Ruminations on the glass being half full and sunsets

Aweh, My Dearly Beloved Fellow Ruminants & Groupies

The eternal question: Is the glass half empty or half full? It’s one of those queries that smug optimists love to wield, assuming they already know the “correct” answer. And most likely, dear reader, you think you do too. But let’s be clear—asking this question can feel like a microaggression from the “glass-half-full” brigade, those relentless cheerleaders for optimism. “Optimists are nicer to be around, more successful, and generally better humans,” they’ll tell you, smugly humming, “ Don’t chew on life’s gristle, just give a whistle and always look on the bright side of life”

But we ruminants don’t settle for superficial answers, and this silly question deserves a closer look. The proper answer, of course, is that it depends.

If you’re a card-carrying optimist, you might want to skip this week’s blog. I’m probably about to annoy you more than usual.

Let’s start with the metaphorical hourglass that’s running out for me and my beloved pink cow. Is it half full? Half empty? Neither. Mine’s about three-quarters empty.

Why? Well, I’m 63. The odds of me reaching 126 are slimmer than a supermodel on a juice cleanse. The sands of time flow in one direction, and no amount of positive thinking can change that. The optimists might argue that my hourglass is still one-quarter full, but let’s face it—that’s delusional.

And yet, here’s the twist: the same ticking clock applies to everyone. Donald Trump’s hourglass? Jacob Zuma’s? Probably nine-tenths empty. Humanity’s hourglasses run out so that renewal can happen. Out with the old, in with the new. It’s not pessimism; it’s a reality check. Society is bigger than you or me, and sometimes a sunset is what we need to make room for a new dawn.

So, we all face demise and often the process is difficult for you and those that you leave behind. Perhaps if you are an optimist, you can just ignore this reality until you can’t.

Let’s now move from death, doom, and gloom and apply this to investing. Surely, investing offers a rosier view? Isn’t the glass always half full here? Well… yes and no.

Over the long term, the S&P 500 index has delivered an average annual total return of about 9% (nominal) or 6.8% after inflation from 1996 to mid-2022. That’s incredible, and I’m enormously grateful for it. But let’s dig deeper.

Most glasses are half empty. Research shows that a small number of high-performing companies drive most of the index’s returns. The average company doesn’t create lasting value; it fizzles out.

Turnover is brutal. In 1958, the average lifespan of an S&P 500 company was 61 years. Today, it’s less than 18. Only 69 companies from the original 1957 index remain today. Most businesses—like people—eventually reach their sunset phase.

So yes, the glass of the S&P 500 as a whole is half full and filling. But more than half of the individual glasses within it? Half empty, or entirely drained. The secret is to find the overflowing glasses—and drink deeply. Or, if you are lazy and ignorant like me, just buy the whole index and don’t pretend to know which glasses are half full.

Just as I’m in the sunset phase of my life, so are most companies in the S&P500. Beware those who assert with certainty that the sunset does not apply to them.

Imagine sitting at a bar, staring at a drink that’s only half there, and someone pipes up, “Hey, at least you’ve still got some!” Yes, but do you know what would be better? A full drink. A bottomless drink. So, next time someone chirps about a half-full glass, remind them: “That’s great, but wouldn’t it be even better if it were overflowing? Aim higher!” Most of the glasses in the bar are empty but a few are full. If you were wise enough to have invested in the S&P500 you can afford to buy as many full glasses as you like while enjoying the sunset.

And if there’s one glass that’s half full, it’s my family. Whether it’s laughter at the dinner table, shared struggles, or an argument, the sun is not setting on our family.  

Life is short, and the hourglass never stops. You can spend your time debating how full the glass is—or you can raise a toast to the moment. Sunset phases, three-quarters-empty glasses, or even dry ones—there’s always something to enjoy if you’re paying attention.

Can you stop the sun setting? Ah well, that depends on whether the glass is half full or half empty. Would you enjoy the sunset if the sun does not set?

Cheers to the sunset, the hourglass, and whatever’s left in your glass.

Thanks for the feedback, as always.

Regards

Bruce