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If Charles Darwin was born again and invested in stocks, which shares would he have favored?
A new study speculates that based on his Theory of Evolution, which points out that only organisms that endlessly strive to change have a chance of survival, perhaps Darwin would have invested in companies that persistently seek new growth engines.
Titled "What if Darwin Invests in Stocks," issued by Woori Investment and Securities on Monday, a principle like natural selection is at work in the stock market as well. This principle can be called "market selection."
According to the principles of market selection, weak companies are excluded from the market, but businesses that survive end up getting stronger. The reason why powerful measures being implemented by governments around the world are failing to have solid effects is because they do not fit the principle of "market selection" and involve frequent artificial intervention by the government, the report claims.
As a key example, the report cites GE, which is the only one of the 30 original companies listed on the Dow Jones Industrial Average that has survived over 100 years after 1900. GE is known for its successful restructuring in the early 1980s, when CEO Jack Welch, then in his 40s, cut down the conglomerate's 150 business operations to 12.
In Korea, there is Samsung Electronics, which saw explosive growth after harnessing semiconductors as its new growth engine. There is also Shinsegae, which introduced the concept of superstores in Korea. And there is DC Chemical, which jumped into the production of solar energy components and ended up as the industry leader. The report cites them as cases of market success in Korea.
Lee Yun-hak, a researcher at Woori Investment and Securities, claimed the lesson Darwin teaches us is that even the fittest will fail in the game of evolution if they fail to find new growth engines.
(englishnews@chosun.com )
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