The tobacco industry had an incredible run in the 20th century.
In its 2015 Global Investment Returns Yearbook, Credit Suisse published this comprehensive chart of US industry returns since 1900.
The red line represents the market, which climbed through the century. One dollar invested in the stock market 1900 would have grown to $US38,255 by the end of 2014, with an annualized return of 9.6%.
The coal industry is the big underperformer, turning $US1 into just over $US1,200 as newer and better technologies replaced it through the years.But at least coal survived: there are several industries that didn’t make the chart because they no longer exist.
And the tobacco industry turned $US1, incredibly, into more than $US6,000,000 in 100 years.
Of course, as Credit Suisse’s Elroy Dimson notes, this chart should not pass as an investing guide.
“Just as some countries were ‘lucky’ and others less fortunate, some industries prospered while others foundered,” Dimson wrote. “And just as we can infer little about future country returns from past returns, we can infer little about long-run future industry returns from their historical record.”