(p. B5) . . . , consider the history of all the companies that have ranked No. 1 by market size. It’s full of surprises.
. . .
Hendrik Bessembinder and Goeun Choi, finance researchers at Arizona State University, calculate that the largest company in the U.S. clung to that spot for an average of 20 months from the late 1920s through the late 1950s—although it was nearly always either AT&T or GM.
From the 1960s through the end of the 1990s, the top company held the No. 1 position for an average of 12 months. From 2000 through mid-2018, the average tenure at the top was 15 months.
Over the past month, Apple, Microsoft and Amazon, all with market values of $700 billion or more, have each been No. 1 for several days at a time.
. . .
The single largest stock has made up about 3% of total U.S. market capitalization for the past 20 years, according to Savina Rizova, co-head of research at Dimensional Fund Advisors, an investment firm in Austin, Texas, that manages $517 billion. That’s down from the earlier average, since the late 1920s, of nearly 6%.
. . .
All in all, Amazon’s ascendancy is a reminder not of how new this era is but how old the dominance by big companies is. In some ways, these are the good old days: The top stocks account for less of the total market, and the giants don’t appear to be much easier—or harder—to topple than they used to be.
For the full commentary, see:
(Note: ellipses added.)
(Note: the online version of the commentary has the date Jan. 11, 2019, and has the title ” THE INTELLIGENT INVESTOR; What Amazon’s Rise to No. 1 Says About the Stock Market.”)