Author: mungofitch

Subject: Re: A simple industry screen

Date: 10/15/2021

Recommendations: 18

A follow up on a follow up. September last year I posted: Medical devices have remained a long term good bet. ... From 2011 to August this year, an equally weighted portfolio of those two industries has beat the S&P 500 by a quite remarkable 4.7%/year before friction. ... If you stick to the 20 stocks with the highest sales growth, it gets better. I used the sum of the 1-year and 5-year annualized rates of growth of sales per share... This beat the S&P 500 by 10.0%/year, after 0.4% friction... FWIW, subsequent 13 months of that exact same strategy, 20 stocks monthly after friction: CAGR 47.3%, versus S&P at 33.5%. This has been a year that it has been VERY hard to beat the S&P. It`s hard to overtake a rocket ship. And yet...medical devices have again done very well. They usually do. Other than the risk inherent in a one-industry strategy, it`s a fantastic approach. Keeps on ticking. Though with a history like this, it`s hard to see industry concentration as a big risk. Maybe not 100% of a portfolio, but maybe a chunk... If you`re going hunting for penguins, look in the Antarctic. If you`re going looking for high performing stocks, look in high performing industries? Jim