Experience, cannot be taught.

Patience, cannot be taught.

It takes a 100 to be a Century – this is what the ad by Century Mills said when they turned 100 years old.

Not enough data is available for India, so let me quote from American facts: In 1964 the Americans held on to a share for 14 years, it dropped to about 3 years in 1990s and is now about 130 days.

Honestly one does not hope to make money with that kind of a holding period, right? It is sheer insanity. I belong to the old school of thought and have met people who have invested since the 1950s and stayed invested through 2016 and have no regrets for not jumping from branch to branch. I know of people (like my Dad) who have original shares of Hindalco (1958 I think), Colgate, PnG, Nestle,…(1977) and I have no regrets holding them for 40 years. IN the meanwhile of course he has been rewarded with dividends, splits and bonuses. Yes some of these shares have been sold, but the sale has been insignificant.

Reminds me of going to see a farm and seeing trees almost a 100 years old – and bearing fruit. The farmer surely did not uproot the tree during a bad year. In fact the farmer told me that in some years some trees do not give much fruit – and he has no clue why. So I held on to Franklin Bluechip, Hdfc equity, I pru discovery, Franklin Prima, Franklin Flexicap, Hdfc Prudence – for insanely long periods, and seriously I have no regrets. Could I have sold Bluechip, bought Reliance Growth, and shifted to Hdfc Midcap and got a better return? Sure, but I did not and am not unhappy about my returns. My goals will still be met. I did not invest in any NFO – only in IPOs when they were still called IPOs and not NFO. Again, no regrets. All these schemes have returns in the late teens, and they will help me meet my goals.

THE ONLY JOB THAT A PORTFOLIO HAS TO DO IS TO MEET YOUR GOALS. 

Chasing alpha, beta, gama is for smaller minds who have NOTHING else to do.

When you show patience you are playing a different game than the guy holding for 4 months. You are holding it for 4, 8, 12 years and making sure that you are getting the full growth cycle. For example I held Hero Honda (now Hero Motors) from 1990 to 2014 – a cool 24 years. My holding period in Reliance, MRF, LnT, are all similar – and I have sold all these shares substantially. In fact LnT is the only share out of this which I still hold – about 700 shares, not too much. The journeys have been fabulous, and no complaints.

The contribution of dividend to be able to buy more shares – those who do not understand that are the people who do not understand compounding, and I can only feel for them. Imagine shares like Hero Honda which paid out huge dividends – if those were converted to more shares of HH, how much the IRR would have improved. Even in a wealth destroyer like NTPC, I have enjoyed amazing dividend yield – remember my cost is Rs. 90, and yields on that are still excellent. Shares like Rane Madras and Rico Auto came into my portfolio ONLY, and ONLY as dividend yield shares and now rock stars in terms of compounding. Ignoring dividends is another amazingly stupid and myopic move. The amount of wealth created by patience, dividends, and compounding is not funny. Ask Warren Buffett, or Philip Carrett the legendary investor. And all this without a clue about how to predict the next quarterly results. Would PnG and Asian Paints not have had a bad year? or 2 bad years in a row? did HUL not have a strike in their Sewri factory? or Nestle not struggle with its Maggi and Sun Pharma with its FDA letters? If you trust the management, trust that they will come out of such shit too.

Why people need so much of activity beats me. And why activity in the whole portfolio beats me further. I have say 35000 shares of a company, why cannot I trade in say 500 or 2000 shares? So I can be a trader and an investor, right? Too many people out there who “want it now”.

Sad, but true.

Go and buy an Amul Dark chocolate – 80% cocoa. Eat one piece a day. Eat it over 30 days. Learn patience and denial.

Then start investing.

PS: all the shares mentioned above are there / could be there in portfolios that I influence. If I think you will buy these shares and I will benefit, i am an idiot.