The new normal? Kinda like the old normal…

If anything is unAustralian, it's four beers costing more than a pineapple.

A young man holds a small bottle of beer as he slumps sadly on one elbow in a comfortable chair with his head propped in his hand and staring into space with a dejected look on his face.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It's one of the great headlines: "Beer, cigs up".

And, as any smoker or drinker knows, it's one that could be applied regularly, as government taxes increase in line with inflation.

Which, as you might know, is kinda high right now, leading to headlines suggesting that we might soon have to pay $15 for a pint.

Now, I'm not sure, but I think if anything is unAustralian, it's four beers costing more than a Pineapple.

Yes, yes, I hear the harm minimisation angle, but apparently we pay double the grog tax the Kiwis pay, around 6 times as much as the Poms, and a staggering 15 times the amount they pay in Germany – the home of beer.

Am I talking out of my 'kick'?

Maybe.

I don't mind a quiet beer from time to time.

But there are legitimate questions to ask about whether beer tax (and fuel tax, for that matter) are the right ways to fund government spending in this day and age.

Once upon a time, trade excises were the best, most reliable way to raise revenue – when hiding income was easier and computerisation was a pipe dream.

That was the 1800s.

These days? Well, let's just say we've moved on (and in the case of petrol excise, there won't be much to tax in 10 or 15 years!).

But the beer tax palava also asks questions about rising prices in general.

Beer tax isn't a consideration for the RBA when discussing interest rates, but the same forces are at play in both cases.

The Reserve Bank put rates up on Tuesday. The Big Four banks finally followed, yesterday.

And there's almost-certainly more to come.

Meanwhile?

Meanwhile, we're in the opening salvos of earnings season, where companies will give us a look under the bonnet – and one of the key things to keep an eye on is how well – or otherwise – they're dealing with inflation.

I'm regularly asked 'How are you investing in this time of…'.

At the moment it's '…inflation and rates.'

In the past it was high valuations.

Before that, it was COVID.

And so it goes.

My answer is boring – and probably doesn't help me get invited back on those programs!

I haven't changed my investing strategy in years.

Oh, I've learned some things. And modified my approach accordingly.

But I've never taken a '…this time of…' strategy.

For example, I've always liked businesses with strong brands and pricing power.

Sometimes that's not what the cool kids are investing in, and sometimes those companies can be out of favour.

But ask yourself how the 'hot stocks' have performed recently.

You know, the ones that people loved because they were 'cool', no matter how good or bad their financials looked.

Remember when everyone wanted to buy buy-now-pay-later stocks?

Or lithium miners?

Or whatever.

No, I'm not saying they can't or won't come good.

Some probably will.

Some, well… won't.

I'm a bit old school. I like profitable companies.

Not exclusively – I've recommended loss-making companies where I think there's a clear path to profitability – but mostly.

That doesn't get me invited to the 'hot stock' forums or panels.

Meanwhile?

Meanwhile, shares in a company I own, Berkshire Hathaway, are up 62% over the last 5 years.

Another, Washington H. Soul Pattinson, is up 52%.

Amazon (ditto) is up 171%.

Oh, they're not all winners – I've lost some money, too.

Have other companies gained more over the last 5 years? Absolutely.

Would I have liked to own them? Sure, if I'd have known, in advance, what might happen.

But that would have required luck. And, in some cases, blatant speculation.

Hey, someone wins lotto every week, too, right?

I looked silly for a while, eschewing buy now, pay later.

Afterpay shareholders got a Godfather offer from a US payments company and – if they'd sold, rather than taking shares in the deal – got very, very lucky.

Others, who bought shares in competitors are down 84% over the last year (Zip), 86% (Sezzle), or 76% (Openpay).

There were others.

No, I'm not raining on their parade.

I'm not rubbing it in.

But I am making the point that, at certain times, a 'boring' investment strategy can look hopelessly out of touch.

One business magazine, in 1999, famously asked 'What's Wrong, Warren?".

They were, of course, talking about Warren Buffett, whose company, Berkshire Hathaway that I mentioned earlier, had not only avoided investing in tech, but had suffered serious share price falls as investors abandoned it.

They were investing, instead, in dot.com high-flyers.

We know how that ended.

Unfortunately, investment memories are short.

Maybe it's the seduction of seemingly quick, easy wins.

The challenge of watching other people get rich and not being able to resist joining the party.

Of 'this time it's different'.

Sometimes, it is different.

Amazon made it through the dot.com carnage and went on to bigger and better things.

There will be winners from the current tech slump that will look cheap, today, in hindsight.

Hopefully, including a couple I own.

But I own some boring businesses. Ones that tick away, compounding in the background.

They're not going to be 'hot stocks' any time soon.

But they're slowly, surely, growing.

Some have been ''hot stocks', but have fallen to Earth.

And I'm okay with that, too.

Because I didn't buy them because they were 'hot'.

I bought them because I think they'll be bigger, better and more profitable in 5, 10 and 15 years.

I plan to own the vast majority of my current holdings well beyond 2037, if they continue to perform.

And if they do?

Not only will the compound returns be great, but I'll have avoided brokerage, capital gains tax and the challenge of finding better companies to replace them.

I'll keep adding money to my portfolio regularly, too – sometimes buying more of what I already own, sometimes buying shares in companies I haven't owned before.

Some years will be great.

Some will be ordinary.

But over the long term?

I reckon it'll be pretty boringly wonderful.

Which beats 'exciting, but mediocre', don't you reckon?

Fool on!

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Scott Phillips has positions in Amazon, Berkshire Hathaway (B shares), and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon, Berkshire Hathaway (B shares), Washington H. Soul Pattinson and Company Limited, and ZIPCOLTD FPO. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), short January 2023 $200 puts on Berkshire Hathaway (B shares), and short January 2023 $265 calls on Berkshire Hathaway (B shares). The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Amazon and Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Motley Fool Take Stock

A man in a suit smiles at the yellow piggy bank he holds in his hand.
Motley Fool Take Stock

Why are bank shares up so much?

While we can speculate on the answer, I’m not sure the speculation is useful.

Read more »

Model house with coins and a piggy bank.
Motley Fool Take Stock

'Housing AND Super', not 'Housing OR Super'

Yeah, but a home is more important than super, right?

Read more »

A man wearing thick rimmed black glasses and a business shirt with red suspenders sits at his desk sorting through the earnings report of Nickel Mines
Motley Fool Take Stock

One big lesson from earnings season

There is a lot to take in.

Read more »

Australian notes and coins surrounded by a calculator and the word super spelt out.
Motley Fool Take Stock

A simple fix for superannuation

It's time to return Super to its original purpose, to remove the complexity and to stop it being used as…

Read more »

Legendary share market investing expert and owner of Berkshire Hathaway Warren Buffett
Motley Fool Take Stock

Buffett's latest thoughts on business, investing and Berkshire

Whenever Warren Buffett speaks, or writes, I pay attention.

Read more »

Businessman working and using Digital Tablet new business project finance investment at coffee cafe.
Motley Fool Take Stock

Ignore forecasts (and guidance)

Think like a business owner, not a speculator.

Read more »

Businessman at the beach building a wall around his sandcastle, signifying protecting his business.
Motley Fool Take Stock

Invest like a Roman general

Humility is something to be cultivated in all walks of life.

Read more »

wooden block letters spelling DCA
Motley Fool Take Stock

The beauty of dollar cost averaging

Because it’s Friday. And I’m going to cover some investing fundamentals. But you knew that.

Read more »