Good To Great is a management book phenomenon that has sold millions of copies since it came out in 2001 and continues to sell at a clip of 300,000 a year.

The book examines 11 companies that went from "good" to "great". The lessons from these 11 companies, instilled in business students and managers around the world, are supposed to be a blueprint for future success. Or, as Amazon puts it, "a well-reasoned road map to excellence that any organization would do well to consider".

Well, Steven Levitt, of Freakonomics fame, believes this book points out an even more valuable lesson. Past performance does not guarantee future results:

Ironically, I began reading the book on the very same day that one of the eleven “good to great” companies, Fannie Mae, made the headlines of the business pages. It looks like Fannie Mae is going to need to be bailed out by the federal government. If you had bought Fannie Mae stock around the time Good to Great was published, you would have lost over 80 percent of your initial investment.

Another one of the “good to great” companies is Circuit City. You would have lost your shirt investing in Circuit City as well, which is also down 80 percent or more. Best Buy has cleaned Circuit City’s clock for the last seven or eight years.

See Also:

Yes, Farm Subsidies Are Idiotic, But They Don't Make People Fat