
The BW 50 is proving to be a reliable winner. For the third straight year, our list of the 50 hottest companies in the S&P 500 has outperformed the broad indexes of blue-chip stocks. From Mar. 1, 1999, through Mar. 1, 2000, the BW 50 class of 1999 racked up a 29.2% gain. Compare that with the S&P 500's 11.5% increase and the Dow Jones industrial average's 8.7%. Of course, no broad market index could touch the tech-laden Nasdaq composite over the past year. It skyrocketed 108.4%.
A historical analysis can be instructive. For instance, it shows that the BW 50, if calculated on a calendar-year basis, would have consistently outperformed the broader S&P 500 in all but two years since 1988, as the roaring bull market focused on growth strategies. But that could shift suddenly. By our calculation, the BW 50 would have trailed the S&P 500 in all but three of the 13 years from 1973 through 1985, when overall stock gains were far more erratic.
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