A Look at the #1 Equities in the S&P 500
What the Highest Performers Have in Common
By now, you likely know Marty Fridson as a bond expert par extraordinaire.
Since “the most well-known figure in the high-yield world” (according to Investor’s Digest) joined Porter & Co. in March 2023, he’s made 10 recommendations – and nine of them are in the green, resulting in an average portfolio return of 19%.
What’s more, Marty’s a real investment Renaissance man…
In addition to his distressed-bond prowess, he’s also authored six modern investment classics – including Financial Statement Analysis, which The Green Magazine calls “one of the most useful investment books ever,” and Unwarranted Intrusions, which The Boston Globe said should be short-listed for best business book of the decade – and edited many more.
Not to mention his light verse, which has appeared in publications ranging from Playbill and The New York Times to The Wall Street Journal – and now graces the beginning of each new issue of Distressed Investing.
And he’s also developed a proprietary, and extremely effective, method for picking outperforming stocks. (You’ll notice that three of his recommendations for Distressed Investing have been distressed equities.)
In 2023, Marty released an entire how-to book on this method: The Little Book of Picking Top Stocks, available on Amazon or wherever you buy your books. This title focuses on stocks that came in #1 for the year in total return within the S&P 500 and what caused them to achieve that distinction (spoiler alert: it’s not what most mainstream analysts think).
Last year, we released the first chapter of this book to readers with special permission – and this year, we’ve received rights to reveal details from a later chapter… the one investors really want to read.
This is the “how the pudding is made” chapter – the one that reveals Marty’s exact criteria for picking market-beating equities. He’ll also show a breakdown of his top picks between 2012 and 2021 and reveal how they fit into his statistical and qualitative framework.
You can download a PDF of the full chapter here. We hope you enjoy it.
Now – one note of clarification…
The winners listed in this chapter beat the S&P 500 between 2012 and 2021… and since then, the market climate has shifted much closer to recession territory. It’s now a more challenging environment for equities (as we recently noted in our “Naughty List” issue).
That’s not to say that some – or many – of these stocks won’t outperform again. In 2024, however, Marty sees just five companies that fit all four of his “Top Stocks” criteria. He discusses those equities in detail in this recent article for Barron’s (subscription required).
However, the “Picking Top Stocks” method works in any market environment – and we hope this special excerpt will entice you to pick up the rest of Marty’s book and use it this year and beyond.
Enjoy… and we’ll be back on Friday, January 12, with a regular issue of Big Secret and a new recommendation for paid-up subscribers. (Distressed Investing subscribers will get a new bond recommendation from Marty that day, as well!)
Happy New Year!
Porter & Co.