What getting older has taught me about P/E ratios 🎂
Life doesn't stop, and neither does the corporate pursuit of earnings growth 📈
On Sunday, I celebrated my birthday. And as one does, I used the timing to reflect on the state of things in my life.
I feel blessed that I can say things have never been better. I’m surrounded by a wonderful group of family, friends, and colleagues. I’m in good health. I’m financially independent, and I’m on track to reach my retirement goals. And with TKer, I’ve got a nice small business, thanks to the support of my growing number of subscribers.
But things weren’t always this good. Far from it.
As I mentioned in last week’s “Facts vs. Feelings” podcast (links here), my career in finance writing was interrupted when I was laid off from Forbes in 2010. Finance media was in pretty terrible shape at the time, and I joined a growing pool of jobless writers pursuing a shrinking number of opportunities. I was unemployed for about two months before I was lucky enough to find a stable and relatively high-paying job, but it was outside media.
With the little free time I had outside work, I continued to read up on markets. Occasionally, I blogged about it. It’s what I loved to do.
My 29th birthday quickly approached, and — as one does — I used the timing to reflect on the state of things in my life. I was not satisfied. I knew that the longer I was outside media, the harder it would be to get back in.
So I made a decision, and on April 8, 2011 — the day before my birthday — I walked away from a stable job with benefits to become a freelance finance writer. For the next five months, I got paid next to nothing writing pieces for a handful of websites. Things were tough. It was a financial disaster. I even had to make a big withdrawal from my retirement savings, an ill-advised move that came with a big financial penalty.
That September, I got a job with Business Insider’s markets team, earning far less than I did at Forbes. But from there, my career went up and to the right for the next 10 consecutive years, much like the stock market. (Shoutout to the bull market.)
In 2021, I once again found myself reflecting on the state of things in my life. Working in upper management at Yahoo Finance paid very well, and it was very rewarding working with reporters and editors at the highest tier of the profession. But I wasn’t spending much time writing, which was the whole reason I got into this business to begin with.
Five days after my 39th birthday, while I was vacationing in the Bahamas, I got a phone call from Axios about writing their markets newsletter. It was the exact opportunity I was itching for. I took a big pay cut and wrote it for four months before taking an even bigger pay cut to start TKer in October 2021.1
Before we move on, let me be the first to say that luck — both good and bad — is woven into every aspect of my timeline. A lot of things happen to all of us that are far beyond our control.
That said, I had two epiphanies from all this:
I won’t stop getting older, and the world won’t stop moving forward, which means I have to be mindful about life decisions I may be putting off.
Really good long-term outcomes can come out of what seem like very costly short-term decisions.
Believe it or not, these takeaways can help inform how we think about price/earnings (P/E) ratios.