James Saft is a Reuters columnist. The opinions expressed are his own.
Tough times make dependable excellence even more valuable, which is why we just might see the rise of a new “Nifty Fifty” of elite shares.
During their heydey in the 1960s and early 1970s the Nifty Fifty were a group of U.S. large cap companies which managed a spectacular period of outperformance during a generally downbeat and low growth period.
Featuring such household names as IBM , Coca-Cola , Procter & Gamble and Disney , the Nifty Fifty delivered strong and dependable earnings and dividend growth during a period where those were in short supply.
They were rewarded by a fantastic run of outperformance and a dizzying re-rating, or expansion of price/earnings multiples, which eventually drove valuations well into bubble territory.
Similar to the 60s and 70s, the world is staring at structural problems that will make a recovery from the long secular bear market unlikely for quite a while.