Picture Credit: Bizzaro Comics
Is doing nothing a way to succeed? Surely not if you have to pass exams; but some other times, yes. But believe me, doing nothing takes a lot of work! As the Japanese do, spend 90% of your effort in planning and 10% of your effort in execution. If the plan was a good one, it will hardly need any changes. So, do nothing and watch the plan progress. Some investment greats have said that investing is like watching the grass grow…as boring. But that was after a helluva lot of work was put in to select the investments!!
Yes, there are some who like excitement and expect to get it from investing. Well, to them I say that let the excitement come from seeing the plan work rather than from frequently changing investment positions. Trading involves two decisions at a time – one to buy and one to sell. To get it right you have to get both decisions right, over and over again till you reach your goal or time runs out. How easy is it to be right so many times?
Some are afflicted by what is known as ‘Action Bias’. They believe that unless there is ‘action’ (like in a movie?) there is no work happening and hence no wealth being generated. It could be something to do with the thyroid, maybe, but watching the grass grow is not a sign of pro-activeness for them.
Ask one who has accumulated wealth through investing, and the person will most likely advise that buying the right investment and then holding on to it is the best way. Not trading. Not continuous change. Not jumping from one to another all the time. Just allow compounding to happen.
As advisors, we strive to plan such that least change is required along the way. But we are watchful, evaluating every factor as it unfolds. We recognize the world is dynamic and hence are open to tactical changes and even strategic changes when required. But not just for the sake of action. It may look like we are doing nothing, but we are actively working in the background. You would have seen swans so gracefully floating on water, a picture of calmness. What is not visible is how furiously they are paddling with their webbed feet under the water!
Enlightened souls can spend any amount of time in stillness. But to reach that stage of stillness, where the mind does absolutely nothing, they have to undergo years of discipline and sadhana. Doing nothing is very hard work.
T. Srikanth Bhagavat
Managing Director & Principal Advisor
Extreme of any thing is cumulatively unproductive in long run. Pendulum is most productive in balanced ( vertical) position.
With 90 % planning culture, even Japan fails regularly in 10 % execution. Thus it has to be need based approach . If it calls for nothing , be it .
Yeah….a formula is not enough solution. It still is execution, execution, execution!
Absolutely! Every time you react to every news; all your biases and errors are likely to creep in.
Just control the controllable and you would get the desired results.
While this may not be a solution to everything, it would work most times, both for investors and advisors.
Thanks Srikant for a wonderful piece.