Despised companies perform better

Posted by MarketWatch

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Opinion: It’s rare for admired firms to live up to expectations


“One can survive everything nowadays, except death, and live down anything, except a good reputation.”

So said Oscar Wilde, and though he wasn’t talking about investing, he could have been.

That’s because it’s difficult for the most admired companies to live up to their reputations. Companies that are least admired — if not downright despised — often perform better.

This is a good contrarian lesson to learn at any time, but especially at the beginning of the year — when a number of organizations — including CNN, Fortune, Harris Interactive, and 24/7 Wall Street, to name a few — release lists of companies that are most loved or hated.

Take the five companies that were at the top of Fortune magazine’s February 2013 list of most admired companies. Over the 12 months since then, their shares have produced an average return of 28%, more or less matching the return of the market as a whole….continued HERE