Monday, March 13, 2006

The churn 

Here are the top ten companies (except for oil) in the US in 1959. How many of them are currently in the top ten?
1. AT&T
2. GM
3. DuPont
4. General Electric
5. Union Carbide
6. U.S. Steel
7. IBM
8. Sears, Roebuck
9. Aluminum Company of America
10. Bethlehem Steel

Answer: Only one, GE, which is #1. As
Business Week points out, the 1959 list was dominated by manufacturers; today's is dominated by service firms like Microsoft and WalMart and financial service firms. The churn is part of the economic process in every country, even China. If I was investing in China -- and I'm not, at least not actively -- would I want to buy their booming manufacturing sector or their still nascent services sector?