Top 10 of Fortune 500 from 1995

[Jurgis]

In http://www.cornerofberkshireandfairfax.ca/forum/events/boston-area-meetup-september-19th-2015-in-burlington/

TREVNI suggested the following exercise:

 

Topic #1: Look at the companies that were in the top 10 on the Fortune 500 twenty years ago (1995).  Why did the ones on top stay there?; Why did the ones fall off falter? What can we learn from this? Can we also learn some lessons from where the ones on top today came from?

 

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Fortune 500 list by year: http://archive.fortune.com/magazines/fortune/fortune500_archive/full/1995/

 

Here's my writeup on the topic. Not edited, so it's quite scattershot:

 

Fortune 500 list from 1995:

Tough to think as if I were in 1995, so some of this is Monday-morning quarterbacking, but:

I would have thought that XOM, WMT, T, GE would stay in top 10 for 20 years.

I would have thought that GM, F, Sears would fall out of top 10.

I don't have opinion about Altria.

Not sure what I would have thought about IBM.

(Not sure why Mobil is in the list... anyway, see XOM).

 

Looking at current list, I see I would have been wrong about GM and F (though GM went through BK, so staying in top 10 is not really a win...).

Would have been right about XOM (joined by CVX and PSX), WMT, GE.

 

WMT would have been a great investment in 1995

GE would have been OK (great if you sold in glory days)

XOM - OK

IBM - would have been great return

 

Looking at top 10 from year 2015, I'll predict:

When I did this exercise, I doubted that any of the top 10 will stay in top 10 in next 20 years...

After thinking about it more, some companies might stay.

Here's my initial reaction and later reaction:

Oil will play much lesser role in 20 years. Still XOM may survive in top 10. Later reaction: mega oil(s) might still be in top 10.

WMT has Amazon'ication risk. Later reaction: WMT may stay in top 10.

BRK has Buffett risk - I don't subscribe to BRK-after-Buffett rosy dream. Later reaction: unchanged.

Apple has product change risk. Later reaction: unchanged.

GM/F continue to have both "other carmaker" and new carmaker risk. Later reaction: unchanged.

GE - has who-the-heck-knows-what-they-gonna-do risk. Though perhaps they have the highest chance to remain in top 10. Later reaction: mostly unchanged.

PSX - a bit similar to GE - it's a new spinoff

CVS - I think it's very likely gonna be gone.

 

Looking at 11-20, I'd say VZ and UNH have a large chance to get into top 10, but they also can be sidelined.

 

Reordering current companies by market cap to get top 10 by market cap, I think that:

Google, WFC, JNJ and GE may survive in top 10 by market cap.

 

Predictions are tough, especially about the future.

 

Amazing thing looking at 1995 list is: 5/10 remained in top 10 after 20 years. Pretty much all 10 did not change businesses radically. Only 1 (Sears) is irrelevant now. 1 (GM) went through BK. The inertia is quite amazing for 20th-21st century.