Stocks Of Bad Companies Often Outperform Those Of Good Ones

According to a study by Deniz Anginer, a doctoral student in finance at Michigan's Ross School of Business, stocks of admired companies have lower returns, on average, than stocks of despised companies over the past quarter century. Anginer and colleagues Meir Statman of Santa Clara University and Kenneth Fisher of Fisher Investments Inc. found that during that time the mean annualized return of portfolios of despised companies was 17.5 percent nearly two percentage points higher than the portfolios of admired companies. Adjusting for differences favoring companies in higher-scoring industries, the margin is even greater (about 2.5 percentage points).