Glory Days Pass You By. Ask IBM and General Electric

John Dorfman

March 7, 2022 (Maple Hill Syndicate) – Bruce Springsteen sang that glory days will pass “in the wink of a young girl’s eye.”

I was thinking about that song a few days ago when I cleaned out some files and came upon a list of the stocks with the greatest market value as of June 15, 1990.

International Business Machines Corp. (IBM) headed the list. General Electric Co. (GE) was second. Today IBM has fallen to 72nd in market-value ranking, and GE is 19th.

Not for nothing did Jeff Bezos, the CEO of Inc. (AMZN) warn his employees against complacency a few years ago. “I predict one day Amazon will fail,” he said. “If you look at large companies, their lifespans tend to be 30-plus years, not a hundred-plus years.”

Here are some thoughts on the half dozen largest U.S. companies of 22 years ago.


I remember when IBM was associated with typewriters as well as computers. Its Selectric typewriters were marvels; now they’re museum pieces.

In the past decade, IBM shares have declined 32.8%. Over the same decade, the U.S. stock market (as measured by the Standard & Poor’s 500 Total Return Index) has advanced 285.3%.

Had you invested $1,000 ten years ago, you’d now have $672 with IBM, and $3,853 with an index fund.

Meanwhile, IBM’s debt has expanded to be 292% of stockholders’ equity. I prefer low-debt companies. I rarely buy a stock if this ratio exceeds 100%.

General Electric

GE’s stock-market performance has been almost the same as IBM’s in the past ten years – down 37.1%. The company’s latest turnaround plan calls for splitting itself into three companies, one for aviation, one for health care, and one for energy.

It plans to spin off health care in 2023 and energy in 2024, leaving the original company as an aviation play.

Will this plan work? I actually think it may. And some of the company’s directors apparently think so too. Directors Leslie Seidman and Paula Reynolds bought GE shares last year.

GE lost money in four of the past five years. According to its Altman Z-score (which measures the likelihood of bankruptcy, it is considered a “distressed” company. Any purchase would be a speculation, but not a bad one in my view.


Exxon Corp., now Exxon Mobil Corp. (XOM) ranked third in 1990, and has fallen to 15th. If you had invested $1,000 ten years ago you would have $979.40 now – roughly a quarter of what you’d have with an index fund.

The energy industry endured a hellish downturn in 2014-2020, and is now in the second year of a recovery. Exxon shares bottomed around $32 and are back up to $84.

I like the entire energy sector at the moment, and think Exxon is a decent buy. But I like other energy stocks more than this one.


The dividend yield of AT&T Inc. (T) is astoundingly high at 8.7%, but the company has increased its dividend gingerly in the past few years, probably because it’s already paying out three-quarters of its profit as dividends.

Had you held this stock for the past decade, your cumulative return would be a loss of 22.3%. The stock is cheap at about nine times recent earnings, but its return on invested capital has been consistently unimpressive. In market value, it’s now 48th.


Altria Group Inc. (MO) was known as Philip Morris until 2003. It changed names partly to reflect the fact that it had become a food company as well as a tobacco company, owning most of Kraft Foods. Kraft has since been spun off, and so have the international tobacco operations.

The company’s main brand is Marlboro. It also owns Skoal and part of Juul. Because cigarette users are steady and habitual users, the tobacco industry has the reputation of being safe in downturns. But I have a hunch that will be less true next time a recession hits.

Altria ranked fifth in market value back in 1990. Now it’s 84th, and its spinoff, Philip Morris International, ranks 50th.


Walmart Inc. (WMT) has fared better than most of the companies on this list – sixth back then, 13th now. In the past ten years it’s returned 138%, which is decent but only about half the gain on the S&P 500.

I’ve owned Walmart personally and for clients at times – mostly when I feel we’re headed for recession. But its profit margins are slender, given that much of its revenue comes from groceries and that it strives to be the lowest-price retailer.

Disclosure: I don’t own the stocks discussed in today’s column, personally or for clients.

John Dorfman is chairman of Dorfman Value Investments in Boston. He can be reached at He or his clients may own or trade stocks discussed in this column.

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