What Real Long-Term Investing Looks Like

An 'untouched' Tilson family portfolio... Financing 'Timberlost'... A case study in long-term investing... A six-pack of stocks... Hold for the long run... Our 25th-anniversary broadcast... [Stansberry Research Logo] Delivering World-Class Financial Research Since 1999 [Stansberry Digest] An 'untouched' Tilson family portfolio... Financing 'Timberlost'... A case study in long-term investing... A six-pack of stocks... Hold for the long run... Our 25th-anniversary broadcast... --------------------------------------------------------------- Editor's note: This morning, Stansberry Research's senior partners sat down for a special discussion marking our company's 25th anniversary... And as part of the event, they covered a secret about our business that only 1% of our subscribers understand... If you're an Alliance member, you know what I (Corey McLaughlin) am referring to, but we know many other subscribers are unfamiliar... This is a part of our business that our leaders haven't discussed publicly in three years. Yet given the state of the economy and the markets, and our company's milestone, our team feels it is an appropriate moment to share this message – and opportunity to join an exclusive part of Stansberry Research – with anyone who wants to learn about it. So today, our publisher Brett Aitken, Retirement Millionaire editor Dr. David "Doc" Eifrig, and Stansberry's Investment Advisory lead editor Whitney Tilson did just that. Check out this morning's no-cost presentation [here]( for the complete details... And in today's Digest, we'll continue highlighting some of the foundational principles that have allowed our business to thrive as the leading publisher of independent financial research in the world for the past 25 years. Today's essay – initially published in Whitney's free daily newsletter on June 21 – picks up where yesterday's Digest left off and delves deeper into the power of investing for the long term... --------------------------------------------------------------- The power of long-term investing... In [yesterday's e-mail]( I outlined the simple investment strategy I would use if I were ever to go back to managing money again. And today, I'll take things a step further to show the power of staying invested for the long term... As I explained yesterday, I would likely call this potential strategy "10 for 10" – buying only 10 stocks and having an average holding period of 10 years. This strategy would mean replacing no more than one stock a year on average and it would involve very little rebalancing – as the key to long-term investment success (as I've written many times before) is letting your winners run. To be clear, I picked these numbers based on gut feel. One of my readers e-mailed me to say he thinks 12 stocks is the right number. Fair enough... And why look at holding stocks for an average of 10 years? Why not 20, 30, 40, or even 50 years? After all, a young person who's starting to put money away in a retirement account this year (like all three of my daughters) has at least a 50-year investment horizon. Such a long-term strategy would result in almost no portfolio turnover... Wouldn't it be interesting to look at such a portfolio? Maybe one with six blue-chip stocks, untouched for an average of 37 years? Well, I found one... For background, 102 years ago, my great-grandfather bought a 55-acre piece of land on Lake Sunapee in New Hampshire. I've spent a meaningful amount of time there every summer of my life – even when I lived in Tanzania, Nicaragua, and California growing up – so it's a very special place for me. My family has called the property "Timberlost" ever since the 1938 New England Hurricane. The storm did enormous damage, which you can see in these old family photos: When my great-grandfather passed away in 1958, he left Timberlost to his eight grandchildren, of whom my father is one. Unlike many similar old properties that were long ago broken up and sold off, we've managed to keep Timberlost in the family and dozens of us now share it – mostly amicably, I'm pleased to say! One reason for this is that my great-grandfather (or one of his children – nobody can remember the details) was wise enough to set up an account long ago and fund it with enough money such that the interest and dividends it earns cover most of the costs of the property (mainly taxes and maintenance). I'm one of three family members on the "finance committee," which is responsible for managing the account. About 25% is in cash (money-market and short-term bond funds, yielding around 5%) and 40% is in two index funds... but what's most interesting to me is the remaining 35%, which is invested in six stocks. And here's the cool thing... These stocks were purchased (again, nobody can remember by whom – probably my late grandfather) between 27 and 42 years ago and there hasn't been a single trade since then. In other words, it's the ultimate "sit-on-your-ass investing" (to quote the late Charlie Munger) – not buying or selling a single share for decades. It's a fascinating case study, so let's take a closer look with my rough analysis... To start, here's a table of the six stocks with the estimated purchase date and price, and their total and compounded annual performance since then [Editor's note: Numbers are through June 20, 2024, the closing price from the day before this essay was first published]: