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Power Sheet: Why Financial Firms Are the Fastest Growing Companies

The first time I was told Wall Street was “over” was in 1987 after the Dow’s apocalyptic 22% one-day crash. Of course the Internet was over in 2000. So was biotech. Wall Street was over again in 2008. So was New York as a global financial capital. Investors worried that biotech was over again in 2014 and 2015. Are you noticing a pattern? We gullible humans fall into the same stupid trap time and again, forgetting how stunningly resilient an open economy is. None of those sectors were over, and if you want to see surprising evidence – and get a dose of reassurance in these economically depressing times – look at our new ranking of the 100 Fastest Growing Companies.

Surprise No. 1 is that the sector with the most companies on the list, 29 of them, is financials. Don’t call them Wall Street firms; almost none of them are anywhere near the southern tip of Manhattan. They’re booming by providing a wide range of financial services from all over the world. For example, Bank of the Ozarks (No. 69) lends to New York City builders. Noah Holdings, based in Shanghai, provides wealth management to rich customers. Its stock trades on the New York Stock Exchange – and by the way, the NYSE’s owner, Intercontinental Exchange, is No. 62 on our list.

Surprise No. 2 is that huge companies can still grow extremely fast – even in industries that were “over.” Ranking third on our list is Facebook, with revenue of almost $20 billion over the past four quarters. Even bigger is Gilead Sciences, No. 17 with revenue of almost $33 billion. A big biotech competitor, Biogen, ranks No. 73 with revenue of over $10 billion.

Surprise No. 3 is the ranking’s global scope, and particularly the growing presence of China. To be considered for this list, a company must be publicly traded on a U.S. stock exchange so we can get audited and consistent financial results for each one. (Several other criteria apply.) Our top company this year, Natural Health Trends, is California-based but gets 93% of its revenue from Hong Kong. No. 2 is Vipshop Holdings, an online fashion retailer based in Guangzhou. TAL Education (No. 11) is Beijing-based. AerCap Holdings (No. 13) is Irish, and JinkoSolar (No. 16) is Chinese. And those are just in the top 20. Within the U.S., these fast growers are also widely dispersed – though virtually all of them are in states on the country’s perimeter.

A powerful message in this year’s list is its reinforcement of Warren Buffett’s wisdom – that when a fundamentally strong company or sector or economy is down, it will most likely come back. It’s also a reminder that all kinds of businesses – young and old, big and small – hold the potential to grow fast, and that the power of entrepreneurial zeal and inspired management can emerge anywhere. At a time when most of the economic news seems to be downbeat, at least 100 companies apparently haven’t heard about it.

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What We’re Reading Today

Hillary Clinton diagnosed with pneumonia  
After video surfaced of Clinton wobbling and requiring help entering her vehicle at a 9/11 event Sunday, the campaign announced she had been diagnosed with pneumonia on Friday. While the disease can be serious, there’s no indication so far it will be a long-term health concern. Clinton has canceled a trip to California, while the race appears to be tightening. Washington Post

Agrium and Potash to merge 
Potash CEO Jochen Tilk will become executive chairman of the combined crop nutrient company, while Agrium head Chuck Magro will serve as CEO. WSJ

Pandora, Amazon set to launch new streaming services
Tim Westergren‘s Pandora plans to announce changes to its streaming services as early as this week, adding new features and easier navigation. It’s also launching a new on-demand streaming service, similar to Spotify by year-end. Jeff Bezos‘s Amazon will launch a streaming service for its Echo speakers. The new services, which will compete with Spotify and Apple Music, follow months of negotiations with record labels. Reuters

HP Inc. buys Samsung printer business
The deal for $1.05 billion gives HP Inc. a greater presence in Asian markets as well as 6,500 printing patents. As HP Enterprise’s Meg Whitman looks to cut back the size of her firm, HP Inc.’s Dion Weisler has looked to expand. The deal would have been much more difficult to accomplish if Hewlett-Packard were still one company. Fortune

Building a Better Leader

Instead of focusing only on compensation and promotions…
…to reduce attrition, think also about building relationships among employees and developing clear expectations. Employees will stay if they feel wanted and understand when they’re doing solid work. SmartBrief

In order to expand your business overseas…
…pick one country rather than trying a mult-country expansion at the outset. Then you’ll need to decide if you want your first hire in the new country to be a local or someone who already knows your business. Fortune

The former CEO of YUM Brands says he can judge a company…
…by looking at the way it displays honors for employees. If the awards or honors in the display case are gathering dust or not prominently placed, David Novak can tell the business leaders aren’t making employees feel like it’s the “good old days.”  Quartz

Worth Considering

The Fastest Growing Companies 
No. 1 on Fortune‘s annual ranking the Fastest Growing Companies is beauty product marketer Natural Health Trends. Mark Zuckerberg‘s Facebook is No. 3, while Doug Lebda‘s LendingTree lands at No. 10. Fortune

Samsung’s Galaxy problems deepen
Oh-Hyun Kwon‘s company told customers Monday to stop using the Galaxy Note 7 because it might ignite while charging. The new warning, combined with a massive recall, will cost billions and damage the company’s reputation. Making matters worse: It comes just as the competing Apple iPhone 7 is receiving a lukewarm reception. CNNMoney

Tesla shifts Autopilot from predominantly camera sensors to radar
In the announcement, CEO Elon Musk said this technology upgrade could likely  have prevented the death of a driver who was using Autopilot before the car crashed. Tesla will also add Autosteer, which forces drivers to keep their hands on the steering wheel in order to use Autopilot. Los Angeles Times

Up or Out

Samsung Electronics has nominated Vice Chairman Jay Y. Lee as an inside director. Fortune

Fortune Reads and Videos

Only 10% of smartphone owners say they’re “very likely”…
…to buy the new iPhone 7, according to research from Morning Consult. Half of those surveyed said they were “very unlikely” to purchase the new device.  Fortune

Starbucks will roll out its tea line…
…in all of its 6,200 Asian locations. It aims to reach $3 billion of global annual tea sales in five years. Fortune

BMW set to expand its line of electric cars
Its board is expected to approve the strategy to move forward on electric versions of its Mini, BMW3 series, and X4 SUV models. Fortune

A waste shark is set to be released…
…into Rotterdam ports. Four of the machines, which can skim the port, eating up waste that falls into the water, will be tested in the Port of Rotterdam over the next six months. Fortune

Happy Birthday

Chipotle founder and co-CEO Steve Ells turns 51 today.  The Richest

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Produced by Ryan Derousseau