Zooming out from another turbulent week in the market, I wanted to share this excellent interview with Dr. David Sinclair, a professor of genetics at Harvard Medical School who studies aging—and, in particular, is on a mission to prove that it’s possible to live beyond a century. In the conversation, Sinclair explores the interplay between diet and exercise, sleep, stress, and other factors that can greatly enhance one’s lifespan. To quote Warren Buffet on the matter: “You only get one mind and one body. And it’s got to last a lifetime. Now, it’s very easy to let them ride for many years. But if you don’t take care of that mind and that body, they’ll be a wreck forty years later, just like the car would be.” (H/T Sandeep Kapadia)
“Biologist and genetics expert Dr. David Sinclair is out to prove he can live past 100 years old, and he thinks you can too. On this episode Sinclair goes in-depth on the process of aging and the techniques you can incorporate into your life that help you live a longer, healthier life, including optimizing your diet, the benefits of exercise, the role of a positive attitude, the importance of sleep, the three supplements he takes every day, why it’s never too late to slow the process of aging, and so much more.”
“What happens next?”
I had the chance to speak with Elliot Turner this week, CIO of RGA Investment Advisors, whose Q1 Commentary published this week is an insightful read for investors. Elliot walks readers through some of the current market dynamics, offering a thoughtful perspective on the recent drawdown, what happens when sentiment shifts, and the opportunities that are emerging on the fringes of this environment. “Over our investing time horizon of five years,” Elliot writes, “we expect to see the actual fundamental performance of businesses themselves drive value and we think the environment could not possibly be better for many of our companies. He concludes:
“Although the stock prices within our portfolio are down, and in some cases considerably, over the past year the value of each of the businesses we own has increased substantially over the same time period. A company’s value and the price of its stock do not necessarily move in tandem. Market sentiment weighs heavily on a stock’s price, while value itself is determined by the level of cash flow, growth and rate of return a company can deliver on its assets. All of our companies grew in the past year, will grow this year, and earned cash flow that either adds onto the balance sheet, gets invested for future growth or share repurchases. These are companies that individually can and will weather any kind of economic storm. This has been evidenced between the Great Financial Crisis and the COVID crash and stresses during lockdowns. Inflation is a new challenge, but as we have been emphasizing– for our companies who deploy little physical capital and rely heavily on intellectual property, with pricing power or tollroad-like economics–it will be manageable and, in some cases, an outright opportunity. Although stock prices are down in the short-run, business value will grow each and every day and one day the market will hold these shares dear again.”
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Double-down on research during volatility
Joe Frankenfield of Saga Partners published some of his own thoughts on the current market in a Q1 Letter published this week. What I appreciated about Joe’s letter is that he doesn’t blame the market for irrational behavior, but rather he uses the volatility as an another opportunity to refocus his research on the actual business fundamentals of the companies he owns. He writes, “we attempt to understand if we are missing something by continually evaluating the long-term outlooks of our companies using all the relevant information that we have today from a first principles basis.”
“My way of coping with how I am innately wired is by accepting this fact and then trying to know what I can and cannot control. A core part of my investing philosophy is that I do not know what the market will do next, and I never will. Inevitably the market or a specific stock will crash, as it does from time-to-time. This “not timing the market” philosophy or treating our public investments from the perspective of a private owner may feel like a liability during a drawdown, but it is this same philosophy of staying invested in companies we believe to have very promising futures which positions us perfectly for the inevitable recovery. Eventually, emotions and the business environment will normalize, and the storm will pass. It could be next quarter, year, or even in several years, but we will be perfectly positioned for the recovery, at which point the stock price lows will likely be long gone.”
“But passivity also created risk. If there was a problem with the code, someone could exploit it directly, without needing to bypass any human safeguards. And limiting blockchain interactions to cut costs entailed a trade-off: When a smart contract—a script that executes automatically when certain criteria are met—has fewer steps, it can leave more room for security vulnerabilities. The list of exploited crypto platforms is long and grows by the week: Poly Network, Wormhole, Cream Finance, Rari Capital, and many more. ‘There’s a common saying in DeFi that there are two types of protocols,’ Day says. ‘Those that have been hacked and those that are going to be hacked.'”
“The most important thing to understand is the scale. An energy transition affecting a country of one million people is very different from a transition affecting a nation of more than one billion. It is one thing to invest a few billion dollars, another to find one trillion. This is where we are in terms of global civilization: This transition has to happen on a billion and trillion scales. Now, according to COP26,2 2 The 26th United Nations Climate Change Conference, held in Glasgow last fall. we should reduce our carbon dioxide emissions by 45 percent by 2030 as compared with 2010 levels. This is undoable because there’s just eight years left, and emissions are still rising. People don’t appreciate the magnitude of the task and are setting up artificial deadlines which are unrealistic.”
This information should not be considered a recommendation to purchase or sell any particular security. It should not be assumed that any of the investments or strategies referenced were or will be profitable, or that investment recommendations or decisions we make in the future will be profitable. This article contains links to 3rd party websites and is used for informational purposes only. This does not constitute as an endorsement of any kind. While Nightview uses sources it considers to be reliable, no guarantee is made regarding the accuracy of information or data provided by third-party sources. Nightview Capital Management, LLC (Nightview Capital) is an independent investment adviser registered under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about Nightview Capital including our investment strategies and objectives can be found in our ADV Part 2, which is available upon request.
