#29. You don’t invest on a generational timescale
January 5, 2026
You cannot invest in generational timeframes. There is no reliable generational thesis or company. Capital endures. Companies do not.
There’s something very sexy about saying you invest on a generational timescale. Mere mortals who think in days or quarters cannot comprehend investing for such a long period of time. Existence over the next 18 months is assured, why even think about it. *Generations*
Oh did my investment miss earnings? I still see something nobody else sees over *generations*
That sounds amazing.
So how do you invest in generations?
You don’t.
You can’t.
Not like that.
Don’t long term investors invest in generations? No. They don’t.
And this is not to dunk on naïve literalism. Serious investors use “generational” as shorthand for capital that does not need to resolve itself quickly. So what does it mean to invest in generations? The coffee can approach ad infinitum? Pick a stock or a basket and hold it forever. Know you’re right. Right about what? The management team, organizational structure, and market will all not exist the same way (or at all) in a generation.
When investors talk about “generational” technology (AI today), what they usually mean is five to ten years. That’s the outer boundary of institutional patience. Everyone claims patience. Structure reveals how much they actually have. And, for the majority of our financial world, the answer is very little. Time horizons matter here because they reveal the structures that no company can plausibly survive unchanged.
In order of increasing patience we have:
Public company CEOs (non-tech): 7 years. That’s the average life span of a public CEO. And this is generous because public companies, famously, don’t think in decade-long time frames. Incentives are tied primarily in quarters and secondarily in years. Nobody’s risking incentive comp to build a product your granddaughter will appreciate when she’s your age.
Venture funds: 10 years. Despite claims of funding generational companies. Effective company exposure is max 12-15 years (~15-year extended fund life minus 5-year active investment period).
Big tech CEOs: shockingly, they have longer time horizons than that (I didn’t expect that when I began this). The non-founders tenures (Sundar: 6 years, , Satya: 11 years, Tim Apple: 14 years). Founder tenures go further still. With dual-class shares and voting control, founders like Zuck can absorb years of criticism, rewrite strategy midstream, pivot to and then away from the metaverse, and pursue bets that would get a professional CEO fired.
At first glance, founder-led companies look like genuine generational investing at the company level. It isn’t. Founder discretion can only go so far. A founder-led platform company can survive a failed bet, years of margin compression, even a strategic detour that looks irrational. But not repeated, foundational capital misallocation. Even the most powerful founders operate under that bargain. Control lengthens the leash; it does not remove it.
When investors say “generational,” they don’t mean a century-long holding period. Ok. But they do mean capital that doesn’t need to resolve itself quickly. And even this softer definition still assumes a stability at the company level that does not exist.
Long-term capital exists. It can persist across centuries. It exists in families, endowments, institutions. But long-term homes do not. Not structurally. Not historically. “Long-term investing” quietly conflates the two. Over a generational horizon, systems survive and compound while firms decay.
But (I hear you say) an investor with an infinite time horizon could do it. They exist (I know). In theory, yes. If you were a forever investor generations ago, which would you pick?
Well, maybe you’d pick Bank of New York Mellon. Founded in 1784, started publicly trading in about 1792. 230 years is generations, no? Yes! Winner!
Early American markets already contained dozens of banks, insurers, and trading enterprises. Many of them well-capitalized, politically connected, and widely held by the standards of the time. BNY as the proof of durability is like pointing to Jeanne Calment and saying humans live to 120. For context, the Dow Jones Industrial Average was created in 1896. None of its original components remain in the index today, and only one (GE) exists at all.
I would also add Coca-Cola, P&G, Cargill, and Exxon. All trace their roots to the late 1800s. I would have gladly invested in their early offerings with my Time Machine brokerage. They are amazing examples of companies that have endured by adapting.
But that’s also the difficulty in picking these ex-post. It looks inevitable after the company survives. The Coca-Cola of 1920, 1970, and today are not the same beasts. What has (amazingly) persisted was not a single compounding advantage, but an organization capable of serial reinvention. That distinction matters. Generational endurance such as these is visible only in hindsight. It cannot be reliably selected.
And not only is it nigh impossible to pick generational winners, but it’s become increasingly less likely that any will exist. Take this from BofA:
“Roughly a third of the S&P 500 has been replaced since 2015. In 1958, the average seven-year rolling lifespan of a company on the S&P 500 was 61 years. By the 1980s, it had dropped to 30 years, by 2016 it was 24 years, and by 2021 it was 16 years. If we continue on this road, by 2027, companies could last just 12 years.”
Multiple studies converge on the same conclusion: the typical public company now lasts a fraction as long as a human life. Could you confidently bet on any single name to exist in generations? Buying today’s S&P for the next generation is not a bet on today’s companies (US life expectancy = 79 years, average S&P tenure = 12-16 years). Unfortunately, if you were hoping to invest at the company level for generations, the traditional route, public markets, increasingly deny you that opportunity.
To their credit, index investors don’t care. They buy a system they can hold “forever,” even if they don’t admit it. Even still, indexing does not solve the forever problem. It solves for survivorship only, but the index still taking a direction (S&P 500, US, Equities) that preserves the stated exposure rather than evolving to what the forever timeframe might require. Forever portfolios still require governance.
So.
Human life expectancy (US) = 79 years
Average S&P tenure = 12-16 years
You will outlive most companies you invest in. Your grandchildren will outlive almost all of them. The crux of the issue with our generational investors is nothing financial, but human fallibility interacting with long timelines. I get excited about generational technologies. I get excited about the companies that build them. But don’t conflate that with buy and hold forever. The durable object when investing with an enduring mindset is not the firm. Investing with a “generational” mindset is to have the capital allocation logic that continuously adapts.
“Forever” belongs to systems, not tickers. If you believe companies endure, buy stocks. If you believe capital endures, design systems. Most modern institutions understand this distinction. But they are not built to act on it.
