Investment cycles are usually long and boring. Parallels to a long running soap opera aren’t out of place. One sees daily troubles unfold and engage unusual mind space of watchers. Most investors are too lost in the daily action and get bedeviled in a sea of detail. The difference between the investment cycle and soaps is that you need to participate in the former while you can simply remain a watcher in the latter. The maze of detail that stretches across politics, currency, global macros, trade data works on an investor’s mind and tend to dissuade him from acting decisively. Decision making remains on hold for years as the cycle ambles along towards better times. The perfect moment doesn’t happen till it turns imperfect. Investors must play the cycles longer if they want to win the investing game. Staying within the investment cycles is always better than watching from the sidelines. By staying within the cycle, smart investors tune up their investing progressively to get to the winning side.
Discipline is the bridge between goals and accomplishment.- Jim Rohn.
Conviction is at the core of how well your investing will perform. Investors mostly build capital around decisions without building enough conviction. Typically, the largest decisions are arrived at in the most casual fashion. The need for building conviction is often given a pass. The excuses are always the same. Most people believe that things can go wrong anyways and any amount of conviction won’t change it. But, what they fail to understand is that conviction helps you stay grounded to your belief even when things go wrong. This ensures you tide over the tough times till things change for the better. Every investment done at the wrong end of the investment cycle will usually carry the conviction deficit. The hurry to do things is usually the culprit that works against building conviction. There will always be a paucity of time to do important things. But, every investor needs to understand that unless you prioritize, time will always be in deficit to do important things. Importantly, when decisions are made with an implicit conviction deficit, the amount of time lost in recovering capital is much more. The loss of time is worse than the loss of money. Spending years to recover money, investors fail to focus on building any conviction during the waiting period. The loss hurts doubly as investors stay away from investing during the waiting period too. To us, building adequate conviction before investing is far simpler.
Keep moving, even if it is at the pace of a tortoise.