As I type this, I've got a can of Coca-Cola No Sugar open and within reach.
If you've read my pieces for any length of time, you'll know that's not exactly unusual for me.
It's true that I'm a fan of the beverage.
I'm also a fan of the company that makes it.
The Coca-Cola Company (NYSE: KO) dates back to the 1890s when the black stuff was first invented, and pumped through 'soda fountains'.
You can still get what we now call 'post mix' Coke at fast food restaurants, cinemas and the like the world over. But most of our consumption these days comes from cans and bottles.
That can was open (and being consumed) when I joined an ex-Fool (and still valued friend-of-the-Fool) Owen Raszkiewicz, for an episode of Rask Live.
At the end of the episode, Owen asked me whether I was optimistic about the future of long-term investing, and how I'd suggest his viewers could remain optimistic in the face of our current economic malaise.
It was simple, I told him. If you could be a student of history for just a little while. If you could chart the steady, upward, and (stonkingly incredible) compound returns of the stock market over the last century- and-a-quarter.
No, not every day. Or week. Or month. Or year.
But over the long term.
We haven't passed capitalism's peak, I suggested, and so it was reasonable to expect better returns in future.
There were no shortage of times in the past when people wondered if it was all over. World Wars. Oil Shocks. Countless recessions. Market crashes. Terrorism. And the ceaseless, breathless, negative headlines, perhaps bettered only by the ceaseless, baseless, predictions of market doom.
Instead, markets have continued to flourish, over the long term, despite all of those things.
And you think that the music will finally, somehow, stop… this time?
I mean, anything is possible. No guarantees from me. But of the risks, I think the risk of *not* investing clearly trumps the downsides of actually investing, sensibly, in a diversified portfolio, using the power of dollar-cost-averaging.
Speaking of the end of growth, I was re-reading The Essays of Warren Buffett last week.
In it – a compilation of his letters to Berkshire Hathaway shareholders (I'm one, for the record) over the past 45 years – Buffett relates a story about Coca-Cola, excerpted from his 1993 Letter to Shareholders:
"In 1938, more than 50 years after the introduction of Coke, and long after the drink was firmly established as an American icon, Fortune did an excellent story on the company. In the second paragraph the writer reported: "Several times every year a weighty and serious investor looks long and with profound respect at Coca-Cola's record, but comes regretfully to the conclusion that he is looking too late. The specters of saturation and competition rise before him.
"Yes, competition there was in 1938 and in 1993 as well. But it's worth noting that in 1938 The Coca-Cola Co. sold 207 million cases of soft drinks (if its gallonage then is converted into the 192-ounce cases used for measurement today) and in 1993 it sold about 10.7 billion cases, a 50-fold increase in physical volume from a company that in 1938 was already dominant in its very major industry. Nor was the party over in 1938 for an investor: Though the $40 invested in 1919 in one share had (with dividends reinvested) turned into $3,277 by the end of 1938, a fresh $40 then invested in Coca-Cola stock would have grown to $25,000 by yearend 1993."
It is absolutely natural to worry that, after a successful run, a company – or the whole stock market – might have reached its eternal peak.
But, for my money, the stock market in particular (and probably Coke, too) has a long, long way to go before we can talk of the peak of capitalism, or indeed of human endeavour.
Is it possible we've passed it? I guess.
But not likely. Not only have we not passed the end, but I don't think it's even close to nigh.
For my money – literally – shareholders investing money today to create or add to a diversified portfolio of quality, well-priced businesses have a very bright future to look forward to.
That was true in 1938. And in 1993. And, I think, in 2023.
That's something we can all drink to (Coke No Sugar, or otherwise)!
Fool On!
