🧠 The Secret To Longevity

Friends,

Susannah Mushatt Jones died in May 2016. She ate four pieces of bacon every morning for over half a century. It’s won’t shock you to learn that she had high blood pressure.

But this isn’t a story about unhealthy eating habits.

That’s because Jones was born in 1899. Yes — she lived for over 116 years.

Her bacon obsession and high blood pressure got lots of press at the time of her death.The rest of her life was unremarkable, so it received little attention.

Jones never smoked, never drank, slept for at least 10 hours per day, and surrounded herself with a supportive community. Those factors, we believe, were the real “secret” to her longevity (good genes probably helped, too).

Yet, if you only knew about her bacon obsession and high-blood pressure, you wouldn’t conclude that she was “healthy.”

But that’s the point: it’s a mistake to reach a complex conclusion by focusing on a single metric.

Someone might be able to run a 5-minute mile, but what if their joints are degrading and they don’t have any close friends?

Someone might have a healthy BMI, but what if they smoke and have digestive issues?

Someone might be able to squat 500-pounds, but what if they use performance enhancing drugs and have anxiety?

The same is true when we look at companies to invest in.

It sounds tempting to buy a company with a dividend yield of 6%. But what if that same company hasn’t grown its sales for 15 years, carries a mountain of debt, and has underperformed the S&P 500 for a decade (hello, AT&T).

We love shortcuts as much as the next investor. But AT&T — just like Susannah Mushatt Jones — reminds us of an important truth: there’s no replacement for taking a holistic view of the world around us.

Relying on a single metric to deem something “cheap” or “expensive” is easy. But that’s not how valuation works.

“Cheap” companies can still decline by 80% (ask General Electric’s shareholders).

“Expensive” companies can still 10x (ask Amazon shareholders).

We should know — we’ve made valuation mistakes many times ourselves.

Good investing boils down to buying quality companies at favorable prices and holding them as long as they stay great. That sounds easy enough, but consistently executing that strategy in the long-run is one heck of a challenge.

That challenge only gets harder when you rely on a single metric to make valuation decisions. We encourage you to take a more holistic view instead.

Wishing you investing success,

– Brian Feroldi, Brian Stoffel, & Brian Withers

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