sustainability

Enduring Value

© Can Stock Photo / EpicStockMedia

We think a lot about how to make things last. It is a key concept for your assets, our relationships, and the securities in which we invest.

But our enterprise here at 228 Main has to endure so we may continue to be of service. We therefore work diligently on its sustainability.

Thinker Morgan Housel wrote about the sources of sustainability in business. Relative to the competition, these attributes provide an enduring competitive advantage:

1. Learn faster.

2. Empathize more with your customers.

3. Communicate more effectively.

4. Be more patient.

These things resonated with us because they represent much of what we strive for. Patience is a prerequisite of successful investing. It is free, but not easy to practice. It also is what lets us be content to work with you at your pace, on your schedule, since we are talking about your money.

You know by now how highly we value effective communication! Listening to you and talking to you in various ways is one of our three core activities. We put a lot of effort into it.

Empathy—understanding what you are going through, where you want to go—is perhaps the key to being able to meet your needs.

We are surprised at how much we are still learning after so many years of experience. In this rapidly changing world, continuous learning is required in order to be able to survive and thrive.

Clients, we are not claiming perfection in any of this. But we are mindful of the things we must do in order to be a reliable partner for you through the years. If you would like to talk about this or anything else, please email us or call.

Crab Claws, Sustainability, and Your Money

© Can Stock Photo / connect

Perhaps the most sustainable crop in the world is the stone crab claw, a seasonal Florida delicacy. You see, stone crabs are caught in live traps, a claw is removed, and the crab is returned to the water. The claw regenerates, usually growing back larger than before—an ability they evolved to escape predators, which now supplies Florida fisheries with a sustainable catch.

We have come a long way since 1883, when a keynote speaker at the International Fisheries Exposition in London proclaimed that “all the great sea fisheries are inexhaustible.” We later learned to our chagrin that it is, in fact, entirely possible to harvest anything to the point of extinction.

Fortunately we also figured out how to nurture fisheries to produce more fish, and to limit harvest to sustainable levels. You can take out the entire population of fish just once…but you may be able to harvest some fraction of the population, year after year, until the end of time.

A pertinent comparison may be made to your stock of wealth in retirement. Like a fishery, a portfolio can be over-harvested until it inevitably declines and disappears. But with sustainable management, it may produce a recurring crop. This is the endowment principle in action. A dollar may be spent one time only—but if invested, the income from it may be spent every year, in perpetuity.

Decades ago, our life expectancies did not extend long past retirement age. Planning for a short retirement, one could aim at a target sum and figure that it would be spent down over a few years, then there would be a funeral. But with many life expectancies extending decades past retirement, the arithmetic of planning has changed completely. Not every financial planner has kept up with the change.

Sustainable fisheries assure the world that it will not run out of fish. Sustainable portfolios reduce the chance that you will run out of money in retirement. One of our objects is to help you understand what part of your resources may be considered permanent capital, to be invested on a sustainable basis.

This is a process that has some nuances; each of you has a different situation and specific goals. Clients, if you would like to talk about your situation, please write or call.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Investing involves risk, including possible loss of principal.