Are You Looking for Better Returns on Your Investments in 2020? Consider Investing in the Baldrige Award Winners
The following case study is based on my own investment experience. As a former Baldrige award examiner, I decided in 1998 to "put my money where my mouth is" and create a self directed IRA composed of Baldrige award winning companies. My only regret, 21 years later, is that I didn't have more money to invest.
THE PROBLEM: How to invest better, in order to accomplish the “4M’s - Make More and More Money”, and create financial “cushion” for doing more good.
THE APPROACH: Each year, around the Christmas - New Year period, I search the list of winners of the U.S. Baldrige Performance Excellence Program (BPEP) and the state Baldrige Alliance Award Programs for publicly traded winning companies (listed below). I then buy shares of each, or their parent company. Hold those shares no matter what happens, including the occasional bankruptcy of a winning company. Kind of a "fire and forget" approach to portfolio management.
THE RESULT: If you had started buying stocks this way in 1998, purchasing the 33 award winning companies, your portfolio value would have grown Six-Fold over the past 21 years!
That's roughly two times better than the performance of either the S&P 500 or the Dow Jones Ind. Average indices over the same period. Purchase of the Baldrige winners over this period would have yielded an average annual return of about 9%, without any need for in-depth research on stock purchases (Baldrige examiners already did that for you, to grant the annual awards). Of course there are other ways to build high performing stock portfolios, but these can require a lot more time and effort than simply buying and holding Baldrige award winners.
Many of these award winning stocks also pay generous quarterly dividends. This can enough cash each year so you are ready to buy next year’s winners without investing additional funds.
A number of independent studies, available on the Web, confirm this approach. Some studies are based on just the BPEP, and some also consider other prestigious award programs like the Shingo Prize. If you decide to follow this approach, you may find your brokerage company contacting you to ask about “your secret” to great portfolio performance, as happens to me almost every year.
THE DETAILS:
BPEP winners are listed at https://www.nist.gov
Baldrige Alliance winners by state are available, with some effort, at https://www.baldrigealliance.org
THE PUBLICLY TRADED WINNERS:
To save you some work, here are the equity symbols and company names for the publicly traded winners (or their parent companies) since 1998. The newly added 2019 award winners are so indicated.
- 2019 - ACM - AECOM COM
- ALV - AUTOLIV INC
- AXL - AMERICAN AXLE
- BA - BOEING CO
- BAC - BANK OF AMERICA
- CAT - CATERPILLAR INC
- CMCSA - COMCAST CORP
- DAL - DELTA AIR LINES
- DE - DEERE & COMPANY
- 2019 - DVA - DAVITA INC.
- EMN - EASTMAN CHEMICAL CO
- FDX - FEDEX CORP
- GD - GENERAL DYNAMICS CORP
- GLW - CORNING INC
- GT - GOODYEAR TIRE
- HON - HONEYWELL INTERNATIONAL INC
- IBM - INTERNATIONAL BUS MACH
- LLY - ELI LILLY AND CO.
- MAR- MARRIOTT INTERNATIONAL INC
- MMM - 3M COMPANY
- MRK - MERCK & CO
- MSI - MOTOROLA SOLUTIONS INC
- 2019 - NHC - NATIONAL HEALTHCARE CORP
- 2019 - PCAR - PACCAR INC.
- RTN - RAYTHEON CO
- STM - ST MICROELECTRONICS
- T - AT&T INC
- TSN - TYSON FOODS INC
- 2019 - TVC - TENN VALLY AUTH.
- TXN - TEXAS INSTRUMENTS INC
- VZ - VERIZON COMMUNICATIONS
- 2019 - WTT - WIRELESS TELECOM GROUP
- XRX - XEROX HOLDINGS CORP
Best regards for great success!
As the investment pro’s like to say, the investor assumes all risks. No guarantees are offered with this advice, and past performance is no indicator of future results.
P.S. Your state's Baldrige Alliance program needs volunteer examiners every year, and would be glad to receive your application and provide you training. It's a "heavy lift", but a great learning experience for business leaders and performance excellence professionals.
Excellent case study, Steve! Keep up the good work. If you have a detailed paper on this topic, I would be interested to read. Madhav Phadke
Project Manager at GENEDGE
5 年Thanks Imre for your thoughts and encouragement.? I agree that it is probably "a bit of both" regarding awards won by excellent performing organizations. My own experience has been the delight of helping less than excellent organizations apply the BPEP criteria over several years. When senior leadership stayed focused, the result has been better allocation of improvement efforts and resources, leading to better performance in important areas. - Steve
Managing Director - IHC | Author | Adjunct Associate Professor - Deakin University | Associate Consultant - FromHereOn | Associate Partner - Capability | Partner-Representative - Systems Innovation
5 年Hi Steve Holcomb – great to see an article on this topic! I have been somewhat involved in the Australian version of the Baldrige Award (the pre-cursor to the Australian Business Excellence Framework) and see such Business Excellence Frameworks as being the most wholistic, systemic and systematic approach to enterprise performance management. Unfortunately, in Australia, these now have limited profile and understanding. I wrote an article on this same topic in 2016 (link here: https://www.ih-consulting.com.au/test/ or here: https://www.dhirubhai.net/pulse/business-excellence-frameworks-imre-hegedus/) and referenced some of the S&P 500 statistics I was aware of at the time. There was the perennial question of causality – do excellent organisation choose to undertake Business Excellence as a strategic approach or do Business Excellence Frameworks contribute to the performance of those organisations …a bit of both I would suggest. Anyway, I hope this encourages some inquisitive and positive discussion in the US, Australia and Europe on the topic…