Old Fashioned Cocktails and Growth Stocks

In his new book, Taste, My Life Through Food, actor Stanley Tucci tells this story: the first evidence of a drink called a cocktail comes from Hudson, NY in the year 1810. Some imaginative bar keeper began recommending a whiskey drink that included bitters. Heretofore, alcohol was served straight, according to Tucci, although I find it hard to believe that no one had mixed whiskey with anything before this time! However, after the birth of the “cocktail,” bars around the country, and then around the world, began to offer drinks that were variations of the original cocktail, using more and varied ingredients until people began to ask for a cocktail “The Old-Fashioned Way” and that’s how we came up with the name of my libation of choice, The Old Fashion. A little more research tells us that the name cocktail was in reference to horse owners cutting back the tails of all horses except thoroughbreds, so a drink that wasn’t pure alcohol was referred to as a cocktail. I’m not sure why I thought you needed to know this fact, except that maybe societal change can come from almost anywhere. Cocktail parties (now an old-fashioned term itself) were once the vanguard of current culture, just as the much-dreaded Zoom call is today.

Change happens.

As a fan of growth stocks, I’ve watched societal changes come from unlikely places like the former orange groves now called Silicone Valley, or a global delivery company based in Memphis or shopping on something we now call the on-line. The world changes around us and it is hard to know which changes are seminal and which are fads when you are in the middle of the change. When investing for growth, technology is our friend and our rival, new technology represents not only an opportunity but a glimpse of the creative destruction that is necessary to move forward.

When I began my professional investment career, for example, cable TV companies were assumed to be a permanent part of our society, and they were, until the technology came along to allow cord cutting. Today I watch television from an internet app built into my TV, I’m not a cable TV customer, although I now buy my office landline and mobile phone service from a cable TV company.  The world evolves and growth investors are required to stay alert. Remember taking pictures with a Polaroid camera? Polaroid was once considered a one decision (buy) stock, it was assumed that you could buy it and hold it for life, no one could imagine a world in which instant photos, right from your camera, would ever be obsolete.

As an advisor who invests people’s retirement money, I can’t afford to be very wrong very often, so I must find growth opportunities that are more than fads, I aim to find companies that have proven business models, excellent management, and revolutionary technology- which means I pass on a lot of stocks. I like growth, but I like not crawling out on a limb too far, I’m a student of the “GARP” school of investing (Growth at A Reasonable Price). As equity holders, we are often paid to endure volatility, that’s why time is our biggest ally and finding innovation and new technology requires constant research and attention. Trying to fit appropriate growth opportunities into a portfolio that matches my clients’ goals and risk tolerance is not as easy as it might sound and I’m lucky to have found a career that matches so well with my generally curious outlook on life. 

 Now I’m going to snap a few Polaroids, send a telegram, and have an Old Fashioned.

Merry Christmas,

Rick DiBiasio CFP (TM)