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The “admired” portfolio (often referred to as growth stocks) contained the stocks with the highest Fortune ratings, and the “spurned” portfolio (often referred to as value stocks) contained the stocks with the lowest Fortune ratings. For example, the list of admired companies included The Walt Disney Company, UPS and Google. Spurned companies included Jet Blue, Bridgestone and Stanley Works. The results of the study are of no surprise to value investors. “Stocks of admired companies had lower returns, on average, than stocks of spurned companies.” Figure 3-5 shows the 16.12% annualized return of the spurned portfolio and the 13.81% annualized return of the admired portfolio over the 24-year, 9-month period. Why have value stocks delivered higher returns to their investors? The market perceives value companies to be riskier, Figure 3-5

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