Wow, it would be hard to find a better example of the key elements of long-term success that I discussed yesterday: the power of long-term compounding, the importance of letting your winners run, and the way only a few big winners are likely to drive nearly all the performance in a portfolio (JPMorgan accounts for nearly half of the total return). But I wasn't finished with my analysis... These stocks were purchased in part because they were steady dividend payers, to provide income to Timberlost, so I had to estimate the average annual dividend each company paid. First, I looked at the recent dividend yield of the six stocks, which ranged from 2.3% to 6.1%: Then, I looked at each company's cash flow statement going back as far as Capital IQ data was available. For example, here's JPMorgan: I then compared these to each company's stock chart going back to the estimated purchase date. For example, here's a price chart of JPMorgan starting in early 1991: We can see that JPMorgan has paid a steadily growing dividend, so I'm going to estimate (based on eyeballing these two charts, not mathematically) that the dividend yield, recently at 2.3%, has averaged 2.0% over the past 33 years. When I did the same analysis for the other five stocks, I came up with the following estimates (I think I'm being conservative): Now let's add the estimated dividend yield to the stock's annual return and re-recalculate the return from that: This blew my mind: by adding in the modest 3.3% average dividend, taking the average annual return from 5.9% to 9.1%, the average total return soared from 1,290% to 3,566%. Talk about the power of long-term compounding... Finally, let's consider the most interesting question... Would we have been better off if my grandfather had purchased the S&P 500 Index fund instead of each of these stocks? I wasn't able to find any data that allowed me to calculate the S&P 500's returns with dividends (that's key) going back to specific dates or even months in the 1980s, so I used the annual numbers in Warren Buffett's Berkshire Hathaway (BRK-B) annual letter and came up with the following: As you can see, the S&P 500 edges out the six stocks... but it's not that far off. So do I wish my grandfather had bought the index instead of these six stocks? You could make a good argument either way, but I tend to think not because of the need for annual dividends. Had my family owned the index, we would have had to sell an average of 3.3% of our holdings every year to generate the same income as the stock portfolio. That's easy enough, of course... but this would have introduced the opportunity to do something foolish like panic and sell during a time of turbulence. Not to be a broken record... But the most important lesson here is that a powerful route to long-term wealth is to invest in a portfolio of blue-chip stocks (whether via an index fund or picked individually – that's what we at Stansberry Research are here to help you with) and then hold for the long run. --------------------------------------------------------------- Editor's note: As I mentioned... this morning, Whitney and several of our company's leaders sat down for a special broadcast marking our 25th anniversary. And in their discussion, they shared details about part of our business that we rarely discuss publicly. A slim percentage of our subscribers, our Alliance members, know what we're talking about. This "secret" gives you the best access to our research and a first look at any new investing approaches and publications that we publish. And, as we consistently hear from subscribers, it's something they've used personally to amass enormous wealth... [You can get the details here](. On this week's Stansberry Investor Hour, Dan Ferris and I welcome Brent Cook back to the show. Brent is an economic geologist and the founder and senior adviser of Exploration Insights, a newsletter company. With more than 30 years of experience in property economics and geology evaluations – spanning 60-plus countries – Brent has seen it all. He is one of a handful of the most credible, successful, and knowledgeable mining-stock investors in the world... If you invest in mining stocks, this episode is an absolute must-listen... [Click here to watch the interview now](... And to hear the full audio version of this week's Stansberry Investor Hour, visit [InvestorHour.com]( or find the show wherever you listen to your podcasts. --------------------------------------------------------------- Recommended Links: [NOW AIRING: Today's 25th-Anniversary Broadcast]( We're broadcasting our 25th-anniversary message to all Stansberry Research subscribers, where we'll reveal the No. 1 thing we recommend you do to prepare yourself for what could be a very long and volatile period in the markets. Don't miss this critical update – [click here to tune in](. --------------------------------------------------------------- [Former Hedge-Fund Manager Warns: 'No. 1 Stock in America to Trigger an Epic Collapse']( Brace yourself! A massive market collapse has begun. Whitney Tilson says it's unlike anything we've seen since 2008. Even Warren Buffett has joined the sell-off, jettisoning half of his stake in Apple. For the surprising reason behind this collapse and what it could mean for your money, [click here](. --------------------------------------------------------------- New 52-week highs (as of 8/12/24): Alamos Gold (AGI), SPDR