The US Securities and Exchange Commission Rule 156 requires mutual funds to tell investors not to base their expectations of future results on past performance before they invest.  It is advice well heeded.  The current pace of technological innovation and disruption may appear faster than ever.  But it is in fact nothing new.  Change has been a fact of society, business and investment from the beginning.

Great businesses and great fortunes have always been built by finding new markets, products and services and profiting from them.  Our changing ways of live and our preferences as consumers have always been a source of opportunity for some companies and a threat to others.   Take Nestlé.  It had its origin in 1867 when Henri Nestlé developed a breakthrough infant formula combining milk, wheat flour and sugar to provide nutrition for infants, in response to the societal changes brought on by the industrial revolution, in particular factory labour and urbanization, and to improve infant mortality. 150 years later Nestlé is the global leader in nutrition and health sciences, investing billions in the effort.

Nestlé has been a holding in Stern family portfolios going back decades.  It has generated double digit returns and hit a new all-time high when it reported results just last week.  But Nestlé is just one of countless examples.  As we look to invest in quality and value for the long-term, as the Stern family has for three generations, it is critical that we find the winners of tomorrow and not of yesterday.

We cannot be complacent but have to observe how society, technology business and consumers are changing and think about what these changes mean for the companies we invest in, what opportunities they create and what threats they imply.