Directionally Right

Investing is not an exact science. In fact, it’s probably not a science at all but rather an art. Lately, I’ve been thinking a lot about precision and its limits. This reflection led me to realize that being directionally right is often more valuable than insisting on being precisely correct. Let me explain.

Imagine we set a financial milestone: $10 million, $100 million, or even $1 billion. We follow a sound plan and reach $9.5 million instead of $10 million. Is that a failure? A success? Or somewhere in between? I’d argue that measuring our efforts this way isn’t always the most helpful approach, especially when we assign a strict timeline to reaching those goals.

I propose a different framing. Instead of focusing on a specific number, what if the goal was to grow wealth steadily over time without taking on unacceptable risks? This creates a more flexible blueprint. Rather than fixating on a precise target, we follow a set of principles that keep us on the right path.

For those with substantial capital—or who manage it—there’s a fundamental need to deploy it wisely over time. When you strip away the noise, the best way to grow wealth has always been through ownership of productive assets like businesses. If you look at the history of almost any family fortune, you’ll find it mostly rooted in a business or sometimes an income-generating asset, a natural resource, for example. Often, the latter still funds the former.

Looking ahead, the capital needs to be gainfully employed, ideally in perpetuity. Sure, there are stories of wealth being preserved through rare art collections or other unique assets, but most enduring fortunes remain tied to business interests. This is a recurring theme across history.

Business ownership, then, is the answer. If someone has a family business, they intend to hold, great. For others, the stock market offers a way to participate in a variety of businesses. All we have to do is identify the right ones and hold them long enough to see the benefit. It is easier said than done, but it’s possible.

I began by mentioning that investing is more of an art, and somehow, we ended up talking about rare paintings. One of my investor friends reminded me of Warren Buffett’s words: his portfolio is like a painting. You add a few touches here and there, letting it become a little more beautiful over time.

Financial milestones are, of course, wonderful to celebrate, though they often arrive unscheduled. But knowing the broader strokes that keep you on the right course is more important than hitting specific numbers. I believe long-term, patient ownership of businesses through stock investing is one of those guiding principles. Will you reach impressive milestones? I believe so. But what matters most is staying the course and remaining directionally right.

Disclosure:

Blue Infinitas Capital, LLC is a registered investment adviser.  The information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies.  Investments involve risk and, unless otherwise stated, are not guaranteed.  Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.