Taking a Long-term Approach
With great long-term asset managers
Taking a Long-term Approach
With great long-term asset managers
Acorns...A Compounding Story
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Starting Small
Building Momentum
Building Momentum
The growth of an acorn, from a small seed to a massive tree is an incredible metaphor. It just requires some small changes, patience, and the result is compounding. The growth of an acorn is an incredible example of the power of compounding.
Building Momentum
Building Momentum
Building Momentum
Once the tiny acorn gets into a place where it can start to spread its roots, the compounding can begin. Just get it started, nature will do the rest.
Standing Strong
Building Momentum
Standing Strong
Eventually, the acorn is transformed into a tree with access to water and sunlight, the maintenance required to grow is minimal. Now it just needs time to compound.
Wisdom on small changes, patience, and compounding...
Same as Ever (Morgan Housel)
Fewer Losers and More Winners (Howard Marks)
Fewer Losers and More Winners (Howard Marks)
From "Tiny and Magnificent" (When little things compound into extraordinary things)
The real magic of evolution is that it's been selecting traits from 3.8 billion years.
The time, not the little changes, is what moves the needle. Take miniscule changes and compound them by 3.8 billion years and you get results that are indistinguishable from magic.
That's the real lesson from evolution: If you have a big number in the exponent slot, you do not need extraordinary change to deliver extraordinary results. It's not intuitive, but it's powerful.
"The greatest shortcoming of the human race is our inability to understand the exponential function," physicist Albert Bartlett used to say.
An area where we commonly see this shortcoming in action is investing.
Same as Ever is an incredible read. Go to his chapter titled where sites examples of the power of compounding very small changes over long periods of time.
Fewer Losers and More Winners (Howard Marks)
Fewer Losers and More Winners (Howard Marks)
Fewer Losers and More Winners (Howard Marks)
From Memos From Howard Marks (September 12, 2023)
"My memos got their start in October 1990, inspired by an interesting juxtaposition between two events. One was a dinner in Minneapolis with David VanBenschoten, who was the head of the General Mills pension fund. Dave told me that, in his 14 years in the job, the fund’s equity return had never ranked above the 27th percentile of the pension fund universe or below the 47th percentile. And where did those solidly second-quartile annual returns place the fund for the 14 years overall? Fourth percentile! I was wowed. It turns out that most investors aiming for top-decile performance eventually shoot themselves in the foot, but Dave never did."
Poor Charlie's Almanack (Charlie Munger)
Fewer Losers and More Winners (Howard Marks)
Poor Charlie's Almanack (Charlie Munger)
From Poor Charlie's Almanac., pg. 62.
"Charlie counts preparation, patience, discipline, and objectivity among his most fundamental guiding principles. He will not deviate from these principles, regardless of group dynamics, emotional itches, or popular wisdom that "this time around it's different." When faithfully adhered to, these traits result in one of the best-known Munger characteristics: not buying or selling often! often. Munger, like Buffett, believes a successful investment career boils down to only a handful of decisions. So when Charlie likes a business, he makes a very large bet and typically holds the position for a long period (see Warren Buffett's analysis of the original 1962-1975 Munger partnership on page 21). Charlie calls it "sit on your ass investing" and cites its benefits: "You're paying less to brokers, you're listening to less nonsense, and if it works, the tax system gives you an extra one, two, or three percentage points per annum." In his view, a portfolio of
three companies is plenty of diversification. Accordingly, Charlie is willing to commit uncommonly high percentages of his investment capital to individual "focused" opportunities.
Find a Wall Street organization,
financial advisor, or mutual fund manager willing to make that statement!