Gold Shares (GLD), Intuitive Surgical (ISRG), Lockheed Martin (LMT), Cheniere Energy (LNG), London Stock Exchange Group (LNSTY), Motorola Solutions (MSI), Northrop Grumman (NOC), Sprott Physical Gold Trust (PHYS), and Viper Energy (VNOM). In today's mailbag, we received a few questions from folks looking for a replay of this morning's broadcast from Stansberry Research's senior partners... As we mentioned above, [you can watch a replay here]( at your convenience. Best regards, Whitney Tilson August 13, 2024 --------------------------------------------------------------- Stansberry Research Top 10 Open Recommendations Top 10 highest-returning open stock positions across all Stansberry Research portfolios. Returns represent the total return from the initial recommendation. Investment Buy Date Return Publication Analyst MSFT Microsoft 11/11/10 1,348.2% Retirement Millionaire Doc MSFT Microsoft 02/10/12 1,294.0% Stansberry's Investment Advisory Porter ADP Automatic Data Processing 10/09/08 940.3% Extreme Value Ferris WRB W.R. Berkley 03/16/12 789.3% Stansberry's Investment Advisory Porter BRK.B Berkshire Hathaway 04/01/09 663.1% Retirement Millionaire Doc HSY Hershey 12/07/07 491.1% Stansberry's Investment Advisory Porter AFG American Financial 10/12/12 441.7% Stansberry's Investment Advisory Porter TT Trane Technologies 04/12/18 432.7% Retirement Millionaire Doc TTD The Trade Desk 10/17/19 373.0% Stansberry Innovations Report Engel NVO Novo Nordisk 12/05/19 369.7% Stansberry's Investment Advisory Gula Please note: Securities appearing in the Top 10 are not necessarily recommended buys at current prices. The list reflects the best-performing positions currently in the model portfolio of any Stansberry Research publication. The buy date reflects when the editor recommended the investment in the listed publication, and the return shows its performance since that date. To learn if a security is still a recommended buy today, you must be a subscriber to that publication and refer to the most recent portfolio. --------------------------------------------------------------- Top 10 Totals 5 Stansberry's Investment Advisory Porter/Gula 3 Retirement Millionaire Doc 1 Extreme Value Ferris 1 Stansberry Innovations Report Engel --------------------------------------------------------------- Top 5 Crypto Capital Open Recommendations Top 5 highest-returning open positions in the Crypto Capital model portfolio Investment Buy Date Return Publication Analyst wstETH Wrapped Staked Ethereum 12/07/18 2,291.8% Crypto Capital Wade BTC/USD Bitcoin 11/27/18 1,479.1% Crypto Capital Wade ONE/USD Harmony 12/16/19 1,117.4% Crypto Capital Wade MATIC/USD Polygon 02/25/21 733.4% Crypto Capital Wade OPN OPEN Ticketing Ecosystem 02/21/23 279.3% Crypto Capital Wade Please note: Securities appearing in the Top 5 are not necessarily recommended buys at current prices. The list reflects the best-performing positions currently in the Crypto Capital model portfolio. The buy date reflects when the recommendation was made, and the return shows its performance since that date. To learn if it's still a recommended buy today, you must be a subscriber and refer to the most recent portfolio. --------------------------------------------------------------- Stansberry Research Hall of Fame Top 10 all-time, highest-returning closed positions across all Stansberry portfolios Investment Symbol Duration Gain Publication Analyst Nvidia^* NVDA 5.96 years 1,466% Venture Tech. Lashmet Microsoft^ MSFT 12.74 years 1,185% Retirement Millionaire Doc Inovio Pharma.^ INO 1.01 years 1,139% Venture Tech. Lashmet Seabridge Gold^ SA 4.20 years 995% Sjug Conf. Sjuggerud Nvidia^* NVDA 4.12 years 777% Venture Tech. Lashmet Intellia Therapeutics NTLA 1.95 years 775% Amer. Moonshots Root Rite Aid 8.5% bond 4.97 years 773% True Income Williams PNC Warrants PNC-WS 6.16 years 706% True Wealth Systems Sjuggerud Maxar Technologies^ MAXR 1.90 years 691% Venture Tech. Lashmet Silvergate Capital SI 1.95 years 681% Amer. Moonshots Root ^ These gains occurred with a partial position in the respective stocks. * The two partial positions in Nvidia were part of a single recommendation. Editor Dave Lashmet closed the first leg of the position in November 2016 for a gain of about 108%. Then, he closed the second leg in July 2020 for a 777% return. And finally, in May 2022, he booked a 1,466% return on the final leg. Subscribers who followed his advice on Nvidia could've recorded a total weighted average gain of more than 600%. --------------------------------------------------------------- Stansberry Research Crypto Hall of Fame Top 5 highest-returning closed positions in the Crypto Capital model portfolio Investment Symbol Duration Gain Publication Analyst Band Protocol BAND/USD 0.31 years 1,169% Crypto Capital Wade Terra LUNA/USD 0.41 years 1,166% Crypto Capital Wade Polymesh POLYX/USD 3.84 years 1,157% Crypto Capital Wade Frontier FRONT/USD 0.09 years 979% Crypto Capital Wade Binance Coin BNB/USD 1.78 years 963% Crypto Capital Wade You have received this e-mail as part of your subscription to Stansberry Digest. If you no longer want to receive e-mails from Stansberry Digest [click here](. Published by Stansberry Research. You’re receiving this e-mail at {EMAIL}. Stansberry Research welcomes comments or suggestions at feedback@stansberryresearch.com. This address is for feedback only. 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