Can I take a moment to be vulnerable with you? Here’s a confession: I’ve never been patient.
Part of it might be over-confidence, bred from my football background in the belief that “brute force” can easily alter a down, drive or situation. The other side of it is that, when I set my mind on a particular thing, I will move mountains to try and manifest it.
Photo: Me being patient with my mom as she yells at me to sit still for this picture.
Truthfully, I admire folks that are naturally patient people. It’s a trait that is attractive because for the longest I could not wrap my head around how they were seemingly unaffected by the events of the short-term, and triumphant in the long-term. It seemed as if these individuals harnessed a sort of secret that would — in the distant future — make them unrivaled victors. The ugly truth about those that are operating out of impatience is that the gain that they are experiencing is only a fraction of what they might have if they exercised a bit more patience. This was the case with one of my early investment “wins.”
I was a young investment associate at one of the largest independent firms in my region. At this firm, they believed that individual stocks were the way to achieve premium returns over the long run. I knew nothing about stocks, nor capital markets at the time (God bless the recruiter who saw something in me), but knew that I would outwork anyone in the boiler room. Through rigorous training, I learned how to analyze stocks, read balance sheets, and listened keenly to quarterly conference calls to make predictions about a company’s future. I was hooked. The feeling of picking a winning stock was one akin to what a quarterback felt when orchestrating a game-winning drive. Or what a horse jockey must feel after winning the Kentucky Derby. Perhaps, it's what a man feels when the woman of his dreams says “yes” to his proposal or …. Well, you get the point.
I decided to buy one of my first stocks, Electronic Arts, Inc., at nearly $27 per share. I knew their products well, as my brother was an avid gamer, and my teammates would buy all of their consoles.
On one random weekday at the office, EA Sports share price popped about 15% quickly after the opening bell. I immediately went to my trading application and sold the stock. I paraded around the office silently, feeling as if all my hard work did not go in vain. And it didn’t. There were good things to be said about my efforts: I read the balance sheets with great detail, identified a quality consumer brand, measured it against its peers and was able to understand it’s business model.
The problem was, I was not patient. Today, EA sports sits at over $100 per share. Over three times the price that I bought it for.
We are in uncertain times. The United States has over 500,000 confirmed cases of COVID-19, and over 22,000 deaths from the quickly-spread virus. This virus has impacted our daily lives, and the capital markets that are tied to them. Outside of my bear market advice, my EA sports experience reminds me that one of the secrets to success is not a secret at all. It’s a resource that everyone has access to. It does not discriminate, and the lack of it is self-inflicted. It was not unique a strategy. It was not an asset allocation. It was not a perfect financial plan, nor was it a particular dollar amount of resources.
It is simply patience. Without it, we enjoy the short-lived euphoria of a fractional win. With it, life invites us to enjoy it's best, and we get to see the fruits of our patience show themselves in their proper figures.
In this season, more deep breaths, less panic, and more patience.