Wisdom for Life

This week’s theme is on the concept that a company can be wildly successful running their specific business and (potentially) become the leader of their respective industry, and yet still not have better performance than the broader equity (stock) market.

This is part of our long-running effort to explain why we do not engage in stock picking for our clients, and why we do not recommend taking concentrated positions in individual equity holdings.

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Here are some great (and recent) examples of this phenomenon:

Netflix

• ​Netflix has definitely won “The Streaming Wars”, meaning they have become the preeminent streaming platform that the majority of people worldwide use. It doesn’t mean that HBO Max, Hulu, or Disney Plus don’t have large businesses in this space also, but Netflix has the most market share.

• An astounding 325 million people subscribe to Netflix globally. (And that doesn’t count the additional 7 billion people that have access to Netflix globally via password sharing. I’m kidding, of course. The number (probably) isn’t quite that high.)

• And yet, over the past 5 years, Netflix stock has grown 12.3% per year, and the S&P 500 Index has grown 14.16% annually. Source: Portfolio Visualizer as of 3/11/2026.

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Disney

• Along the same lines as Netflix, Disney‘s largest business unit (the theme parks) has become the best theme park business in the world. Per Disney, they have seven of the top ten most attended theme parks in the world, including Walt Disney World's Magic Kingdom Park, which has been the #1 attended theme park on earth for decades.

• But again, over the past 5 years, Disney stock has lost 10.5% per year while the S&P 500 index has grown 14.16% annually.

  • Put another way, $100,000 in Disney stock 5 years ago has shrunk to around $57,000 today. Source: Portfolio Visualizer as of 3/11/2026.

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McDonald’s

• Even though Subway still technically has more locations globally, McDonald’s is the largest fast food restaurant chain in the world by every meaningful metric: total sales, total profit, and per-location sales.

• Not to mention, Statista estimates that McDonald’s has the highest brand value of any restaurant worldwide, at over $40 billion.

• And still, over the past 5 years, McDonald’s stock has grown 13.01% per year while the S&P 500 index has grown 14.16% annually.

• It certainly has not done poorly over the past 5 years, but it still would leave you in a worse spot if you had invested your money in only McDonald’s stock vs. the broader market.

A company can do all the right things and perform better than any of its peers in its own industry or sector, but that doesn’t guarantee that it will translate into strong returns for investors.

The take-away is that diversifying your money across companies, industries, sectors, and geographies has proven to be the prudent decision.

A final thought

-My 3 year old, letting us know that she did not think I was capable of properly assisting her with setting up her craft time.

So, thank you for letting me advise you and serve you, as currently my 3-year-old thinks I’m not hitting the mark.

Thanks for reading,

Jack O'Connor, CFP®