Some counterintuitive lessons.
The first time I was told Wall Street was “over” was in 1987 after the Dow’s apocalyptic 22% one-day crash. Of course the Internet was over in 2000. So was biotech. Wall Street was over again in 2008. So was New York as a global financial capital. Investors worried that biotech was over again in 2014 and 2015. Are you noticing a pattern?
We gullible humans fall into the same stupid trap time and again, forgetting how stunningly resilient an open economy is. None of those sectors were over, and if you want to see surprising evidence – and get a dose of reassurance in these economically depressing times – look at our new ranking of the 100 Fastest Growing Companies.
Surprise No. 1 is that the sector with the most companies on the list, 29 of them, is financials. Don’t call them Wall Street firms; almost none of them are anywhere near the southern tip of Manhattan. They’re booming by providing a wide range of financial services from all over the world. For example, Bank of the Ozarks (No. 69) lends to New York City builders. Noah Holdings, based in Shanghai, provides wealth management to rich customers. Its stock trades on the New York Stock Exchange – and by the way, the NYSE’s owner, Intercontinental Exchange, is No. 62 on our list.
Surprise No. 2 is that huge companies can still grow extremely fast – even in industries that were “over.” Ranking third on our list is Facebook, with revenue of almost $20 billion over the past four quarters. Even bigger is Gilead Sciences, No. 17 with revenue of almost $33 billion. A big biotech competitor, Biogen, ranks No. 73 with revenue of over $10 billion.
Surprise No. 3 is the ranking’s global scope, and particularly the growing presence of China. To be considered for this list, a company must be publicly traded on a U.S. stock exchange so we can get audited and consistent financial results for each one. (Several other criteria apply.) Our top company this year, Natural Health Trends, is California-based but gets 93% of its revenue from Hong Kong. No. 2 is Vipshop Holdings, an online fashion retailer based in Guangzhou. TAL Education (No. 11) is Beijing-based. AerCap Holdings (No. 13) is Irish, and JinkoSolar (No. 16) is Chinese. And those are just in the top 20. Within the U.S., these fast growers are also widely dispersed – though virtually all of them are in states on the country’s perimeter.
A powerful message in this year’s list is its reinforcement of Warren Buffett’s wisdom – that when a fundamentally strong company or sector or economy is down, it will most likely come back. It’s also a reminder that all kinds of businesses – young and old, big and small – hold the potential to grow fast, and that the power of entrepreneurial zeal and inspired management can emerge anywhere. At a time when most of the economic news seems to be downbeat, at least 100 companies apparently haven’t heard about it.