Making money… the old-fashioned way

I can't stress enough how important I think it is to find quality people with old-fashioned values.

| More on:
a woman explaining information to an elderly couple about finance

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

Sometimes, investing can feel really hard.

Share prices are volatile.

The headlines are screaming about the next big crisis (allegedly) on the horizon.

Company earnings are uncertain, thanks to economic conditions, competition, or growth concerns.

And add valuation on top of it.

More than one investor has looked at that combination and walked away.

Now, I'm absolutely here to tell you that, in my experience and the experience of many others, the effort can be more than worth it.

But if you're still not convinced?

Well, sometimes investing isn't that hard at all.

You could simply dollar-cost average (buy small amounts regularly) into a small handful of low cost, broad index-based ETFs.

That'll give you the market return, less a tiny amount in fees, for no effort other than saving a few bob, opening a brokerage account, and placing regular trades (some brokers even offer the option of automating the buy trades for you!).

'Simples', as the meerkat would say.

But let's say you want to find a middle ground. You want to keep it relatively simple, but you want to try to find some market beating investments.

Now, books (and books and books) have been written by people who try to tell you that they have some sort of secret formula.

I'm not going to do that.

But I am going to share an example with you.

It's a company I've owned shares in, for years.

A company I like very much, for reasons that'll hopefully become clear.

And a company that can boast a long-term market-beating track record, share price-wise.

The company is Washington H. Soul Pattinson and Co. Ltd (ASX: SOL).

You're already bored, huh?

What sort of name is that?

It has all of its vowels, for starters. The capitals are all in the right place.

This isn't wshgtnhslpttnsn.

It's not a lithium miner. Or a bitcoin startup.

It isn't some microcap moonshot.

It's the second oldest company on the ASX.

Bore. Ing.

Unless you like money, that is.

There's no celebrity CEO here.

No slavish fanclub of acolytes and evangelists.

Instead, it's headed by Robert Millner, an old bloke (sorry Robert), who is the fourth generation of the same family to run the company.

Bored again? Remember: money.

Because Soul Patts, as it's known, has beaten the market over almost any timeframe you care to mention over the past two decades.

Sure, you can have exciting if you want.

Or you can take market-beating returns.

Why am I telling you all this?

Well, first and foremost, I like our members and readers. And I'd like to help you make a quid.

No promises and no guarantees, but, as I said, I own shares. On top of that, it's a company I've recommended more than a few times to our members.

But also because, whether you're new to investing or have been around the proverbial block a few times like I have, I wanted to share an article I read the other week.

The bloke I mentioned above, Robert Millner, was featured in the cover story of the Australian Institute of Company Directors' most recent magazine.

And while nothing I read in that article was new to me, it was also a reminder of the basics of smart, sensible investing.

So I wanted to share it with you.

Here are some short highlights, in his own words:

"We are very honoured to be spoken about in the same breath as Buffett and we are a very similar type of business, even if his scale is a lot larger. We are long-term investors"

and…

"So you can genuinely wait, be patient and, as Buffett would say, be greedy when others are fearful. Sometimes, we've sat on $1 billion worth of cash"

and…

"The people before me have always been conservative and well- mannered."

His son, Tom, a fellow Soul Patts director, added:

"If you don't know enough about something, try to find it out, and if it's still above you, don't invest in it… you're probably better off putting your money elsewhere"

and…

"Don't tell shareholders what they should do if you don't do it yourself. Put your money where your mouth is."

At this point, I'll stop. I don't want to overstep, and use too much of the AICD's intellectual property by copy/pasting too much more of their article.

It's a great profile. I suggested the Motley Fool investment team read it in full. I'll suggest the same to you. You can find it here.

Soul Patts is one of my largest personal shareholdings. Berkshire Hathaway, which Robert Millner indirectly mentions in one of the quotes, above, is another.

I can't stress enough how important I think it is to find quality people.

Not flashy people. Not charismatic people. Not people who talk a good game.

But – and this is not cool these days – quality people with old-fashioned values.

Not outdated values. Not the stuff we were right to leave behind.

But things like the importance of hard work. Of treating shareholders' money as your own. Of doing the simple things right. Of humility, honesty and common sense.

That won't get me any marks on TikTok. It won't get me invited into the cool kids clubs. It won't make headlines in the AFR.

And that's 100% fine by me.

I'll be at the other table. The one where the people let their results, not their egos do the talking. And where they ignore what's 'cool' and do what's right.

And I'll be investing in the businesses run by those people. I have a hunch that when all is said and done, making money will beat being cool.

Fool on!

Motley Fool contributor Scott Phillips has positions in Berkshire Hathaway 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 Berkshire Hathaway and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Berkshire Hathaway. 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

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 »

Cubes placed on a Notebook with the letters "ETF" which stands for "Exchange traded funds".
Motley Fool Take Stock

Not all ETFs are the same… and that's a problem

ETFs are great… right?

Read more »

A man and a woman sit in front of a laptop looking fascinated and captivated.
Motley Fool Take Stock

Lessons from a $600,000 share price

Today I’m going to aim straight down the investing fairway.

Read more »

Woman and man calculating a dividend yield.
Motley Fool Take Stock

Unpacking some big economic changes

January was pretty busy.

Read more »