Stock Returns for New Industries
November 17, 2008 - Big Ideas
Do new industries offer exceptionally good stock returns, whether through strong growth or investor exuberance? In their September 2008 paper entitled “Returns to Investors in Stocks in New Industries”, Gerald Dwyer Jr. and Cora Barnhart examine stock return distributions and summary statistics for the following major new industries in the U.S. over the periods of their initial development (15-23 years): personal computers, airlines, aircraft manufacturing, automobile manufacturing, railroads and telegraph. Using return data for the stocks of companies in the selected industries and contemporaneous market indexes, they conclude that: Keep Reading