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TWEEDY, BROWNE COMPANY L.P.
What Has Worked in Investing
(continued from preceding
page)
Larger Returns from Small Capitalization Stocks
Rolf Banz ranked all New York Stock Exchange listed companies according to market capitalization each year from 1926 through 1980 sorted the companies into quintiles, and measured the annual investment returns, on a market capitalization weighted basis, of each quintile. The results are shown below in Table 28:
Table 28:
Total Annual Returns on NYSE Stocks, 1926 - 1980, Sorted into Quintiles According to Market Capitalization
Quintile
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Compound Annual Return Value of $1 invested on 12/31/25 at end of l980 |
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Marc Reinganum, in "Portfolio Strategies Based on Market Capitalization", The Journal of Portfolio Management, Winter, 1983, studied the investment returns of all stocks listed on the New York and American Stock Exchanges from 1963 through 1980. All companies listed on the two stock exchanges were ranked according to market capitalization and sorted into deciles at the beginning of each year from 1963 through 1980. Table 29 shows the mean average annual returns, not the compound rates of return, for each of the ten market capitalization groups, as well as the cumulative value of $1 invested in each group from 1963 through 1980, and descriptive information concerning each decile.
Page 34 of 42
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28 | 29 | 30 | 31 | 32 | 33 | 34 | 35 | 36 | 37 | 38 | 39 | 40 | 41 | 42
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