Saturday, January 16, 2010

Patience

The largest struggle I have as an investor is not researching companies, or finding and analyzing data, or even pricing a stock; it is having the patience to do all of these things properly.

Patience serves as a protection against wrongs as clothes do against cold. For if you put on more clothes as the cold increases, it will have no power to hurt you. So in like manner you must grow in patience when you meet with great wrongs, and they will then be powerless to vex your mind.
Leonardo da Vinci

Recently I have struggled with this. Having found a good company to invest in and having arrived at what I believe to be a fair price I placed a GTC order. As the days turned into weeks this trade hung on the line never reaching my desired price. In lamenting this fact I found myself at my computer with the mouse over the cancel button on the order with all the intention of canceling my current order and increasing my bid to a price more inline with the current market price for no other reason than that I lacked patience.

Two days later and I am still waiting but the stock has already dropped 9%. I'm calling this 9% a reward for being stubborn. I hope all of you are stronger in this regard than I am and find these challenges a breeze, but for those who don't I hope we can all learn to take a little bit more time to read the financials, price the company, and patiently await an investment to come back to where we know it should be.

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