Proven Survivors

John McCain (1936-2018) was a naval aviator and pilot in the U.S. Navy during the Vietnam War prior to becoming a US House Representative and then US Senator. McCain came from a prominent military family; his father and grandfather were four-star admirals in the U.S. Navy.  

McCain graduated from the U.S. Naval Academy in 1958, becoming a fighter pilot. In 1967, he was assigned to the aircraft carrier USS Forrestal, stationed in the Gulf of Tonkin.

While he was aboard the Forrestal, a catastrophic fire broke out on the flight deck after a rocket accidentally launched, causing a series of explosions and fires.

He narrowly escaped death while trying to help other pilots and crew. The fire claimed the lives of 134 sailors, and injuring 161 more, making it one of the deadliest accidents in U.S. naval history. 

After the Forrestal fire, John volunteered for combat duty on the USS Oriskany, another aircraft carrier in the Gulf of Tonkin. He flew A-4 Skyhawk attack aircraft, engaging in dangerous bombing missions over North Vietnam.

On October 26, 1967, during a mission over Hanoi, McCain’s plane was hit by a surface-to-air missile. He ejected from the aircraft, breaking both arms and one leg during the fall. He landed in Trúc Bạch Lake and was captured by North Vietnamese forces. When they found him, they stabbed his only working leg and foot with a bayonet. 

John was held as a prisoner of war (POW) at the notorious Hỏa Lò Prison, dubbed the “Hanoi Hilton” by American POWs. He endured extreme torture, starvation and isolation.

"Every man has his breaking point. I had reached mine. I was at the end of my rope, and yet, at that moment, I knew I had a choice. I could break or I could endure. I chose to endure." 

His status as the son of a prominent admiral made him a valuable propaganda asset, and the North Vietnamese offered him an early release. McCain refused early release, adhering to the U.S. military’s Code of Conduct, which stipulated that prisoners should be released in the order of capture. This decision led him to receive even more torture and extended imprisonment.

"I felt I was honor-bound to refuse. It wasn’t just about me; it was about the other men who were there longer. If I left early, it would have demoralized them, and that was something I couldn’t do."

Over five and a half years of captivity, McCain faced a harsh regimen designed to break his will, including countless rope bindings (hanging by your hands until your shoulders dislocate) which would leave him unable to lift his arms above his shoulders the rest of his life. 

"The thing that sustained me most during my captivity was the sense of brotherhood we had among us. We were each other's lifeline. We knew we weren’t alone."

Soon after the signing of the Paris Peace Accords in January 1973, the North Vietnamese released McCain along with 590 other American POWs. 

"The most important lesson I learned in captivity was that our character, and our principles, are all that we have in the end. They are what define us, and what sustain us."

John McCain would be awarded the Silver Star, Legion of Merit with Combat “V”, Distinguished Flying Cross, (2) Bronze Star Medals with Combat “V”, (2) Purple Hearts, Navy and Marine Corps Commendation with Combat “V”, Prisoner of War Medal, National Defense Service Medal, and numerous other medals. 

He would become a US Representative (1983-1987) and then a US Senator (1987-2018). 

We all go through challenges in life. Some are tested in extreme and unique ways like McCain. Most of us are tested in life’s more common but still difficult ways - the death of a loved one, illness, job loss, addiction, poverty, divorce, betrayal, etc. 

The worst thing you have ever experienced is the worst thing you have ever experienced. When you experience anything less than your worst experience it doesn’t seem that bad.

After McCain’s POW imprisonment, I’m sure if you would have put him in most high stress life or death situations he would be as cool as cucumber. Me, not so much. 

What does this have to do about stock picking? 

I’ve always been attracted to leaders who have faced life and business challenges and prevailed. There is no greater challenge than being a microcap CEO. 

To be honest, I’ve always felt being a microcap CEO is one of the worst jobs on the planet. Most of them have stepped into less than desired situations and had to turn a business, turn a culture, turn a cruise ship, all while being undercapitalized.  

Almost all microcap success stories started from challenging circumstances. 95%+ of microcaps are turnarounds and underdog stories in some shape or form. They were all laughed at and mocked by most investors. Layer on top of this the stress and torture of every action being on public record and being second guessed and questioned by thousands of common shareholders - many of whom have never run a business before.

When a management team has dealt with all these financial and public headwinds while also fighting off hundreds of competitors clawing for their customers …

When a management team prevailed against all odds lifting a microcap company from the outhouse to the penthouse … 

When a management team handles themselves with honor and distinction in the worst of times, it allows you to trust them with the best of times.

It's what makes investing in repeat winners (CEO's with a track record of winning) so alluring. They've already been through the wringer a few times. They already made the rookie mistakes and dealt with scaling problems and learned from them.

When they face future challenges they won't be unnerved. They know what to do or who to go to for answers. In their next venture an investor can buy today's wisdom without paying for yesterday's mistakes.

Wby? Because they are proven survivors.

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