Permanent Equity: Investing in Companies that Care What Happens Next

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¡Adios Amigos!

The Ramones released ¡Adios Amigos!, their last album, in 1995, nearly 20 years after they released their debut, Ramones. Johnny Ramone, the band’s guitar player, rated it a B+ saying, “Some of our albums would have three or four really strong songs, and then the rest would be pretty weak. But on this one, even the lesser stuff is decent.”

(And I hope that you would at least say the same about this third season of Unqualified Opinions.)

The reason this is relevant is that one fascinating video you can find on the internet is a 16-plus minute compilation of The Ramones playing their hit “Blitzkrieg Bop” over the years at faster and faster tempos. What started as a 175 beats per minute jam in 1975 accelerated to a 252 beats per minute screamer by 1996. That’s fast! And it’s relevant because it’s a simple-but-elegant illustration of a point I’ve been meaning to write about for a while, but haven’t been able to find a way to do so without it seeming didactic.

Namely, that there is no substitute for reps.

How do you play “Blitzkrieg Bop” at 252 beats per minute? By playing it for 20 years straight at less than 252 beats per minute, but pushing the envelope a little bit more each time you do.

How do you find more than a few mushrooms? By spending years looking for and not finding them.

How do you build a portfolio of good investments? By analyzing thousands and thousands of bad ones. 

This, of course, isn’t a new idea. Even since before author Malcolm Gladwell coined the “10,000-hour rule” in his book Outliers, everybody knew that (deliberate) practice (informed by feedback) made perfect. Yet I’m always surprised by the frequency I turn to Brent or someone else in the office and we say almost simultaneously, “Huh. It turns out reps matter.”

Because most things are not rocket science. If you show up, put in the effort, and learn from failure and feedback, I all but guarantee you will develop an enormous competitive advantage in your chosen field. You, in other words, will be playing “Blitzkrieg Bop” at 252 beats per minute when everyone else struggles to get over 200.

There. That’s my observation that reps matter. It still seems didactic, but since this is where I am going to end Season 3, unsubscribing will do you no good. Yes, I know we published through Memorial Day last year, but we’re hosting our first ever Partner Summit in Columbia, Missouri, next week on Monday and Tuesday and then a few hundred more people for the fifth annual Capital Camp on Wednesday and Thursday. In other words, next week is pretty chock full and then the lazy days are here. But if you’re looking for a more dramatic finale than this one, go back and read Day 2. A bunch of people told me it made them cry.

Have a great summer and thank you for reading and writing back.

-Tim


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