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SA equity returns since 1900 trumps all other markets

Nation leads commodity-producing nations at top of list.

Through two world wars, the Great Depression and relentless redrawing of national boundaries since 1900, one group of countries gave investors the best stock returns.

Commodity-rich nations such as South Africa, Australia, the US and Canada enjoyed buffers against global turbulence because of their natural resources, but have developed their economies to rely on newer industries such as financials, technology and services, according to a joint study by Credit Suisse Group AG and the London Business School that scanned data going back 117 years.

The study shows that no single industry can provide a lasting competitive advantage. In 1900, more than 80% of the US stock-market’s value was in businesses such as railroads, which are today small or extinct. Nearly half of U.K. companies by value are in sectors that didn’t exist a century ago. Gold, once key to South Africa’s wealth, has waned in importance and the biggest Australian companies are now banks.

 

 

 

South African stocks have returned an average 7.2%, more than 2%age points above the global average and the most among 23 nations tracked by Credit Suisse and LBS. The nation is Africa’s biggest coal and iron-ore producer, and the world’s largest of platinum, manganese and ferrochrome.

“South Africa performed well partly because it is a resource rich country that has successfully developed into a broader diversified economy, and because it has made a peaceful transition from apartheid and remained stable,” according to researchers including Professor Paul Marsh of LBS.

“Because it has performed well in the past, however, this does not mean it will continue to be a world beating performer over the next century.”

  • Denmark tops the list for bond returns with an average 3.3%.
  • Equities were the best-performing asset in every country, showing over the long run there has been a reward for higher risk.
  • Investors lost all their money in Russia in 1917 and China in 1949 because of revolutions.
  • Japanese stocks, the world’s second-best equity performers from 1900 to 1939, lost 96% of their real value in World War II.

© 2017 Bloomberg

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The Zimbabwe stock exchange had really impressive returns too. In fact, they outperformed all of these markets by 1000’s of percent in a space of a few years.

Adjust your data for inflation and give us real returns.. anything else is misleading.

The article shows the real returns. I guess you will now proceed to question the inflation rate used.

it does NOT allow for currency movements!!!!!

Love the name Selcuk.

The phrase “more than 2%age points” kind of discredits this article. Mobile speak doesn’t really cut it in the business world.

Brilliant.

Real problem with 117 year old stats is that in 1994 we had radical transformation from doing the best possible thing to doing the blackest thing possible. Now re in a hairsbreadth of junk. All data before 1990/1994 is irrelevant.

Please explain why Professor Paul Marsh of LBS’s article is discredited? Is it because of a Bloomberg representative or because you have ‘inside information’ that contradicts the Professor!???
Or maybe it is because it is against your narrative/investment strategy where the overseas investment grass must always be greener??

Thank Goodness the ex-Saffa, “Bob in Sydney” is taking our advice and trawling Oz web-sites!?? or maybe this article contradicts his reasons for leaving SA? Never mind!???

What is the relevance of stock market returns since 1900? Academic interest, especially given SA’s troubles.

End of comments.

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