What About Blue-Chip Stocks That Are Perpetually Expensive?

If, in 1999 and 2000, when Colgate-Palmolive, Hershey, and Brown-Forman were each trading for 30x profits, you decided to buy shares anyway, the results would look like this:

The Colgate shares would have compounded at 8.15% annually, turning a $10,000 investment into $30,200.

Shares of Hershey, despite even higher valuation compared to Colgate, would have compounded at 11.50% annually over that time frame, turning a $10,000 investment into $46,500.

Shares of Brown-Forman, the excellent alcohol company that almost no one outside of Louisville or the investor community has ever heard of, has compounded at 15.60% annually since that time, turning $10,000 into over $77,500.

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