Everybody loves Charts!
Every so often, I’ll check in to show items floating around Wall Street circles and blogs.
Longer term trends in the markets and economy.
Extra details on what seems underappreciated or overhyped.
Link to some great explainers on the concepts.
**Everything as of 9/30/2024
Fiduciary money managers and social media influencers like @thewealthdad will usually argue it’s best for an average person to put money in a low-cost index fund like SPY or VOO and leave it alone. Let compounding do its thing. It’s very tough to argue with this logic under normal circumstances and it’s where most of my money is.
Well, it would be there —- if I wasn’t paying 2 daycares until 2026
But then you hear stats like 1 in 3 NVIDIA employees are now 8 figure millionaires because of previous ESOP agreements for managers.
It makes you wonder — if MOST stocks will not beat the market over time, that must mean at least a few do in any given year right? Fewer will over 5 years but are there any companies that beat the market handily over 10 years besides NVDA?
Can we find any?
Let’s see.
First the market over the past 10 years for reference - 2014-2024
S&P500 - “the Market”
The Chart: +210%
Narrative Behind The Growth -
The S&P500 has such a wide collection of companies under its banner that there is always a bull market somewhere driving gains. MAG7 more recently, pharma before that, energy before that. Despite two > 25% declines in the past decade, the CAGR over 10 years has still been a robust ~ 7.7% per year.
NVDA - NVIDIA The Reigning Champ
The Chart: + 31,111.62%
Narrative Behind The Growth -
It’s simply bonkers how quickly the company ballooned in profitability once A.I. models proved feasible and their chip design took off. NVIDIA is exhibiting several of Warren Buffet’s favorite factors in a company to own including a “moat” around its product base and fat margins due to price insensitive customers. Even before the release of ChatGPT, the company still saw a 8000% increase by 2022 as their chip designs improved.
DPZ - Domino’s Pizza
The Chart : + 596.65% in 10 years.
Narrative Behind The Growth -
Dominos pizza has somehow become such a successful growth story that consultants at top tier firms like PwC and McKinsey now throw around jargon like a “Pizza Tracker” tool for an I.T. System deployment.
Using good ol’fashioned business sense like listening to customer feedback, improving the product based on the feedback and honest PR campaigns, DPZ has outperformed not only the market but much of the MAG7 and other darlings.
LLY - Eli Lilly
The Chart : + 1733.04%
Narrative Behind The Growth -
Eli Lilly is quickly aspiring to be a trillion dollar company. It has invested heavily in innovative developments for both product line and manufacturing capabilities with those investments paying off as new trends solidify.
The weight loss drug Zepbound and the diabetes drug Mounjaro (also approved for weight loss) are driving LLY success. These new drugs are suddenly generating $4.3 billion in revenue in the past quarter alone and a total of $7 billion since they entered the market last November.
MNST - Monster Energy
The Chart : + 389.34%
Narrative Behind The Growth -
Monster Beverage is a holding company of subsidiaries that produce and manufacture energy drinks, alcohol, teas and coffees.
Management has been excellent at knowing their customers. They focus on action sports such as motocross, UFC, bullfighting and NASCAR instead of traditional TV or magazine ads.
Additionally leveraging a partnership with Coca-Cola for efficient distribution, the company ironically has been slow and steady upwards making their wild customers jumpy and overcaffeinated.
MKTX - Marketaxess
The Chart - + 308.74%
Narrative Behind The Growth -
MarketAxess is a major software provider for financial services and trading desks. Revenue growth has been driven by increased trading volumes across most of its credit product categories in recent years.
I have personally used several Marketaxess products and it’s clear they also hold what Warren Buffet would call a “Moat”. They only have 2-3 real competitors but their willingness and expectations of customers to be on multiple competitor platforms at the same time creates an effective oligopoly for the them to maintain revenues and power over trading customers.
Interested in being on the Trader Dads Podcast in 2025? Shoot me an email! I’d love to have subscribers on to sit for a discussion
TRADERDADS MAILBAG
Thoughts? Questions? Comments?
Reach out! Maybe I’ll do a full post on the topic or as a Q&A
traderdads@substack.com
