The Effect of Consistency on Corporate Net Income

One of the investment concepts that every long term investor should know is the effect of consistency over corporate performance. The main idea is that older and profitable companies are likely to continue to be profitable and even improve its performance in the upcoming years. Likewise, companies with constant losses are likely to continue in the same path. This idea is related to the Lindy Effect. Quoting directly from wikipedia: The Lindy effect is a theory that the future life expectancy of some non-perishable things like a technology or an idea is proportional to their current age, so that every additional period of survival implies a longer remaining life expectancy.

Can you turn 1500 USD into 1.000.430 USD by investing in the stock market for three years?

In the last few weeks we’ve seen a great deal of controversy in Brazil regarding financial investments. Too keep it short, Empiricus, an ad-based company that massively sells online courses and subscriptions, posted a YouTube ad where a young girl, Bettina, says the following: Hi, I'm Bettina, I am 22 years old and, starting with R$ 1,500, I now own R$ 1,042,000 of accumulated wealth. She later explains that she earned the money by investing in the stock market over three years. For my international audience, the proposed investment is equivalent of turning 394 dolars into 263169.