Bests & Worsts Reviews from Amazon

"Good to Great" introduces readers to the concept of an enduring great company, one that sustains tremendous growth for at least 15 years from the so called "turning point". Published in 2001, the book gives us a great opportunity to analyze how much endurance there is in a great enduring company. Since many of the graphs in the book end in 1998, let's see how the eleven example companies listed in the book did in the next 15 years, from 1998 to 2013. If a convinced reader of the book bought $1 worth of stock of each company back in 1998, the total return on the portfolio in 2013 would be $19.72. In comparison, the Dow Jones went from 8,000 to 15,000, so the return on investment of $11 in general market would be $20.62. It turns out, on average, the "great enduring companies" performed slightly worse than general market in the next 15 years after their big sustained successes. After the author's praise to the great management teams at the companies which target for sustained long-term growth and build a lasting corporate culture to support the growth, these results are disappointing. In the timelines presented in book, the same portfolio does 8x better than the general market, not 5% worse. Conclusion: The book is well-written and full of interesting notions and quotes. But its main value today is seeing what happened next to superstar companies scientifically and elaborately picked as examples by a group led by a Stanford scholar. There is no way around a feeling that even these highly educated individuals fell under the spell of success and started to find patterns and laws where there were none. One thing is clear though - the subsequent failures of the great enduring companies can be explained in another book, based on an even better scientific study. --- Data I have put together a list of company name, stock price in 1998, stock price in 2013 and calculated returns on investing $1 in the companies' stock for that period. For companies that went under, I assumed the investor held on the stock until it fell to $1. Abbott Laboratories $21 $36 $1.71 nyse:abt Circuit City $18 $1 $0.05 nyse:cc Delisted. Filed for bankruptcy on November 10, 2008. Fannie Mae $58 $1 $0.02 nyse:fnma Delisted. Mismanagement of the institution is widely cited as one of causes of US subprime mortgages crisis that shook the world economy in 2008. The government bailout of Fannie Mae and Freddie Mac is estimated to cost US taxpayers $224-360 billion in total, with over $150 billion already provided. Gillette $100 $78 $0.78 nyse:g, nyse:pg Gillette was acquired by Procter & Gamble in 2005 for $57B in stock deal. The stock prices of the two companies were roughly equal in 2005, at around $50. Kimberly-Clark $38 $100 $2.63 nyse:kmb Kroger $25 $34 $1.36 nyse:kr Nucor $9 $45 $5 nyse:nue Altria (Philip Morris) $10 $36 $3.6 nyse:mo Philip Morris International (nyse:pm) was spun off the Altria group in 2008. Its stock has gone from $51 in 2008 to to $92 in 2013. Pitney Bowes $54 $15 $0.28 nyse:pbi Walgreen $23 $50 $2.17 nyse:wag Wells Fargo $18 $38 $2.11 nyse:wfc ---