Blog

29
Jan

LAMP Index Returns for 2013 Surprise

We were surprised how well the Global LAMP Index® did in 2013 – a year we thought was likely to disappoint given the fragile state of the US and world economies. The sixty LAMP companies continued to widen their lead over global peer indices with a total return of 30.12 percent.

This marks the seventeenth time in the past eighteen years that the Global LAMP Index® beat its primary comparator, the large capitalization Morgan Stanley Capital World Index (MSCI World); and the thirteenth time LAMP beat all three of its primary global peer indices. To see results, click here.

The primary message conveyed by these returns is how consistently LAMP surpasses its benchmarks in all market conditions. While people may disagree on whether stocks at any moment in the cycle are overpriced or underpriced, quality usually wins the day.

The quality of LAMP companies, as explained throughout this blog, resides in their corporate cultures. When those cultures convey an inspiring mission, life-affirming values and respect for those doing the work, employees become more committed, more inclined to engage their hearts as well as their minds on behalf of the firm. By such means LAMP companies achieve extraordinary operating leverage.

Resilience in a chaotic market
The ascendency of LAMP companies over the past few decades marks a radical departure from the mores of industrial capitalism – a management method that is now self-destructing under the weight of its ecological and financial excesses. The point of departure between these contrasting models is in the relative values they place on living assets (people and Nature) vs. non-living (capital) assets.

Whereas traditionally managed companies put a higher value on capital assets, LAMP companies do the opposite. Reasoning that people and Nature are the source of capital assets and that profit can only arise from life, they take extraordinary measures to steward their living assets – a process we call living asset stewardship (LAS). This is the source of their resilience.

The blog entry preceding this one, titled “Distortions of the Anthropocene,” describes the growing risks of the industrial capitalist system, which for too long has placed a higher value on capital than on life. As the ecological and financial excesses of this system feed back on one another, tear at our social fabric and infect our political institutions, the world economy and global financial markets have become increasingly fragile.

LAMP Index returns, of course, must be considered within this larger context. While its constituent companies may be resilient, they are not immune to deteriorating market conditions as returns for 2002, 2003, 2008 and 2011 attest. Nevertheless, as living, adaptive learning communities, they tend to lose less in declining markets just as they tend to make more in rising markets.

Given the consistency of these excess returns over several market cycles, and the inner logic of the LAS model itself, we believe a robust new system of enterprise is evolving as humanity awakens to the destructiveness of industrial capitalism. The Global LAMP Index® was created as a learning lab to observe this evolution and to draw lessons from its successes and failures.

Success breeds imitation
Because in human enterprise, success breeds imitation, we believe the LAS model, or something close to it, will eventually become the norm. Traditionally-managed companies that today place a higher value on non-living capital assets than on living assets will become extinct. When that time arrives, quality differences between firms will likely reflect their relative skills in mimicking life itself.











XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

*