 200” firms experienced an average -50% drawdowns (i.e. price decline from historical highs).
Extreme Stock Market Performers, Part III: What are their Observable Characteristics? Hendrik Bessembinder* July 2020
bailliegifford.com/literature-lib…
bailliegifford.com/literature-lib…
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