The Unpopularity of Patience

In my view patience is the most important (factor) and this is where most people fall down. They will not put enough time into the equation. - John Lee (successful UK private investor)

Everything popular is wrong. - Oscar Wilde 

Some of history's greatest minds have held up patience as a key ingredient to success in life.

Consider just a few:

• “He that can have patience can have what he will.” - Benjamin Franklin
• “Patience is bitter, but its fruit is sweet.” - Aristotle
• “The strongest of all warriors are these two — Time and Patience.” - Leo Tolstoy 

Why do you think they held patience in such high esteem? My guess is that they understood and sought to avoid the common human desire for instant gratification and observed the roles that impatience, anxiety, and stress played in the frequent mistakes people made in trying to realize that instant gratification.

The investing world is also hard-wired to be impatient, so it shouldn't come as a surprise that some of the most successful investors value the uncommon practice of patience: 

• The secret to value investing is patience...(Value investing) works over time, and it's quite irregular. But it does still work like clockwork; your clock has to be really slow. - Joel Greenblatt
• Putting it in the simplest mathematical terms, both the odds and the risk/reward considerations favor holding. - Philip Fisher
• When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever. - Warren Buffett

In a 1995 interview with 98 year old investor Philip Carret, Louis Rukeyser asked him, "What's the single most important thing you've learned about investing over the past three-quarters of a century?"

His answer: "Patience."

Patience allows our emotions to settle and promotes rational decision making. It allows our returns to compound and reduces trading costs. Yet few investors follow through, as patience requires an uncommon level of self-control to defer current gratification for future gratification. 

It's precisely the unpopularity of patience that makes it valuable.

What I've been reading

• Modelling, storytelling, and investing - Aswath Damodaran
• Why value investing works - A Wealth of Common Sense
• The problem of positive thinking - Abnormal Returns w/ Tim Richards (The Psy-Fi Blog)
• The power of share repurchases - Millenial Invest
• CFOs share their buyback secrets - Institutional Investor
• It ain't what you do, it's what it does to you - Monevator
• Bad management incentives are harming the US/UK economies - FT 

Stay patient, stay focused.

Best,

Todd

Follow me on Twitter @toddwenning