Page 194 - Accelerating out of the Great Recession

APPENDIX A

ated, their leadership, and the decisions they made in response
to changing economic conditions. What quickly became clear
from this analysis is that the actions that separated winners
from losers are remarkably similar across different recessions.
Regardless of the recession, successful companies have followed
a combination of defensive and offensive strategies that are still
applicable today.
There are some inevitable biases in our selection of compa-
nies. First, and most obviously, the successful stories—particu-
larly those from the Great Depression—suffer from survivor
bias. Other companies may well have failed despite pursuing
similar courses of action—but it is the winners who get to write
the histories. Second, we have looked only at publicly listed
companies because of the challenges of uncovering the stories
of privately held ones. And third, even for publicly traded com-
panies, the trail back to the Great Depression often went cold.
But we also learned a valuable lesson: if you look back far
enough, you will find that many, if not most, modern strategies
have a strong historical ancestry.
Undertaking this kind of historical research necessitated the
use of a wide range of sources, and the kinds of sources varied
across the different historical periods. Developing a list of out-
performing companies in the Great Depression was especially
challenging because aggregate company data are not publicly
available as they are for later periods. Nevertheless, the Center
for Research in Security Prices at the University of Chicago has
managed to compile a database by poring over old newspa-
pers—and we were able to use this.
We also relied heavily on secondary historical literature and
newspaper articles to fill in some gaps in the story. Those sec-
ondary works are listed in the Bibliography.

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