Big Winners and Big Losers: The 4 Secrets of Long-Term Business Success and Failure

Chapter 2. Companies That Hit and Missed The Mark

To choose the companies that were big winners and big losers, I used the stock market as an indicator of performance (See Appendix B, “Using the Stock Market as an Indicator of Performance,” for my reasons).^[1] For a company to be a big winner, its ten-, three-, and one-year average annual market return had to exceed the average of its industry, and its five-year average annual return had to be more than double the industry's average.^[2] Companies that missed the mark had the opposite characteristics. Their ten-, three-, and one-year average annual market returns were below their industry's average, and their five-year average annual return was less than half the industry average.

Using these criteria, ...