Longevity: A New Year's Resolution for Investors

Decades of successful compounding means very little if you're not around to enjoy the spoils

Happy Monday and welcome to our new subscribers!

Every year on January 1st, men and women the world over swear that this time will be different. This is the year to get in shape or save more money or any of the other myriad resolutions that we like to make.

And, typically, we’re right back in the same spot a year later making the same resolution again. (I may or may not speak from experience on this one…)

But, setting aside any of our respective track records on New Year’s Resolutions, I think it means something that every new year brings with it a yearning to be better and a recognition that, until now, we’ve fallen short of the mark.

Such is the burden of humanity, I suppose.

Longtime readers of this newsletter will not be surprised that, when looking for exemplars of ethical behavior and rational thinking, I turn to Warren Buffett and Charlie Munger first.

The pair regularly dish out memorable investing and life lessons, but one critical facet of their immense success remains relatively unappreciated: Buffett and Munger are old men. Or, in other words, each has managed to live a very long life. (And, hopefully, will continue doing so for many years to come.)

Yesterday, Charlie Munger celebrated his 99th birthday — but, listening to him, you would never know it. The Berkshire Hathaway vice-chairman is every bit as sharp and vital as a man decades younger.

Of course, there’s the flip side to that. We all know (or are) people who pay no heed to their bodies and minds — and seemingly stand little chance of living into their seventies or eighties, let alone pushing the century mark like Munger.

Adam J. Mead @BRK_Student

Want a competitive advantage in life? Take care of yourself. As Munger would say, it's so simple. Eat good food, take mild exercise, get enough sleep, and extricate yourself from permanent-stress jobs (you couldn't pay me enough to be some NYC junior analyst).

Andrew Kuhn @FocusedCompound

Obesity rates by state from 1985 - 2021 Pretty remarkable how fast these rates have changed What’s the main driver of this? https://t.co/UyXZJa9vQc

The exact recipe of Buffett and Munger’s longevity isn’t the point of this article, but rather the wish that, in 2023, investors resolve to improve their physical and mental fitness — thereby setting themselves on the path to a longer life.

After all, decades of successful compounding will mean very little if you’re not around to enjoy the spoils.

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Compounding takes time

As I mentioned in my recent piece on Anne Scheiber, effective compounding works best over long periods of time. So, either plan on starting early or living until a ripe old age.

For many of us, there’s not much to be done about getting an early start. One way or the other, that cake is baked. But we can all take important steps — right now — to make sure that we live long enough to see our investment snowballs reach the bottom of the hill.

So many heroes of the money game — Warren Buffett, Charlie Munger, the aforementioned Scheiber, Philip Carret, Walter Schloss, Phil Fisher, John Templeton, etc. — reached a very advanced age. Perhaps we would be wise to study that aspect of their lives just as much as their stock-picking.

One BIG caveat: Listen to what Warren Buffett preaches, not what he practices.

The Oracle of Omaha may be the only person on the planet who can drink can after can of Cherry Coke and make regular trips to McDonald’s and Dairy Queen — and still remain healthy at 92 years of age.

Let’s just acknowledge that he’s a very big exception to the rule and move on.

Pavel K @kadistock

@kejca @BRK_Student I truly believe that Buffett's brain burns all those excess calories.

But, despite Buffett’s irregular diet, there’s still much to learn from him on this subject.

In Getting There: A Book of Mentors, Buffett shared an example of the kind of speech he frequently gave to classes of high school and college students throughout the 1990s and early 2000s. Surprisingly, the topic was physical and mental fitness.

Let’s say that I offer to buy you the car of your dreams. You can pick out any car that you want, and when you get out of class this afternoon, that car will be waiting for you at home. There’s just one catch… It’s the only car you’re ever going to get in your entire life.

Now, knowing that, how are you going to treat that car? You’re probably going to read the owner’s manual four times before you drive it; you’re going to keep it in the garage, protect it at all times, change the oil twice as often as necessary. If there’s the least little bit of rust, you’re going to get that fixed immediately so it doesn’t spread — because you know it has to last you as long as you live.

Here’s the thing: that’s exactly the position you are in concerning your mind and body. You have only one mind and one body for the rest of your life. Isn’t it just as important to take care of your mind and body as it is to take care of that car?

With over 70% of American adults classified as overweight — and 42% obese — we’re not doing a very good job at treating our bodies like a once-in-a-lifetime gift.

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Where to start?

To, once again, quote Warren Buffett: “It is not necessary to do extraordinary things to get extraordinary results.”

Don’t get hung up on changing everything about your life at once. Small, incremental steps — made consistently over time — will add up (and compound) into drastic improvement.

With the disclaimer that I’m not a doctor (nor did I stay in a Holiday Inn Express last night), here are some quick and easy ways to improve both body and mind:

• Take a walk every day

• Drink more water

• Cut back on processed food

• Read up on Zone 2 cardio (I ❤️ Peter Attia!)

• Lift weights and strength training

• Download (and use) a meditation app

• Commit to a sleep schedule

You don’t need to start running marathons like Ted Weschler to add more years on to your life. Any or all of the above should make an appreciable difference to your health.

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Knowledge compounds, too

Okay, back to Charlie Munger for a moment.

Back in November, in the midst of FTX’s epic crypto collapse, everyone wanted to hear from Munger. Not surprisingly, CNBC’s Becky Quick landed an interview with Berkshire’s resident crypto bear and he — respectfully — danced on the grave of this latest example of wretched excess.

Think about that: During a breaking news story about a cutting-edge topic like a failed cryptocurrency exchange, the most coveted interview subject — besides SBF — was a (then) 98-year-old man.

That command of the moment doesn’t happen if Munger had lost a step mentally. But, thankfully, clear thinking and logic/rationality wears well at any age.

I think that Munger remains a trusted authority on so many different subjects because he refuses to stop learning. He reads voraciously, networks with compelling people, stays abreast of current trends (if only to warn against them), and never allows himself to believe that he knows “enough”.

Such an attitude is like exercise for the mind. And, in Munger’s case, his brain is ripped after decades of meticulous care and improvement.

This is also what makes investing such a worthwhile, lifelong endeavor. Unlike athletics, in which a player “peaks” at a youngish age, investors can compound knowledge — and keep getting better — throughout their entire lives.

Every book, article, research paper, memo, 10-K, or earnings call transcript adds a little bit more to your accumulated base of knowledge. And, if you keep shoveling logs onto that fire, the sky is the limit.

Charlie Munger proves that.

Happy New Year! I hope this piece inspires you to improve your health in 2023. I’ll occasionally provide updates on my own progress, as well, during the year ahead.