A Learning Lab With Extraordinary Results
The Global Living Asset Management Performance (LAMP) Index is a learning laboratory of sixty (60) corporate pioneers in living asset stewardship. It was conceived as a research project in 1995 to inform the writing of Profit For Life (Cambridge: Society for Organizational Learning. 2006). The Index sought LAS exemplars in a diverse spectrum of global industry/sectors – companies that were pioneers in life-mimicking organization and management.
When completed in 2004 for the first draft of Profit For Life, the composition of the Global LAMP Index® was roughly comparable to peer indices, such as the Morgan Stanley Corporate International (MSCI) World Index and the Financial Times FTSE Global Index. This made possible credible performance comparisons with those indices.
In 2007, following publication of Profit For Life, Northfield Information Services analyzed Global LAMP Index® Returns in terms of risk and reward. Their analysis included some back-testing (1996 – 2004) as well as real-time results (2004 – 2006). The extraordinary results of these tests were published in July 2007 (See: Jay Bragdon and Jeanne Veatch-Bragdon, “Companies That Mimic Life,” Reflections, The SoL Journal, Vol. 8, number 2). These showed consistent excess returns in both rising and falling markets, a result Northfield said was both “economically and statistically significant.” A second Northfield analysis, conducted the following year, affirmed similar results.
From yearend 2007 through 2011, performance tracking has been done with Bloomberg pricing and dividend data. Results are shown in the following section. The exceptional compound return advantage of the Global LAMP Index® is due to the consistency of its market leading results.
Composition of the Global LAMP Index® has been more stable than its comparators since it was finalized in 2004. Over the seven year period to yearend 2011, there have been only four changes in its list of companies: two due to mergers and two to substitution. This averages out to roughly a fifth of the turnover rates of comparable indices.
Substitutions take place only when an original LAMP company fails our selection screens, which happily is a rare event. As a rule, LAS cultures tend to get stronger rather than weaker over time due to positive feedbacks illustrated in the reinforcing cycle of LAS, innovation and profit.
Investment Results By Year
| AVG ANN RET | 15.27 | 6.84 | 8.01 | 8.09 | 7.93 | |
| MKT CAP | EQUAL | COMPARATOR WORLD INDICES | S&P 500 | |||
| YEAR | WEIGHTED | WEIGHTED | MSCI | FTSE | S&P 100 | INDEX |
| 1996 | 27.24 | 28.20 | 13.47 | 12.79 | 23.54 | 18.84 |
| 1997 | 26.55 | 33.84 | 15.76 | 15.52 | 31.49 | 30.15 |
| 1998 | 33.07 | 33.73 | 24.31 | 23.02 | 34.68 | 28.58 |
| 1999 | 40.08 | 46.25 | 24.94 | 25.99 | 25.82 | 21.04 |
| 2000 | -8.86 | 3.73 | -13.19 | -11.07 | -14.33 | -9.09 |
| 2001 | -7.10 | -2.10 | -16.80 | -16.14 | -14.03 | -11.88 |
| 2002 | -19.38 | -13.33 | -19.88 | -19.06 | -23.57 | -22.10 |
| 2003 | 34.88 | 42.55 | 33.10 | 33.88 | 30.92 | 28.69 |
| 2004 | 10.65 | 18.07 | 15.25 | 16.08 | 10.14 | 10.87 |
| 2005 | 7.48 | 12.28 | 10.02 | 11.32 | 5.46 | 4.89 |
| 2006 | 17.09 | 21.07 | 20.65 | 21.46 | 20.40 | 15.79 |
| 2007 | 12.17 | 9.63 | 9.57 | 17.42 | 8.41 | 5.49 |
| 2008 | N/A | -37.86 | -40.33 | -42.62 | -36.44 | -37.00 |
| 2009 | N/A | 44.56 | 28.01 | 34.40 | 24.15 | 26.46 |
| 2010 | N/A | 12.92 | 9.55 | 10.80 | 5.97 | 15.06 |
| 2011 | N/A | -9.20 | -5.02 | -5.53 | -3.18 | 1.10 |
Compounded Investment Returns
| MKT CAP | EQUAL | COMPARATOR WORLD INDICES | S&P 500 | |||
| YEAR | WEIGHTED | WEIGHTED | MSCI | FTSE | S&P 100 | INDEX |
| All YRS | 582.35 | 109.32 | 142.78 | 188.18 | 154.49 | |
| 10 YRS | 100.22 | 42.06 | 61.37 | 43.85 | 31.97 | |
| 5 YRS | 1.00 | -12.92 | -5.22 | -14.62 | -2.24 | |
| 3 YRS | 48.22 | 33.20 | 40.68 | 27.38 | 47.10 | |
| 1 YR | -9.20 | -5.02 | -5.53 | -3.18 | 1.10 | |
- Returns for 1996—2007 were verified by Northfield Information Services.
- Equal weighted Global LAMP Index returns for the years 2008—2010 are based on Bloomberg data.
- The data shown here is historic. There can be no guarantee it will continue into the future.
The Big Picture
The big picture that emerges from the back tests and ongoing investment results of the Global LAMP Index® is a more effective mental model of the firm (LAS model) overtaking a less effective one (traditional model). This index of LAS exemplars has consistently exceeded the performance of its peer indices in both up and down markets—often by wide margins. Such performance disparities are not expected to last forever because success breed imitation; but they are an important affirmation of changing tides in global markets.
