It has become an annual tradition here at Abnormal Returns to make a big stinking deal out of the release of the latest edition of the Credit Suisse Global Investment Yearbook. See posts from 2019, 2018, 2017, 2016, 2015, 2014, 2013 and 2012. Like last year, the yearbook is now only available online in a summary version.
For those of you not aware, the authors of this document, Elroy Dimson, Paul Marsh and Mike Staunton, are also the authors of the well-received Triumph of the Optimists: 101 Years of Global Investment Returns. So the 2020 Credit Suisse Global Investment Yearbook is an updated, but abbreviated, version of the book.*
I just wanted to highlight a couple of things from this year’s Global Investment Returns Yearbook. The first section made available in this year’s summary is all about ESG. They look at two big quesitons. The first is whether exclusionary ESG strategies which currently dominate have a return benefit or cost. The second thing they examine is what is the best way create both financial and non-financial returns by engaging with companies.
The next section takes a look at some really long term, return data. For example, did you know that of the US firms listed in 1900, over 80% of their value was in industries that are today small or extinct. In the UK that figure is some 65%. The shift in industries mirrors this change. In both the US and UK rail stocks made up 50% or more of the market. If nothing else today’s stock market is far more diverse.
The value of a document like the Global Investment Returns Yearbook isn’t that is some sort of roadmap for the returns. Instead it gives us a better sense for where we have been. Over the past couple of centuries a lot has happened, including two horrific World Wars, that have upended and reshuffled the global economy and financial markets.
*I am not including any charts from the yearbook this year. They all have a prominent copyright message attached. That being said, I get why Credit Suisse makes the full version of the book only available to clients, but I think they are making a mistake by restricting access. The global investment yearbook is a great service not only to investment professionals but to students as well. I think this a missed opportunity. Full stop.