Friends,
Let's travel back to April 1998. American football star Payton Manning has just been drafted #1 by the Indianapolis Colts amid midtown Manhattan hoopla. The son of NFL royalty, folks had crowned Manning the Next Big Thing since high school. He signs a market-shattering rookie contract.
At the same time, there's a skinny sophomore in Ann Arbor, Michigan, who believes he'll have a chance to start at quarterback for the University of Michigan next year...until a phenom freshman joins the team -- threatening that dream.
Two years later, that skinny kid was taken in the last round of the draft with the 199th pick. In his rookie year, he earns the league minimum, is fourth on the depth chart at QB, and throws just 15 total passes.
By now, you know we're talking about Tom Brady -- arguably the greatest football player ever.
While Payton Manning is no doubt on the Mount Rushmore at his position, he isn't considered better than Brady. Of course, the results speak for themselves: Brady won 7 Super Bowls to Manning's two.
But there might be another factor at play: Brady's expectations were consistently lower than Manning's.
Indeed, there's a price to pay for high expectations.
How does that connect to investing? Consider that all three of us Brians have one single stock that's among are largest holdings: Mercadolibre.
None of us backed up the truck on the stock. We just entered it over ten years ago, and have watched it grow (occasionally adding shares) along the way.
But here's the key: we've never considered Mercadolibre to be wildly overvalued at any point during this run.
Investors have long penalized the company for operating in geographies -- Mexico, Brazil, Argentina -- where political instability was an unquantifiable risk. Everything that's happened in Venezuela so far this year underscores that potential for volatility.
While that perception might have been frustrating for us along the way, it had a hidden benefit: no matter how large our Mercadolibre allocation grew, we were never tempted to sell shares based on valuation.
And that dynamic -- solid execution paired with low expectations -- is a recipe for fantastic long-term results.
We think there's a secret in there for investors (and humans): aim to be great at what you do, but don't draw too much attention to yourself. Jumping over continually reasonable bars is great for both momentum and longevity.
|
|
Brian Feroldi, Brian Stoffel, & Brian Withers
Long-Term Mindset
P.S. Follow Brian Stoffel's new Youtube channel that will cover earnings, his portfolio moves, and more by clicking here.
|
