How Long Is Long-Term?
The average investor only holds onto tech stocks for an average of eleven months because new tech-forward firms so often disrupt each other. However, there’s a fund in Japan which is willing to ride their turbulence for three hundred years, but it’s dividing opinion!
A long-term stock pick could reasonably count for a year, five years, ten years, or perhaps even thirty years if the underlying business stayed sound. However, while the rest of us don’t even know what’s for tea tonight, Son Masayoshi’s Softbank is planning three centuries in advance with some of the biggest tech investments you’ve ever seen. You can’t fault the ambition of his ‘Vision Fund,’ but surely this is a marketing stunt!
Masayoshi is using whopping sums of borrowed money to invest in companies that don’t even turn a profit yet. It sounds crazy when you put it that way, but to his credit, Softbank did get into its positions early and has a stellar track record so far.
Softbank is well-positioned for when artificial intelligence takes over the world, but Masayoshi’s 300-year plan could still go down the tubes if a recession comes first. Most companies die within a decade, fewer live beyond the lifetimes of their founders, and fewer still are in growth mode a hundred years after that. Masayoshi is smart to be thinking long-term, set to benefit from the eighth wonder of the world, compounding! However, he may need more than technology at his back if he wants to avoid being leapfrogged along the way.
Chances are, he’s dart throwing. So, what would you tell him if you were his financial advisor? There’s more to the markets than technology hotshots, and a hundred years spent with an index fund wouldn’t lose him any money, but what about land? They’re not making that anymore!
