billy garver

Getting Stuck on the Ground Floor

“Getting in on the ground floor” may sound enticing. We humans like to be first, best, and on top of things. But just remember that the view is usually better from higher up.


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The View from the Top

photo shows a city skyline from the perspective of a rooftop viewfinder

In movies and popular media, there are certain images associated with investors. One of the character tropes is the well-to-do friend racing around in their fancy sports car.

Picture it with us. The car, bright and shiny, has a vanity license plate: it notes the ticker symbol for the holding that made them rich. If the story gives away any more information, it’s that the friend benefitted from a hot tip about a tiny tech company on the brink of striking it big.

Outside of Hollywood, it’s true that some of the most successful investors have done something like this. They happened upon that one hot investment that more than made up for all the mediocre ones. (The bad ones, too, for that matter.) They happened to get in, early.

Clients, we’re seeing newer industries with many possible pathways to growth over the next 7, 14, and 21 years. It’s exciting, but within each of these sectors, there might be dozens of public companies vying to become the next big thing. They all want their ticker on the license plate. The problem is, there is no way to tell—in the moment—which single company it will be.

If a growing industry is going to prove to be important, there’s no harm in waiting for the field to narrow. Time will tell, and so will experience, performance, management, debt, and competition. The companies that aren’t built to last? They’ll be winnowed out soon enough.

The car, the license plate, those aren’t the goal: we believe in investing because it’s getting a piece of the action. It’s providing capital to endeavors we can get behind.

So while getting in on the ground floor sounds enticing, there’s no promise that the building will ever be built—and it’s hard to beat the view from the top.


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A Certain Set of Skills

photo shows a baseball sitting on a striped jersey

When designing a portfolio, one might think about it like a baseball team. Obviously we want to build a winning team, but we know it won’t likely be an undefeated team. The strength of the team is in the versatility of the lineup.

Each player brings a skillset. There’s the base-stealer, the defensive replacement, the slugger, the all-star… We’re thinking about how some of these spots play a role in portfolios.

  • The Veteran Player. This is an older company that pays a nice dividend. It provides value even if it doesn’t perform as well as the others.
  • The Utility Player. This is a durable company providing steady, unexciting performances.
  • The Streaky Player. This is a company that has stretches of greatness followed by mediocrity—but it’s bound to turn it around. The potential is there, and the broader patterns suggest patience.
  • The Slugger. This company can carry a portfolio some days, strike out other days. It’s getting after it.
  • The All-Star. This company is the face of the portfolio: everyone knows it for its all-around performance. It’s a big presence.

No portfolio can be made from just one type of player. A portfolio consisting of only all-stars would be too expensive (and we like a bargain). A team of streaky players would be good during the good times—and tough to watch when they’re all struggling in sync.

A balanced lineup is what we desire. No guarantees on any particular outcome, but we think there are plenty of strengths that come in handy. Clients, when you have questions, please write or call.


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Growing Market Geniuses

photo shows two silvery arrows pointing opposite directions on a yellow background

Author F. Scott Fitzgerald wrote, “the test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function.” 

What if I told you—the best clients in the world—that you (yes, each and every one of you) have that first-rate intelligence? 

See, there’s something in our work together that tests this idea, just about on a daily basis. When you join us, you learn to live with the volatility in the market: it goes up and down, and we accept this as a feature of the ride. 

Very often, it goes down faster and deeper than it goes up. We may expect a 5% drop around three times a year: we might see a 10% drop around every two years. Meanwhile, gains of 10% are few(er) and far(ther) between: we’ve only seen it twice in the S&P 500 this century and only four times in the whole of the last century. And those gains have usually come shortly after one of the big drops. 

But we wouldn’t be in this business if, in the long run, the market went down more than it went up. 

So what gives? There are two seemingly opposing ideas about the market: 

  1. Drops go down faster, farther than gains go up.
  2. It goes up more than it goes down. 

Clients know the secret: the first idea is all about daily events, and the second idea is about the long haul. No guarantees, of course, but it is possible that these things can both be true. We just care less about the former. 

Therefore, if you consider yourself a member of the best client base in the world, then I consider you to be of first-rate intelligence. 

We’ve grown a community of geniuses here at 228 Main. Want to talk more about what this means for you? Write or call, anytime. 


Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmapped and my not be invested into directly. 


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It’s a Market of Socks!

photo shows a rainbow of socks clothes-pinned to a line with a sunny sky behind it

Imagine buying a value pack of socks. Unlike your everyday value pack, this one contains 500 pairs of socks, and every single pair is different. Some are ankle-height, some crew. Some black, some brown. Some striped, some filled with pictures of cheese. Some will become your favorite socks ever, and some of them you’ll become embarrassed to own.

All in all, the pack could still turn out to be a good deal, right? But one more thing: you can’t break up the set. If you really wanted to return one pair of the value pack, you’d have to toss all 500 pairs back. Even those favorites!

Things could get hairy. If you ever needed to pull back, and no longer had room for 500 pairs of socks, you’d have to clear house and start from scratch. Discover that one sock had a hole? Live with it, unless you’re ready to pitch the other 999 socks too.

Doesn’t it sound like more fun to only buy the socks that you like best? Socks that you can actually imagine owning? Or socks that may have untapped potential (think of those warm, fuzzy ones you’re glad you got for the depths of winter). And—when you need to get rid of a sock—you’re not losing your whole collection.

Some people do buy stocks that way in effect: indirectly, 500 at a time. But what a tremendous privilege and exciting challenge to pick only those stocks, I mean, socks that you find most worthwhile.

Clients, if you have any sock tips, email or call.


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The Price Is Right! Come on Down… or Up!

A bargain is a bargain, right? We seek those opportunities that may be undervalued by others right now. But there are other types of bargains lurking, too: those opportunities that get the label of overvalued right now… but may actually have years of growth ahead of them!


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The Active Roster

photo shows Billy Garver smiling

Clients, 2020 changed work life for many, but some changes in our office had been in the works even without a pandemic on top!

I say “in our office,” but the truth is we’ve been getting more flexible in our approach to work. The roster has grown again as of December 1, with the addition of Billy Garver as our new full-time Data Analyst. For now, Billy joins the team working from afar.

Here are a few things we’re excited about:

  • This role will grow along with Billy, who is a statistician and teacher by training. His skills will bring a fresh perspective to the research that happens behind the scenes in our firm.
  • Having another teammate means greater sustainability. You know my intent to work to age 92: our practice requires we “build a deeper bench,” an endeavor that can thrive across the decades.
  • The more we work from our collective strengths, the stronger the firm will be. Billy’s experience with documentation for academic research frees me up to spend more time doing what I love the most—talking with you!

I’m grateful to have a talent like Billy on board, and we’re excited to see how this group continues to exceed the sum of its parts!

Clients, if you would like to talk about this, or anything else, please email us or call.


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