There are two primary routes from Southwestern Florida to Orlando.
The first is the long asphalt stretch of Interstate 75 to the immense traffic jams that blister Interstate 4 from Tampa to DisneyWorld.
Option two is a sun-kissed drive through the heart of Central Florida's citrus groves.
The three-hour trip takes you along winding roads through quaint towns like LaBelle and Lake Placid. These are places that time has forgotten - where locals refer to that intersection where the grocery store Publix meets the T-Mobile store as "downtown."
From October to May, you'll see long stretches of orange and grapefruit trees, the processing plants for all that citrus, and tiny fruit stands and markets where you can load up on local produce.
We've made this trip several times in recent years, and each time, we notice the long arm of "progress" chipping away at the agricultural real estate.
More orchards are going up for sale... and property developers are happy to snap up acreage to build the next self-sustainable Margaritaville retirement community.
Who can blame the farmers for taking the money?
Citrus farming isn't the easiest job in the world.
It takes more than just overlooking trees.
These farmers must understand climate, irrigation, soil quality, and disease/pest management. They need access to resources (especially capital) in a highly industrialized and competitive market.
It takes a hedge fund manager's knowledge to navigate market conditions and hedging strategies properly. Oh, and be sure to be on the lookout for Mother Nature... as hurricanes are a natural enemy of the orange groves. Farmers are increasingly tapping out, and orchard sales have accelerated over the last two decades.
Since 2000, the number of acres dedicated to orange growing in Florida has declined by more than 50%. According to the US Department of Agriculture, there are now just 300,000 acres remaining.
The trend brings new meaning to the lyrics of Joni Mitchell's Big Yellow Taxi.
"Don't it always seem to go
That you don't know what you've got 'til it's gone
They paved paradise, put up a parking lot."
An Underrated Metric
This week, I sat down with new friends and colleagues to discuss the makeup of great public businesses. I'm talking about the companies that continue to grow their book value, increase their earnings, and expand into new markets successfully.
If we look out into the ether of the financial publishing world, there are many different metrics that analysts will point to as a great starting point to assess an opportunity.
Perhaps it's Price to Earnings.
Maybe it's using the F-score to analyze financial discipline at the board level. Perhaps the company can grow its book value over several years... Others might look to Peter Lynch models, insider buying activity, or activist screeners.
But don't overlook one metric that stares you in the face: Longevity.
If you're like me, you remember opening the business section of a newspaper decades ago. There, you'd find many of America's unstoppable businesses that have endured not just years... not just decades.... but in some cases, centuries.
That's why the founding date of a public company is a very important number when looking for long-term investments that can meet the standards of many of the metrics listed above.
Great businesses thrive not for a short time. They thrive for a long time.
It's easy to fall in love with the latest IPOs and the tech darlings... to get swept up in the latest trend or reverse merger.
But if you're serious about long-term investing, you don't need to reinvent the wheel.
You should look to companies like John Deere (DE) (founded in 1837), Coca-Cola (KO) (1892), McDonald's (MCD) (1940), and Proctor & Gamble (PG) (1837).
I know this might sound like the most obvious thing in the world - but it's true. And too often, this simple fact goes ignored by investors.
These companies have endured for a reason - they are great businesses selling great products with robust demand. They have thrived in good times like the 1990s and 2010s.
But they've also endured tough times: global wars, 1970s inflation, market crashes, and that era of the Spice Girls.
Such historical resilience is an attractive asset, as are the qualities that tend to come with growth over time: long-term brand recognition, global footprints, strong cash flow, quality management, technology/innovation, growth potential, and a legacy and heritage that aligns investors with core values.
Time is a quantifiable measure.
Don't be afraid to use it before qualifying every investment opportunity.
Stay positive,
Garrett Baldwin
Secretary of Defense