Friday's WSJ article on the top 30-stocks over the last 30-years highlights why I focus on small cap companies (EVI)

On Friday, Jason Zweig of the WSJ, wrote a short post on the thirty best stocks over the last 30-years. The list had familiar and unfamiliar names, etc. but I was curious about the market values of the companies from 30-years ago vs today ...

	Market Capitalization
	Today	Calc 30-yrs ago
min	$86,307,178	$716,658
median	$14,907,501,057	$64,075,012
avg	$54,878,775,874	$191,013,641
max	$538,029,685,173	$1,706,513,845
sum	$1,591,484,500,360	$5,539,395,576
~ total market cap of S&P 500	$17,500,000,000,000	$2,000,000,000,000
as % of S&P 500 market cap	9.09%	0.28%
~S&P 500 price	$2,038	$212
max mkt cap as % of S&P mkt cap	3.07%	0.09%

... now this is a really bad back-of-the-envelope analysis. I simply backed out the 30-yr market caps using the current market cap and the total return figures. So any dividends paid would therefore be reflected as a reduction in market value, skewing all of these companies smaller (I know, I know ... but I wonder how far off I am?).

I also estimated the total market value of the S&P from 1985 based on the market value of the top-10 companies - $300B - and assumed it represented 15% of the total. If I had to guess, it was probably smaller.

Maybe I'll trek down to SIBL and use their Bloomberg terminal or perhaps someone with Factset or Bloomberg can post actual market values from 12/31/1985? All the data I used is pasted below.

What this imperfect data shows (and what the actual data might show) is that the companies with the highest total returns over the last 30-years were all pretty small companies 30-years ago.

Obviously, not all small companies grow 107,000% over 30-years as the first name on the list shows (I talked with a PM who has owned BCPC over the last 30-years and he said, "Obviously I did not know what it would return") but I am confident that the population of companies that will grow exponentially in the future will most likely come from the small cap universe today.

As a patient investor, I expect the companies I buy today I will hold for many many years. And in fact, one name I've written about on this blog is Envirostar (EVI), and it has a connection to Watsco, which is # 29 on this list.

The relatively new CEO of EVI - Henry Nahmad - is the nephew / son of the executives at Watsco who started rolling up companies in the fragmented HVAC distribution business in the 1970's. Henry is in the early stages of planning a similar endeavor in the fragmented commercial laundry equipment distribution space. One can only hope the apple does not fall far from the tree.

Here are some links I used for the data.
http://etfdb.com/history-of-the-s-and-p-500/#1985
http://marketcapitalizations.com/historical-data/total-market-cap-sp-500/

Here's the list from the WSJ in gsheets if anyone wants to look at it ...

		30-yr		marketcap	calc marketcap	actual marketcap
name	% return	CAGR	ticker	today	30-yrs ago	30-yrs ago ???
Balchem Corporation	107,099	26.18	BCPC	$1,780,657,337	$1,661,076
Home Depot Inc	67,795	24.27	HD	$160,083,194,883	$235,780,536
Amgen, Inc.	62,850	23.96	AMGN	$114,882,627,517	$182,498,217
Nike Inc	42,111	22.32	NKE	$105,393,852,389	$249,683,382
UnitedHealth Group Inc	40,503	22.16	UNH	$109,512,046,230	$269,714,174
Danaher Corporation	39,526	22.06	DHR	$59,282,842,285	$149,605,921
Altair	39,070	22.01	NA	NA	NA
Kansas City Southern	37,384	21.83	KSU	$7,784,655,487	$20,767,942
Jack Henry & Associates, Inc.	36,716	21.76	JKHY	$6,479,110,661	$17,598,627
Apple Inc.	31,428	21.13	AAPL	$537,945,105,324	$1,706,245,576
Altria Group Inc	28,432	20.72	MO	$119,269,087,150	$418,018,671
Paychex, Inc.	26,838	20.49	PAYX	$17,269,504,168	$64,108,338
HollyFrontier Corp	26,249	20.4	HFC	$6,383,434,190	$24,226,476
Monster Beverage Corporation	25,323	20.26	MNST	$27,373,551,700	$107,672,390
Stryker Corporation	21,329	19.57	SYK	$37,531,444,690	$175,143,239
Expeditors International of Washington	20,127	19.34	EXPD	$8,425,048,167	$41,652,485
Gentex Corporation	19,095	19.13	GNTX	$4,010,047,368	$20,891,104
CVB Financial Corp.	16,232	18.49	CVBF	$1,631,987,874	$9,992,578
Helen of Troy Limited	16,057	18.45	HELE	$2,530,920,774	$15,664,546
St. Jude Medical, Inc.	15,951	18.42	STJ	$14,896,194,389	$92,805,398
Medtronic PLC	15,820	18.39	MDT	$107,345,960,346	$674,283,671
Raymond James Financial, Inc.	14,588	18.07	RJF	$6,336,206,163	$43,138,659
Applied Materials, Inc.	14,082	17.93	AMAT	$20,096,658,964	$141,705,394
Cracker Barrel Old Country Store, Inc.	13,912	17.88	CBRL	$3,144,699,741	$22,442,904
Graco Inc.	13,593	17.79	GGG	$3,992,493,420	$29,157,186
SEI Investments Company	13,256	17.69	SEIC	$6,458,793,934	$48,358,745
Precision Castparts Corp.	13,152	17.66	PCP	$32,326,359,944	$243,935,707
Lowe's Companies, Inc.	13,030	17.62	LOW	$65,830,888,057	$501,377,670
Watsco Inc	12,176	17.36	WSO	$4,057,186,436	$33,049,743
Dynamic Materials Corporation	11,943	17.28	BOOM	$86,167,976	$715,503

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THIS IS NOT A SOLICITATION FOR BUSINESS OR A RECOMMENDATION TO BUY OR SELL SECURITIES.