Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas. – Paul Samuelson
I was listening to Tim Ferriss interview Howard Marks on his podcast.
It took a few days to get through the whole show because I kept restarting it and now have a napkin with notes in streaky bold purple felt tip.
And the first note has to do with Peter Bernstein who wrote “The capital markets are not accommodating machines”.
In other words they’re not wishing wells.
You can’t just want or need something and expect to have your wish come true.
People who have never done a trade or tried to manage their own portfolio don’t get this.
It’s actually very hard to explain this unless you already know how it feels.
The sick, clammy, gut-wrenching that comes from a trade going wrong.
Not knowing whether you’re wrong, or still right.
Seeing an investment go to zero.
It’s like saying travel broadens the mind.
You need to travel to know what that’s like for real.
Now, a lot of self-help and positive psychology stuff relies on life giving you what you want.
Focus on what you want and your reticular activating system will kick in and the universe will give you what you most want.
What if that’s not true?
What if, like a capital market, life is not an accommodating machine?
What is it then?
From Bernstein we move then to Benjamin Graham who said “In the short run, the market is a voting machine but in the long run, it is a weighing machine.”
In other words, what drives stocks now is news and noise and hustle.
In the long term what results in value is what the company earns.
You can achieve notoriety and fame quickly – but can you keep it?
The chances are that most people who have achieved anything did so over time.
Whether they’re public figures or successful in their own fields – they probably did it over time, little by little.
They learned and trained and worked.
And they were ready when opportunity came knocking – they knew how to recognise it and they knew how to let it in.
Lottery winners, on the other hand, have their big moment and then fade away.
It’s a simple lesson really.
Wishing isn’t enough.
Wanting isn’t enough.
Winning the lottery isn’t enough.
What matters is what you do over time.