What Works in Investing?

“Own Great Businesses and Do Nothing”

Most of history is made by those who mastered the art of doing nothing when nothing needed to be done, their doing nothing can be more important than their inclination of doing something.

My basic idea is 99% of Investing is doing nothing the other 1% is the Visible part so it’s all we talk about.

Doing something contrarian to overcome mediocrity, requires you to take a bold action. Capitalism job is to allocate capital to successful business, which seeds its own decline if you tend to make a lot of decisions.

Surviving the decline & let compounding to work requires enough buffer, Doing Nothing will minimize the number of rash decision and builds up capital, this is the difference between getting rich and staying rich.

Good Strategies rarely requires action, swinging for the fences and being conservative are not mutually exclusive, and the most enduring businesses and investors have elements of both, usually at the same time, often feeding off each other.

I have never seen Warren Doing DCF (Discounted Cash Flow Analysis on a potential investment), we expect investment opportunities to present themselves and shout at us. -Charlie Munger

Doing Nothing will help you to grab these low-lying fruits.

Charlie Munger deal making philosophy is

“Look at lots of deals and don’t do almost all of them.” 
Combine these two quotes:

“In my personal portfolio I’ve sat for years at a time with 
$10 million to $12 million in treasuries. Just waiting, waiting. 
A lot of people can’t stand to wait. It takes character to sit there 
with all that cash and do nothing.”

“The wise ones bet heavily when the world offers them opportunity. 
They bet big when they have the odds. And the rest of the time, 
they don’t.”

Source:
http://www.collaborativefund.com/blog/making-history-by-doing-nothing/?curator=alphaideas&utm_source=alphaideas

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s