The New Normal? Kinda like the Old Normal…


It’s one of the great headlines: “Beer, cigs up”.

And, as any smoker or drinker knows, it’s one that could be applied regularly, as government taxes increase in line with inflation.

Which, as you might know, is kinda high right now, leading to headlines suggesting that we might soon have to pay $15 for a pint.

Now, I’m not sure, but I think if anything is unAustralian, it’s four beers costing more than a Pineapple.

Yes, yes, I hear the harm minimisation angle, but apparently we pay double the grog tax the Kiwis pay, around 6 times as much as the Poms, and a staggering 15 times the amount they pay in Germany – the home of beer.

Am I talking out of my ‘kick’?


I don’t mind a quiet beer from time to time.

But there are legitimate questions to ask about whether beer tax (and fuel tax, for that matter) are the right ways to fund government spending in this day and age.

Once upon a time, trade excises were the best, most reliable way to raise revenue – when hiding income was easier and computerisation was a pipe dream.

That was the 1800s.

These days? Well, let’s just say we’ve moved on (and in the case of petrol excise, there won’t be much to tax in 10 or 15 years!).

But the beer tax palava also asks questions about rising prices in general.

Beer tax isn’t a consideration for the RBA when discussing interest rates, but the same forces are at play in both cases.

The Reserve Bank put rates up on Tuesday. The Big Four banks finally followed, yesterday.

And there’s almost-certainly more to come.


Meanwhile, we’re in the opening salvos of earnings season, where companies will give us a look under the bonnet – and one of the key things to keep an eye on is how well – or otherwise – they’re dealing with inflation.

I’m regularly asked ‘How are you investing in this time of…’.

At the moment it’s ‘…inflation and rates.’

In the past it was high valuations.

Before that, it was COVID.

And so it goes.

My answer is boring – and probably doesn’t help me get invited back on those programs!

I haven’t changed my investing strategy in years.

Oh, I’ve learned some things. And modified my approach accordingly.

But I’ve never taken a ‘…this time of…’ strategy.

For example, I’ve always liked businesses with strong brands and pricing power.

Sometimes that’s not what the cool kids are investing in, and sometimes those companies can be out of favour.

But ask yourself how the ‘hot stocks’ have performed recently.

You know, the ones that people loved because they were ‘cool’, no matter how good or bad their financials looked.

Remember when everyone wanted to buy buy-now-pay-later stocks?

Or lithium miners?

Or whatever.

No, I’m not saying they can’t or won’t come good.

Some probably will.

Some, well… won’t.

I’m a bit old school. I like profitable companies.

Not exclusively – I’ve recommended loss-making companies where I think there’s a clear path to profitability – but mostly.

That doesn’t get me invited to the ‘hot stock’ forums or panels.


Meanwhile, shares in a company I own, Berkshire Hathaway, are up 62% over the last 5 years.

Another, Washington H. Soul Pattinson, is up 52%.

Amazon (ditto) is up 171%.

Oh, they’re not all winners – I’ve lost some money, too.

Have other companies gained more over the last 5 years? Absolutely.

Would I have liked to own them? Sure, if I’d have known, in advance, what might happen.

But that would have required luck. And, in some cases, blatant speculation.

Hey, someone wins lotto every week, too, right?

I looked silly for a while, eschewing buy-now-pay-later.

Afterpay shareholders got a Godfather offer from a US payments company and – if they’d sold, rather than taking shares in the deal – got very, very lucky.

Others, who bought shares in competitors are down 84% over the last year (Zip), 86% (Sezzle), or 76% (Openpay).

There were others.

No, I’m not raining on their parade.

I’m not rubbing it in.

But I am making the point that, at certain times, a ‘boring’ investment strategy can look hopelessly out of touch.

One business magazine, in 1999, famously asked ‘What’s Wrong, Warren?”.

They were, of course, talking about Warren Buffett, whose company, Berkshire Hathaway that I mentioned earlier, had not only avoided investing in tech, but had suffered serious share price falls as investors abandoned it.

They were investing, instead, in high-flyers.

We know how that ended.

Unfortunately, investment memories are short.

Maybe it’s the seduction of seemingly quick, easy wins.

The challenge of watching other people get rich and not being able to resist joining the party.

Of ‘this time it’s different’.

Sometimes, it is different.

Amazon made it through the carnage and went on to bigger and better things.

There will be winners from the current tech slump that will look cheap, today, in hindsight.

Hopefully, including a couple I own.

But I own some boring businesses. Ones that tick away, compounding in the background.

They’re not going to be ‘hot stocks’ any time soon.

But they’re slowly, surely, growing.

Some have been ‘’hot stocks’, but have fallen to Earth.

And I’m okay with that, too.

Because I didn’t buy them because they were ‘hot’.

I bought them because I think they’ll be bigger, better and more profitable in 5, 10 and 15 years.

I plan to own the vast majority of my current holdings well beyond 2037, if they continue to perform.

And if they do?

Not only will the compound returns be great, but I’ll have avoided brokerage, capital gains tax and the challenge of finding better companies to replace them.

I’ll keep adding money to my portfolio regularly, too – sometimes buying more of what I already own, sometimes buying shares in companies I haven’t owned before.

Some years will be great.

Some will be ordinary.

But over the long term?

I reckon it’ll be pretty boringly wonderful.

Which beats ‘exciting, but mediocre’, don’t you reckon?

Fool on!

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