Let’s now look at how this applies to investing and yielding
of greater returns. I have over the years learnt that, in the course of
investing, it’s better to work smarter than to work harder. Most times, it is
not the amount of time you spend on cultivating a particular investment, but
it’s about how smart and fast you position yourself to make the best out of
that investment. If it’s a business you are investing in, if it’s a stock or bond
you are investing in, it’s always good to work with time. This is because time
can change the value of your return on the investment.
For instance, let’s say
Mr. A, invested in a stock, GCB and gained 100% over two months, and Mr. B
invested in the same stock but gained 100% over 10 months although he could
have sold in the second month as Mr. A. If they invested the same amount, Mr.
A’s gains will be valuable than Mr. B’s (holding all other factors constant) in
this global economy.
I know other school of thought holds the view that, holding
for long as Mr. B did in the analogy could be a bargain on stock GCB’s
performance and could swing in his favour. (Let’s say: 200% profit). However,
it’s good to know from the start how much time you are allocating to a
particular investment and what percentage gain or loss you can take. And when
you reach that level, ACT fast.
There is limiting belief that working harder is somehow
better than working smarter and faster. That’s related to the idea that the
longer something takes to complete, the better quality it must inherently be.
But this is not the case, in investing; you have to learn to work against the
clock. You have to win against the clock; strive to beat it as if it were your
opponent, without taking shortcuts and producing low-quality output or low
return on your investment. Cut off the time-fillers and focus on the main
thing.
