“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way.” — Charles Dickens, the famous opening quote from the 1859 book, A Tale of Two Cities.
Eerily, this quote sounds like it could have been written yesterday.
At one point, A Tale of Two Cities was cited as the best-selling novel of all time. Dickens grew up in poverty, leaving school as a young boy to work in a factory after his father went to debtors’ prison. Looking at his early life, most would never have predicted the impact he would eventually have.
Looking back over the past 10 years, for some investors, it was “the season of Light…the best of times.”
The top 5 performing stocks in the S&P 500 over the last 10 years were:
- Tesla (TSLA)
- MarketAxess Holdings (MKTX)
- Dexcom (DXCM)
- Domino’s Pizza (DPZ)
- Abiomed (ABMD)
Investing $10k into each company 10 years ago would have turned this combined $50,000 investment into over $2,800,000—a gain of 5,752%. It truly was “the best of times” for these investors.
Conversely, the 5 worst performing companies in the S&P 500 over the last 10 years:
- Apache (APA)
- NOV Holdings (NOV)
- Devon Energy (DVN)
- TechnipFMC (FTI)
- Marathon Oil (MRO)
Investing $10,000 into each of these companies would have turned the $50,000 investment into less than $12,000, losing $38,000—a whopping loss of -75% and a difference of over $2,838,000 in terminal wealth between these two investors. For these investors, “it was the worst of times.”
Different investors can experience wildly different returns. Investing can be extremely rewarding and horribly painful over the exact same time period.
-Paul R. Rossi, CFA