Patience - Pays

-

Dear Readers,

What are the essential traits for a smart investor? Let me answer this question in my own way.

In my view, the first and foremost quality of an investor is having good knowledge. Generally, he must have sound knowledge on his entire investment stratum. Here, the word knowledge is pervasive from the updated information on the intact subjects to the expertise he attained by experiences which may useful to him as an investor. Broadly, he or she should have updated wisdom with in the sphere.

The second aspect as well as the true subject of this post is “Patience”. I wish to discuss about this key topic with an investor’s angle. Patience is one of the most indispensable and must have element for any investor. Please relate the following lines with an investment angle rather than the logical harmonizing of the word “Patience”

The Dictionary (Webster’s) defines “being patient” as follows:-

(a) Enduring pain, trouble, etc. without complaint
(b) Calmly tolerating insult, delay, confusion, etc.
(c) Showing calm endurance
(d) Diligent, Persevering

Patience can be described as a state of endurance under intricate circumstances. In other words, keep yourself stubborn towards delay or provocation without being bothered or distressed. The word “Patience” can also interpret as a decision making quandary which involves both the options of either a small remuneration in a short term, or a more precious return after a long period of time, pointing to the worth of waiting, You can realize with in nearly all of the investment options, delayed rewards are persistently on the higher side than the price of immediate gains.

When come to the stock market investments, the big money is not laying in the buying or selling but it is veiled in the waiting, or we call this patience. Turning a scrip in to multibagger is also not a process of some few weeks. In other words, we have to give enough time to the management whome you selected after a strict and an exhaustive process. The concept is closely related to high end of patience and the reward must be fruitful. I think, majority of the investors are aware about this fact, but a very few or rare percentage practicing it in the real life. It is hard to stay consistent with your beliefs between the frenzied and provocative crowd of experts. But you have to!.. It is not an easy exercise to keep you idle, between the extensive internal or external provocations. The internal emotions also play a big role in the decision making like greed etc.. If you controlled yourself, the hardest part is over. Here I wish to list the third important quality of a smart investor, `faith’ or we call the confidence.

Let us see how these three essential elements related to each other. The word “patience” is very much synonymous with the “faith”. You have good faith in you, that is the reason you are keeping good patience towards your decisions. The sheer faith probably restricts you to act against provocations. The faith again closely associated with your “knowledge”. To have patience means to have faith in your selections, decisions, knowledge and above all in yourselves. Again, the faith or sheer self-confidence is a distilled product of true knowledge you attained. You can see, how these three terms are related to each other, the Patience, Knowledge and the Faith. Please read the para again, if you wish to take it as a serious note.

I wish to compare the investment in stocks with growing a seed. You have to let the seed to sprout, gradually to a plant on the way to become a huge tree. As you know, the tree has much higher value than the seed or the early plant. Certain trees bestows you delicious fruits through out its life as dividends. If you can grow a forest or a farm in this sense, it will endow with an unmatched returns or it may change the life of your coming generations.

Following are the very few worthy examples of the fruits of patience in recent past. I have placed the turn around value of Rs. 10000/- at the bottom of each scrip.

Sesagoa

Price in Oct 2001 - Rs. 41.70
Price in May 2008 -Rs. 4390.00
Returns - 10427.58% (7 Yrs)

Rs. 1052758.00

Bharati Airtel

Price in Nov 2002 -Rs. 21.50
Price in Jan 2008 -Rs.1010.00
Returns - 4597.67%(5 Yrs)

Rs. 469767.00

Electrothem India

Price in Jun 2003- Rs. 2.45
Price in Jan 2008 -Rs. 619.00
Returns - 25165% (5 Yrs)
Rs. 2526500.00

Bajaj Electricals

Price in April 2003 - Rs. 20.00
Price in Oct 2009 -Rs. 835.90
Returns - 4079.50 (7 Yrs)

Rs. 417950.00

Crompton Greaves Ltd

Price in Sep 2001 - Rs. 18.10
Price in May 2006 -Rs 1225.00
Returns - 6667.96%(5 Yrs)
Rs. 676796.00

.

.

Axis Bank

Price in Jan 2002 -Rs. 25.70
Price Jan 2008 -Rs. 1291.00
Returns - 4923.35% (6 Yrs)

Rs. 502335.00

Data courtesy : http://www.bseindia.com/

There are hundreds of scrips in this category and it is not possible to list the entire. I am not disregarding the complexity on decision making on the entry or exit point in such stocks rather wish to illustrate the power of patience.

-

Do you believe, you have such diligence in you to devour the fruits of patience?

Learn the art of patience. Apply discipline to your thoughts when they become anxious over the outcome of a goal. Impatience breeds anxiety, fear, discouragement and failure. Patience creates confidence, decisiveness, and a rational outlook, which eventually leads to success - (Brian Adams)

*

Comment please...

*