AAII: Are the Nifty 50 Still Nifty?

Since my previous post last weekend was about the AAII evaluating the 50 stocks from the 1960s and 70s that were considered gold, I thought it only appropriate to include their follow-up article to evaluate whether these same companies remain great bets 50 years later.  It appears that 29 of them may well be.  Hope everyone is enjoying the holiday weekend.

AAII Investor Update THURSDAY, MAY 23, 2019
	Dear Member, Back in the early 1970s, there was a group of stocks that institutional investors—and likely many individual investors—flocked to. Known as the “Nifty 50,” they were stocks viewed as being the preeminent stocks to own. University of Pennsylvania professor Jeremy Siegel described them as often being called “one-decision stocks: buy and never sell.” These stocks had several traits in common during the early 1970s. They were growing both earnings and dividends. Their market capitalizations were large. Their prospects were assumed to be bright. As such, investors ignored their valuations and happily paid significant premiums to own them. As those of you familiar with market history already know, the excitement about these stocks ended when their share prices plummeted during the 1973–1974 bear market.  Siegel wrote about the Nifty 50 stocks in the October 1998 AAII Journal. Some of you may have seen his article as part of our Top 40 series. In celebration of the AAII Journal’s 40th anniversary, we’re sharing 40 influential investment articles hand-picked from our archives. When we featured Siegel’s article last week, I mentioned to my colleague Wayne Thorp that it would be interesting to find out how many of these companies still exist and whether they are still nifty. So, I looked at all 50. Of the 50 companies listed by Siegel, 29 are still publicly traded while 21 are not. The ones that are publicly traded are listed in the table at the end of this commentary along with data about their growth rates and valuations. Continue Reading »