
CHA PTER 1: Growth Is Everywhere6
The next 25% of companies delivered 15% shareholder returns per
year. Not bad at all! Note that the companies that delivered higher
shareholder returns also experienced higher revenue growth. So this is
Lesson #1—the stock market demands growth.
Lesson #2 can be gleaned by observing that the companies in the top
two quartiles of shareholder returns delivered higher returns to their
shareholders than the cost of the capital given to them by their share-
holders. That is what we call “good growth.”
The bottom two quartiles don’t do as well. The third quartile delivered
11% shareholder ...