Investing is not a “job”.
Well, it’s not your normal job. As a society, we have confined productivity to a specific place from nine to five. If you’ve been monitoring your actions, you probably notice you get boosts of energy and productivity for just a few hours a day. For some people, it’s early in the morning, and for others it’s late at night. Most creative professions have a lot of leisure time built around them. For instance, writers sit around waiting to write before it spills out, then they write. It’s the same with investing.
As an investor, if you show up to the office every day looking to do something productive, you will most likely get yourself into a world of trouble. Investing is not an active sport, and if you conflate action with output, you are as screwed as the next guy who watches CNBC every day wondering when the bull market will end.
As an investor it is your job to quietly sick back and watch. Watch the behavior of other investors, watch the performance of companies, and act only when the situation is presented to you. Nothing with investing should ever be forced.
When I started in the markets I was trading quite often. I thought that if I was going to be a trader I had to be busy. Every tick, every chart, every news story, and every opinion some yahoo with a Wi-Fi connection had made, I felt was information I had to analyze. I was on the sucker side of the market. It took me years to realize that most of the time the best thing to do was nothing.
I truly believe that one of the biggest edges you can have in this market today is to be exceptionally long-term. With all the money and education being thrown at the finance world, the markets are getting quicker, and investors are demanding steady returns without much volatility. Why should they not? If you are a hedge fund charging two and twenty with a bunch of MBA’s and PHD’s working for you, why the hell can’t you outperform an old man in Omaha who sits on his ass and can’t work a cellphone? Well, besides Buffett being Buffett, he understands the importance of sitting around and doing nothing.
Investing is not a “do something productive today” profession. Sometimes it is not even a “do something productive this month” profession. And for a lot of people that is a hard concept to understand, let alone to implement. It’s all on you, no one tells you when to act, when to check prices, or when to work. You have to learn the game and then capitalize on your strengths. Mr. Market is one hundred percent the same for every investor. So let the others run around with their heads cut off.
Just don’t join them.