Investors will always be on the quest for a stock market formula that guarantees outperformance. Sadly, all observed phenomena in the stock market have a common flaw: reversion to the mean.
As more investors learn "the formula," the formula becomes less effective until it delivers average returns. Not to mention that investing on the premise of a secret formula is, for lack of a better word, stupid. Do your homework.
Nevertheless, it is human nature to seek above-average results from below-average effort. To that end, you might be interested in the following observation: Alphabet stocks (stocks with a single-letter ticker symbol) have crushed the broader stock market since the March 2009 lows.If you tally the investment returns of the 19 single-letter stocks in existence from March 9, 2009, to Nov. 30, 2011 (Pandora (P) and Zillow (Z) both came to market in 2011, while Quest Communications -- formerly "Q" -- was absorbed into CenturyLink (CTL) in April 2011), you're looking at a 149% gain with dividends reinvested. Comparatively, the SPDR S&P 500 ETF (SPY) delivered a 94% return (dividends reinvested). So, what are these alphabet stocks -- and will they outperform again?
- Agilent Technologies (A)
- Barnes Group (B)
- Citigroup (C)
- Dominion Resources (D)
- Eni SpA (E)
- Ford (F)
- Genpact (G)
- Hyatt Hotels (H)
- Kellogg (K)
- Loews (L)
- Macy's (M)
- NetSuite (N)
- Realty Income Corporation (O)
- Pandora (P)
- Ryder System (R)
- Sprint Nextel (S)
- AT&T (T)
- Visa (V)
- U.S. Steel (X)
- Allegheny (Y)
- Zillow (Z)
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