I used to consider the performance of my portfolio to be fine – but did not take enough credit for DOING NOTHING aka sitting tight. Now let me tell you that it seems to be an art!

One devotee in a temple was asked to serve food to a long queue of people – and the priest told him “serve double to that man in a black shirt”. The devotee asked..why. The priest said “he does nothing”. The devotee said “but that is unfair”. The priest said “coma to the temple for 2 days in a row…and sit doing nothing”. The man could not. Such is the difficulty in sitting doing nothing.

In the investment world we have made it easier to trade, but difficult to invest. It is easy to do a transaction, and it is difficult to keep out noise. In the investment world we also have a different meaning to “do nothing” or “sit tight”.

You invest in a company say in 1977, and then still hold the shares in 2019. Say the share was Colgate. Then you see the quarterly results and decide not to do anything. It means you have 42 years seen 168 quarterly results, and said “I will do nothing”. This is active doing nothing. Not enough credit is given for “active doing nothing”. It is taking 4 decisions a year of “not to sell”. When I buy a share I do not know how long I will hold it. It is a decision of ‘not selling’ taken actively. Recent buys like Mindtree, Biocon (about a decade is what I mean), Oracle, are all shares like that.

After a particular passage of time you do not bother about quarterly results too = unless there is something dramatic like Emami. Or if a crisis erupts in say Indigo (remember there are 2 core promoters), or in Equitas (it is a bunch of promoters) ..I will only be looking at the general direction of these companies. In companies like Sun Pharma or Lupin – my decision will be based on the mangement’s capability to handle problems and not on whether pharma is going through a good phase or bad phase. I have a core investment portfolio and a trading portfolio – Sun, Indigo, Lupin, Equitas – all feature in both. Here I am talking about the investment portfolio.

Avenue Supermart (D’Mart), Page Industries – I am just asking myself whether the Roce and growth combination justify the high PE. So will sit tight WITHOUT buying. FOMO should not make me buy. That too is sitting tight.

I do this even in my eating out. My menu is very limited. If I go with a veg friend..I let him/her order. If I am alone, it is rice/pulao, dal, and curd. Boring? of course. Very boring. However, it lets me do something else…and I feel less guilty about leaving some food uneaten. Paying Rs. 2300 for this is terrible, but less hurting than ordering something fancy which I cannot eat. Simplifying ones eating and simplifying one’s portfolio are similar.

You are function of many things that you ‘choose’ NOT TO DO or NOT TO EAT. Everybody competes for your ENERGY – sleep, family, friends, business, leisure. You have to choose to which activity will you give your energy. When I choose not to subscribe to sports channels during IPL times, it is not the Rs 8 that I am saving, it is also the 100 hours. During which time I may choose to sit tight, read, meditate, run, walk, gym….or sleep.

In the investing world I have created a decent portfolio by the number of times I said ‘NO’ to promoters with zilch track record. I have no clue about how to evaluate a non dividend paying company. I love cash. I love cash flows. The only company that I have which does not give me cash flow is ‘Deccan Gold’. I have been holding it for a long time, earned enough in trading, and now will sit tight till say 2030 before I take a decision. Sitting tight, again. In a different form, is it not?

I say no to one new “prospective client” every day, and one “prospective company” every week, and 3 companies which want me to be a director every year. My portfolio is not because I said yes to 40 companies. It is because I said ‘no’ to 9960 companies which must have been offered to me by somebody at some point in time.

Imagine sitting peacefully in a hotel and eating dal-chawal when you are inundated by calls, salesmen, media telling you how their food will improve your health, make you active, give you energy, feel like a 17 year old, ….blah blah. Now put things in perspective why Indexing and Term insurance combination does not work. It is the NOISE around it. There are enough people who pronounces news as noise…