Gone are the days of the 90s when we, as kids, used to wait for a week to watch Jungle Book every Sunday morning.
Expressing our feelings of love to a girl used to take months or even years. Yet, we used to hold on and enjoy the waiting period while anticipating her affirmation.
Those were the days when we used to wait for weeks to read the latest editions of Champak, Chacha Chowdhary, Nagaraj and Pinky comics since the distribution channel wasn’t strong.
And now, in 2018, everything is just a click away. Want to watch your favorite cartoon? Hit to Youtube. Wanna express your love? Jump to Tinder and fix a date. Want to read the latest edition of your favorite magazine? Subscribe and get it in your mailbox the very next second.
* * *
With the advancement of technology, immediate fulfillment of our desires has become immensely elementary these days. We no longer want to wait. Moreover, we have become so habitual of it that we find it extremely tiring to wait.
But when it comes to investing, it turns out that waiting is actually rewarding in the long-term. Expecting a company to give multi-bagger returns the very next moment we buy it is not worth it.
Investors fail to realize that between their expectations of achieving multi-bagger returns and the reality of a stock not moving an inch, lies a long waiting period.
We live in a world of instant gratifications where the traits of waiting and being patient are not appreciated. People tend to believe that the constant action of doing something is totally related to creating value. The truth is – “Don’t Wait, Just Do Something“ is surely a wrong piece of advice when it comes to making fortune through investing.
The more you wait, the better are the prospects to get higher returns
The journey of SENSEX is one of the best examples that can justify the above statement. Since its inception, there have been many instances that really dragged down the index to new lows. Asian Financial Crisis, LTCM Crisis, Dot-Com Bubble, Satyam Scandal, Mumbai Terrorist Attack, 2008 Depression, UPA Corruption Scandals are few of the key events that turned out to be disastrous for the index. And yet, it has managed to deliver a CAGR of 16.52% since 1991. It’s a huge tailwind that Indian Economy provides to its investors who invest with a long-term approach and prefer to wait.
Image: SENSEX Chart | Source: Google
Majority of the investors, who lacked control over their emotions, got succumbed to their irrational behavior and pulled out with huge losses. But the ones who stayed and kept waiting grabbed the huge returns that the market had to offer after its recovery.
“I don’t want to spend my time trying to earn a lot of little profits. I want very, very big profits that I’m ready to wait for” – Phil Fisher
“The big money is not in the buying and selling, but in the waiting.” – Charlie Munger
In a decade, Mr. Market remains in the positive trend 75% of the time
If we look at the stats (below) shared by Mr. Kalpen Parekh, President at DSPBR MF, the market remains in a positive mood for a considerable amount of time. And it’s all about behaving rationally during 25% of the time when everyone is losing his/her cool during the bloodbath. One irrational decision and the returns are lost forever. Just wait and stay.
* * *
The journey of the latest dancing sensation who rose to fame in recent times, Mr. Sanjeev Srivastava aka “Dancing Uncle”, has never been so easy. His Govinda style dance moves while carrying remarkable expressions on his face has made everyone his fan. All he had to do was to wait for 36 long years to enjoy the limelight that he is enjoying today.
Over the period of time, I have observed that people can’t stand idleness. The tendency of doing something consistently makes them take ill-advised decisions. I find Charlie Munger’s quote extremely apt – The real money is not in buying and selling but in the waiting. Sometimes, you need to wait many years to witness full throttle returns from your investments in the last 6-12 months. And as an investor, this is one of the extra edges you need to excel in the market and earn higher returns.
You must be wondering why the title of this post is just a 4-letter word? Needless to say, these 4 letters have an immense power to make you filthy rich, provided that you are ready to wait.
* * *
Follow RichifyMeClub on Twitter
PS: The cover image has been taken from this link
* * *