Let us take a look at the top listed companies in the stock market with either the highest assets or highest sales. All of these enterprises have achieved enormous size, and by that token they have presumably made a great success.
But how successful are they from the standpoint of the investor?
What do you mean by success in this context?
"A successful listed company is one which earns sufficient to justify an average valuation of its shares in excess of the invested capital behind them."
This means that to be really successful (or prosperous) the company must have an earning-power value which exceeds the amount invested by and for the stockholder.
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It is evident from an analysis that the biggest companies are not the best companies to invest in, based on the percentage earned on invested capital.
It is equally true that small-sized companies are not suited to the needs of the average investor, although there may be remarkable opportunities in individual concerns in this field.
There is some basis here for suggesting that defensive investors show preference to companies in the asset range between $50 million and $250 million, although we have no idea of propounding this as a hard-and-fast rule.
Benjamin Graham
The Intelligent Investor
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