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> average S&P 500 company now lives fewer than 20 years No, the average age of an S&P 500 company is now less than 20 years. Which is heavily influenced by the

> average S&P 500 company now lives fewer than 20 years No, the average age of an S&P 500 company is now less than 20 years. Which is heavily influenced by the rise of technology and the many S&P 500 companies that were created in the last ~20 years. It does not mean that companies are dying faster, just that S&P 500 is filled with young companies.

Barrin92 6y ago
I don't think that's correct, at least according to this soruce (https://www.imd.org/research-knowledge/articles/why-you-will-probably-live-longer-than-most-big-companies/ https://www.imd.org/research-knowledge/articles/why-you-will...) "A recent study by McKinsey found that the average life-span of companies listed in Standard & Poor’s 500 was 61 years in 1958. Today, it is less than 18 years. McKinsey believes that, in 2027, 75% of the companies currently quoted on the S&P 500 will have disappeared. They will be bought- out, merged, or will go bankrupt like Enron and Lehman Brothers."
- solidasparagus 6y ago
  I didn't see any evidence backing up their estimates nor any number that represent how many former S&P 500 companies go out of business. The studies I could find listed some of the companies that fell out of the S&P500 and AFAICT most of them still exist. I would be careful about taking McKinsey's carefully crafted quotes and projections at face value. 'Disappeared' is intentionally vague. They also intentionally use age of a company when talking about the past and tenure on the S&P500 when talking about the future to make the numbers seem more dramatic[1]. It's part of their sales pitch - "it's harder than ever to run a company so you should really hire a consulting company to save you". [1] https://www.mckinsey.com/~/media/McKinsey/Industries/Electric%20Power%20and%20Natural%20Gas/Our%20Insights/Traditional%20company%20new%20businesses%20The%20pairing%20that%20can%20ensure%20an%20incumbents%20survival/Traditional-company-new-businesses-VF.ashx https://www.mckinsey.com/~/media/McKinsey/Industries/Electri... (page 4)

Barrin92 6y ago

I don't think that's correct, at least according to this soruce (https://www.imd.org/research-knowledge/articles/why-you-will-probably-live-longer-than-most-big-companies/ https://www.imd.org/research-knowledge/articles/why-you-will...) "A recent study by McKinsey found that the average life-span of companies listed in Standard & Poor’s 500 was 61 years in 1958. Today, it is less than 18 years. McKinsey believes that, in 2027, 75% of the companies currently quoted on the S&P 500 will have disappeared. They will be bought- out, merged, or will go bankrupt like Enron and Lehman Brothers."

solidasparagus 6y ago
I didn't see any evidence backing up their estimates nor any number that represent how many former S&P 500 companies go out of business. The studies I could find listed some of the companies that fell out of the S&P500 and AFAICT most of them still exist. I would be careful about taking McKinsey's carefully crafted quotes and projections at face value. 'Disappeared' is intentionally vague. They also intentionally use age of a company when talking about the past and tenure on the S&P500 when talking about the future to make the numbers seem more dramatic[1]. It's part of their sales pitch - "it's harder than ever to run a company so you should really hire a consulting company to save you". [1] https://www.mckinsey.com/~/media/McKinsey/Industries/Electric%20Power%20and%20Natural%20Gas/Our%20Insights/Traditional%20company%20new%20businesses%20The%20pairing%20that%20can%20ensure%20an%20incumbents%20survival/Traditional-company-new-businesses-VF.ashx https://www.mckinsey.com/~/media/McKinsey/Industries/Electri... (page 4)