It is inevitable that any activity governed by human behaviour has similarities in the core approaches regardless of associated area or discipline. Investing is no exception. During the Pune workshop, when I said, “the returns of an asset class is not the same as the returns of an investor”, Ashish Deshpande in the audience remarked, “market makes return, investors don’t”. How true is that!
The reason for that is that patience and discipline are as uncommon as common sense in all walks of life.
The title refers to the title of a religious article by John O Reid: I Want Patience – and I Want It Now!
Patience and disciplined investing is the key attribute of generating returns from equity. The patience to recognise that ‘performance’ will take time and that one must have the discipline to stay invested and invest more in the mean time.
Subra put it beautifully: “with the exception of investing regularly, man will do everything to build wealth”.
Take the case of driving. We see a red light or a stoppage in traffic about 100 meters or so away. Common sense dictates we gradually slow down as we head closer. Minimal stress, minimal use of brakes. Yet, there are so many people who zoom right up to the where the traffic is at a standstill and break.
During rush hour traffic, we often hear vehicles honking frantically behind us demanding that they be allowed to proceed in front. They then skillfully weave through the traffic only to stop at a signal, allowiing us to catch up and even overtake them. The hare and the turtle tale is relived each day thousands of times in our roads.
Minimalism works well not just for mutual fund portfolio creation but also for driving. The lesser we do, the calmer we approach our destination.
Minimalism works for blogging and content marketing (typically getting leads via a website) too. For these activities patience and focus is key to success. It takes time (a minimum 2-3 years) for a website to generate decent traffic. In the meanwhile, the owner must focus on ‘quality’ content. Quality simply means, ‘write stuff that others want to search in Google’. If this is done on a consistent basis, the site will become popular.
There are enough tools freely available from Google which will tell us what people are searching and how our site is doing. Yet, most site owners in a bid to become popular quickly resort to buying facebook likes, paying money to other bloggers for linking to their site, write crappy articles meant for Googlebot to read and not for humans and much more.
The trouble is Googlebot is becoming more and more human with each passing day! That is, Google coders are tying to make their crawler pick and deliver web pages most relevant to the keywords used for searching. The crawler is able to distinguish between a genuine article and one which is trying to be ‘found’!
Thus ‘get popular quick’, like ‘drive there quick’ and ‘get rich quick’ will not sustain for long. Be it a blog or wealth, time is necessary.
Just because we go slow and brake less, does not mean we can afford to take it easy while driving. Same applies to wealth creation and blogging. Maintenance is key. Maintenance with a well-defined strategy.
Attempting to do too many random things (honking, braking, stopping and starting investments, worrying about market valuations, removing capital in the market etc.) can be counterproductive.
Being patient does not mean we do ‘nothing’. It means we focus on remembering that watched kettles do not boil any faster. May we all reach our destinations safely.